Thank you, Secretary Ben Diokno. All the members of the Cabinet of the Philippines; Mr. John Tuttle, the Vice Chairman of the New York Stock Exchange; and for those kind words from Mr. Sabin Aboitiz, the Convenor of the Private Sector Advisory Council; we have also with us the Speaker of the House, House Speaker Ferdinand Martin Romualdez; and our Ambassador to the United States, Ambassador Jose Manuel Romualdez; also with us is our Permanent Ambassador to the UN, Ambassador Antonio Lagdameo Sr.; and I would be remiss if I did not of course include in my greetings the First Lady Liza Araneta-Marcos; distinguished guests here today; ladies and gentlemen, good afternoon.
On behalf of the Philippine delegation, I wish to express our gratitude to the New York Stock Exchange for inviting us here today.
I consider it an engagement of invaluable opportunity to share with you how we are further opening up our economy to accelerate our recovery.
Bouncing back from the pandemic, the Philippine economy has seen robust growth since last year and has returned to its path toward upper-middle-income country status, achievable, we believe, within the next few years.
Against this backdrop, we have increased the scope for mutually beneficial investments that would mean more jobs and a better quality of life for Filipinos. For investors, doing business in the Philippines is an opportunity to reap the benefits of a vibrant economy.
We are proud to share that we recently enacted policies to further liberalize our economy and welcome more foreign investment to our shores.
First, we passed legislation to lower corporate income tax rates and rationalize fiscal incentives. Second, we reduced the minimum paid-up capital requirements for foreign retailers and foreign startups bringing in advanced new technology. And third, we now allow full foreign ownership of companies providing public services, such as telecommunications, shipping, air carriers, railways, subways, airports, and toll roads.
The United States and the Philippines have strong and enduring ties in trade and commerce, among many other areas of cooperation.
The US is our third largest trading partner and second major source of foreign direct investment applications in 2021.
To international investors, the Philippines offers high-quality labor, a large consumer market, and a wide range of fiscal and non-fiscal incentives. At the same time, we remain committed to maintaining sound macroeconomic fundamentals providing a clear development roadmap.
Let me expound a little bit on these important points.
First, sound macroeconomic fundamentals…
Our gross domestic product is projected to grow by 6.5 to 7.5 percent this year — by 6.5 to 8.0 percent from 2023 to 2028.
The employment situation has improved following the temporary disruption caused by the pandemic. The unemployment spike of 17.6 percent in April 2020 fell drastically to 5.2 percent in July this year, the lowest record for all the July rounds of our Labor Force Survey since 2005.
Manufacturing activity has accelerated, staying above the growth threshold of 50 for the past seven consecutive months and settling at 51.2 last August.
Trade is back to double-digit growth, with demand from trade partners boosting our exports and with domestically-situated firms importing more inputs in anticipation of rising demand.
At the same time, with our commitment to fiscal discipline, the country’s debt-to-GDP ratio has improved to 62.1 percent as of end-June this year from 63.5 percent in the previous year.
At the height of the COVID-19 crisis, the government implemented massive stimulus programs to readily support the most vulnerable sectors. Although our borrowings increased substantially during the pandemic, we continue to reduce the cost of our public debt through judicious debt management.
Now that the economy is reverting to normalcy, the government is likewise heading back to the path of fiscal consolidation. We will reduce the government debt-to-GDP ratio to below 60 percent by 2025 and further down to 51.2 percent by the end of my term in 2028.
Our economy’s resilience to crises is recognized internationally.
The Philippines has maintained its investment grade credit ratings throughout the pandemic amid the wave of rating downgrades globally.
As we look forward to achieving upper-middle-income status, we are also gearing up for “A” territory credit ratings in the medium term.
On the external front, we have sufficient buffers against external shocks.
Supported by steady inflows of overseas Filipino remittances, receipts from business process outsourcing, and foreign direct investment, our gross international reserves stood at US$99 billion as of end-August, equivalent to 8.3 months of import cover. This remains more than sufficient to cover the economy’s foreign exchange needs.
Moving on to my second point: our economic development roadmap…
In the near term, our top priorities are protecting the purchasing power of families by managing inflation, reducing the scarring effects of the pandemic, and ensuring sound macroeconomic fundamentals. Thus, we are implementing policies that enhance food security; transport, reduce energy cost and logistical cost; strengthen social protection; and enhance the quality of education and skills training of our workers.
As we pursue our short-term agenda, we build the foundations for a stronger, more inclusive future.
Our medium-term agenda includes reducing the poverty rate to single digits by 2028, and undergoing an industrial transformation through which science, technology, innovation, and sustainability will drive our industries.
In all our endeavors, the private sector must be a partner.
We seek partnerships in many areas of our development agenda: in public infrastructure — such as mass transit systems, airports, toll roads; in public services; in digitalization initiatives; in the energy development agenda; in efforts to modernize agriculture; and in programs aimed at strengthening our industries, to just name a few.
For American businesses, we offer investment opportunities in areas such as information technology and business process management or IT-BPM; medical products and devices;
electric vehicles and batteries; agribusiness; and telecommunications infrastructure and services.
Despite external headwinds, the Philippine economy’s resilience — reinforced by sound policies and decisive leadership — makes us confident about our future.
Over the past few decades, as the Philippines transformed into one of the most promising emerging markets, the United States has been among our steady partners. For that, we are truly grateful. At the same time, American companies doing business in the Philippines have benefited significantly from our economic successes.
I wish to emphasize that the Philippines is keen to continue nurturing the ties that helped produce mutual benefits for both our economies, our organizations, and our peoples.
Let us achieve many more milestones together.
Thank you very much for this opportunity and good afternoon to you all.
Image credits: Troi Santos