President Aquino Speech at the 32nd National Conference of Employers

Speech

of

His Excellency Benigno S. Aquino III

President of the Philippines

During the 32^nd National Conference of Employers of the Employers Confederation of the Philippines

[As delivered at the Marriott Hotel, Pasay City on May 5, 2011]

Perhaps I should like to start out with a comment I read in one of today’s columns. Actually there were two columns, both of them critical. They said I don’t work hard enough. [Laughter] And for their information, this is my third engagement of the day. I started out rising at 5:30 in the morning, not because I had to plant some fields, but because I had to board a plane by 6:30 to go to two wakes—one in Cebu; one in Samar—to attend the wakes of two of our partymates; one killed by assassination, and the other due to a health concern.

And therefore, I would like to start out by thanking the Employers Confederation of the Philippines for this chance to speak before you, because it is that time of the year again when the haggling between labor and management over wages comes to a head. And most of you know that just a few days ago, I talked to labor groups and told them what we are doing for them. So now, allow me to tell you what we intend and what we are doing for you.

We have been burning the midnight oil trying to create an environment where business can thrive; and we believe we have been successful so far. In the last few months, we have witnessed a surge of confidence in our economic prospects. This confidence is partly due to our able fiscal management. In recent months, the Department of Finance, under the leadership of Secretary Cesar Purisima, has managed to stretch out the maturities of our government’s debt. The result of this restructuring is the freeing up of much-needed cash that we can now allocate for our social programs, which are intended to reduce poverty. Let me put it to you in very concrete terms: The government’s first quarter deficit was approximately 26.2 billion pesos, dramatically lower than the original target of almost 112 billion pesos.

These numbers have helped strengthen confidence, and this confidence can be seen in both the capital markets and direct investments.

In the capital markets: The Japan Credit Ratings Agency has already upgraded their outlook on our debt from “stable” to “positive.” Secretary Purisima has already met with other ratings agencies as well, making the case that our ratings be further improved, and we are confident that they will be improved in not too long in the future. This is important because it will reduce, as we all know, the cost of our external borrowing and give us wider access to outside markets.

The stock market is experiencing historic success as well. In fact, just three days ago, the Philippine Stock Exchange index was at 4,326.76, just 23 points shy of the high last November; and I think this is not bad considering the recent surge and continuing surge in world oil prices.

All this is a sign that the corporate sector is expected to do very well this year. In fact, all these successes have already translated to direct investments.

Atlantic, Gulf & Pacific, for example, has 10 billion dollars worth of potential contracts over the next seven years with renowned and world-famous firms. These projects will require them to hire thousands upon thousands of workers, paving the road of opportunity for many of our countrymen while also further reinforcing our growing economy.

And if I may just add: The opportunity for AG&P arises from the fact that in the country that they will be deploying these workers—some 4,000—there are 20,000 temporary work visas being offered; and the primary reason for this is that they don’t have workers to meet the need that they do have in that particular country.

May I go on: A coal-fired power plant in the Visayas developed by the Panay Energy Development Corporation of Dr. George Ty, will generate not just electricity, but more jobs for our people. The Coca-Cola Company’s investment of 1 billion dollars—about 230 million dollars this year—and General Electric’s commitment to create 5,000 jobs here in the next three to five years are just a few more examples of what we have labeled the Good News. Our efforts to liberalize aviation and improve regulation are leading to the expansion of foreign airlines here in the Philippines, such as JetStar and All Nippon Airways, and the coming start of operations of AirAsia. This, in turn, has made the tourism sector more optimistic. We have 23 new hotels scheduled, I understand, to open just in Visayas, for example, adding at least a thousand two hundred rooms our visitors can enjoy during their stay here. And I can assure you that there will be more in the coming months.

All of these are proof of an increased confidence in our economy. We are doing this because we realize that the private sector is the main driver of economic growth.

But even as we create an environment conducive to business growth, I know that some of you have concerns about possible increases in wages after I urged the Wage Boards to expedite rulings on the petitions of the labor unions. What you have to understand is that our job is to balance these sometimes competing concerns. What we have offered to labor is not necessarily harmful to your interests. We have no intention of asking Congress to legislate an across the board increase in wages, but the Bangko Sentral ng Pilipinas does believe that certain wage adjustments through the regional wage boards can be absorbed by the economy.

Please don’t look at this as a threat. Just imagine: In a few years, our population will undoubtedly continue to grow. Can you imagine if that growth in population were coupled with an enhanced purchasing power? Can you imagine if more Filipinos had jobs that could afford them more than just their basic needs? An economy like that would be a boon to your businesses, which would in turn lead to expansion and the hiring of more labor. The balancing act that we are currently undertaking was envisioned to create that kind of cycle.

The important thing for us to realize is that, as Filipinos, we all want to reach the same destination—a Philippines under the guidance of daylight, where no one is left behind, and where we can all work toward prosperity together.

I call on each and every person here and in the Philippines: Let us revive the virtue of dialogue—of sitting down and ironing out our differences without resorting to stifling our productivity with what can be reduced to needless and directionless bickering. If we keep tempers from flaring prematurely, and if we can approach every problem while keeping in mind that we are fighting the same battle for a better Philippines, then we will be stronger for it, especially in the context of an increasingly globalized and competitive world. It is the best way for us to pursue our shared dream of a prosperous Philippines.

And before I end, may I just make my point really very, very clear: For too long, and when I was in the Legislature, I proposed a measure which I think we will now relabel. At that point, we called it the Profit Sharing Incentives Plan, or the Productivity Incentives Plan. We are advocating and we are asking: Can we not come up with an incentive for our workers wherein, if there is an opportunity to go from the traditional confrontational relationships between management and labor, should we not encourage going back to the fundamentals—which are: “Labor and management working together are the keys to any company’s success”? It redounds to society’s classes, in that—look at some of our industries now. The BPO industry continues to grow, but we are already hampered by the quality of our graduates who can enter it. Before it used to be one out of 30 applicants; it’s now one out of 19 that get accepted. We would like to get to the point that it becomes one out of 10, or even one out of five. And that has to come from an education sector that will be supported by the private sector.

What I’m trying to say is this: When we assist the labor component of our various firms, we are in effect laying the groundwork for the increase in our market, which undoubtedly benefits everybody else. If we cease the paradigm of looking at them as mere input costs, and see them as partners toward progress, where we should be will be attained tomorrow and not some time in the next millennia. With that focus, I understand and I believe, we can achieve our rightful place in the sun.

Thank you and good day.