FEB.

12, 2014

NR # 3375C

Message of Speaker Feliciano R. Belmonte, Jr. Meeting with Joint Foreign Chambers and Philippine Business roups !" Februar# "$!%

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Fellow House Members, leaders of the different business chambers, and our guests here today, welcome. It is a distinct honor to address you in this Meeting of the leaders of the House of Representatives, and the leaders of the Joint Foreign Chambers of Commerce and hilippine !usiness "roups. It is certainly a propitious time to further pursue our successful partnership and build on the reforms we initiated during the #$ th Congress. %s you all &now, the hilippine economy grew remar&ably well in '(#) to *.' percent from +., percent in '(#', beating government and private growth forecasts, and ma&ing our economy the fastest growing among %-.%/ member0states. 1he country also continues to improve significantly in &ey competitiveness and governance indices, such as the "lobal Competitiveness Inde2, .ase of 3oing !usiness, the Inde2 of .conomic Freedom, and the Corruption erception Inde2. Moreover, the hilippines has been accorded an investment grade by all ma4or credit rating agencies. Indeed, the reforms we have envisioned are bearing fruit before our eyes. 1he resident5s emphasis on good governance or '(aang Matuwid) is steering the hilippines to a path of high and sustained

growth, and has also brought the country into the international limelight. 6hile we are pleased with these developments, there is, however, a nagging concern that our economic growth has not commensurately increased employment and has not significantly improved the lives of poor Filipinos. %midst the economic growth, unemployment rate increased in '(#) and stood at *.# percent compared to *.( percent in '(#'. 1his translates to '.7 million unemployed persons or an increase of *(,(((. -ince '((+, the number of unemployed persons in the hilippines have remained the same at around '., million. %nd while underemployment slightly improved to a national figure #7.) percent from '(.( percent, underemployment is actually much higher in the poorest regions of the country. It should not, therefore, surprise us that poverty incidence in our country has barely improved. 8fficial government estimates show that from '+.) percent in '((7, poverty incidence declined to only '$.' percent in '(#'. 1his means that one out of every four Filipino continues to live in poverty. 1he survey of the -ocial 6eather -tation conducted in 3ecember '(#) reported that $$ percent of Filipinos consider themselves poor, a much higher figure than the official estimates. It is worth noting that despite their relatively lower economic growth rate in recent years, our neighboring countries in the region continue to en4oy low unemployment rate. Malaysia5s unemployment rate has 4ust been around ) percent, while 9ietnam5s and 1hailand5s unemployment rates have been only at #., percent and (.* percent, respectively. Malaysia, 9ietnam, and 1hailand have also made significant strides in reducing poverty.

% stri&ing feature of these countries is that they are more open compared to the hilippines. 1hey have managed to attract more foreign investments, and to e2port more than the hilippines. Conse:uently, they have bigger industrial and manufacturing sectors, and their economic growth have largely been driven by investments and e2ports, critical contributors to success in 4ob creation and poverty reduction. 6e can never overemphasi;e the role of trade and investments in economic development. 1rade and investments 4ump start and sustain economic growth, while providing 4obs that are essential in reducing poverty. For this reason, I am pushing for the rela2ation of the restrictive economic provision of the Constitution regarding foreign investment. 6hile the macroeconomic fundamentals of the hilippines have been impressive, its share of foreign direct investments pales in comparison with those of other countries in the region. lease consider the following<

In the %-.%/ region, the hilippines5 share of foreign direct investment during the period '((70'(## averaged only #., percent. Singapore got the lion5s share of F3I at $= percent, followed by Indonesia at #$ percent, Vietnam at 7.# percent, Malaysia at ,.7 percent, and Thailand at ,.+ percent. 1otal F3I of the Philippines for the same period amounted to only >-?=.$ billion. lease ta&e note and remember well that this is less than a fifth of the foreign direct investment that went into 9ietnam @>-?').( billionA.

I am hoping that by introducing the phrase Bunless otherwise provided by lawC to provisions of foreign ownership restriction in our constitution, we can provide the &ey that will unloc& the barriers to of entry of needed foreign investments and the creation of 4obs. I hasten to add that the amendments will 4ust be a &ey, because Congress would still need to pass the appropriate laws. !ut I believe, as with most, if not all of you, that this easing of foreign ownership restrictions will provide a strong and une:uivocal signal to foreign investors interested in the hilippines. %s the Foundation for .conomic Freedom5s an eminent economic thin&0 tan& led by its resident, Mr. 1oti Chi&iamco pointed out< Opening up our economy to more foreign investors, especially in strategic industries where foreigners are presently prohibited from owning a majority, will help improve competition, increase consumer welfare, lower prices, raise productivity, and facilitate technology transfer 1he establishment of the %-.%/ .conomic Community is practically here. %round this time ne2t year, we e2pect the %-.%/ to commence its transformation into a single mar&et and production base with free movement of goods, services, capital and s&illed labor. If we do not ma&e our economy attractive for foreign investments, we would not be able to ma2imi;e the benefits from economic integration. Investments will pour in and factories will be built in our neighboring countries, and they will be e2porting goods to us while we e2port our wor&ers to them to run their factories. I5m sure we all agree that this would be a most sorry scenario. 1he thing to do is to entice foreign investments in our country, so that we would not have to e2port our labor, and our wor&ers would not have to leave their families in the name of higher incomes abroad. Indeed, many of our %-.%/ neighbors are already training their sights

not 4ust into the %-.%/ community. !runei, Malaysia, -ingapore and 9ietnam are already ta&ing part in the discussion led by the >nited -tates for the formation of the 1rans0 acific artnership, or 1 , that is intended to boost trade and investments among its member countries. 1he #' countries currently engaged in the 1 discussion have a combined "3 that is almost =( percent of global "3 , and about a third of total world trade. It is with certainty and urgency that I say that if we do not rela2 the restrictive provisions on foreign investments in our constitution, the hilippines would not be eligible to be member of the 1rans0 acific artnership and we will be left out. Det me 4ust assure all of you, though, that our push for this specific amendment of our constitution will not sidetrac& us from acting on other legislative priorities of Congress. Just last 1hursday, February +, I together with Ma4ority Deader !oyet "on;ales, Minority Deader Ronnie Eamora, met with our -enate counterparts, led by -enate resident 3rilon, to review the goals of the #+th Congress and how to better resolve differences and conflicts in the legislative process, which impede the prompt passage of crucial measures. 6e also agreed on a list of bills that we will vigorously pursue in the two chambers. I am glad to note that there are vast similarities between the list of priority measures that we agreed on and the list of priority measures of the Joint Foreign Chambers and the hilippine !usiness "roups. 1hese include among others, the< !angsamoro !asic Daw, Consumer rotection %ct Dand >se olicy

Fiscal Incentives Rationali;ation 1a2 Incentives Management and 1ransparency %ct, %nti0trust or Competition Daw, Freedom of Information %ct, and 6histle !lowers rotection %ct, and amendments to the< Central !an& Charter, !uild08perate01ransfer Daw, Cabotage Daw .lectric ower Industry Reform %ct, or . IR%. Investments and Incentives Code of the hilippines, -andiganbayan Daw, and 6itness rotection %ct.

%gain, let me e2tend my deepest appreciation to the Joint Foreign Chambers of Commerce and hilippine !usiness "roups for the successful partnership that we have forged together. 1he reform measures that we were able to institute together were borne out of our dialogues during the #$ th Congress. 1his is by no measure, a modest gain, I fully believe that we are capable of accomplishing more. Det us therefore continue this partnership and steer the country towards inclusive growth. 1han& you for your support and may the rest of the day be productive for all of us.