Australia: Bullish on the “Philippines” the fastest-growing economy in Asia

the chair of the Asia Society Australia, Warwick Smith

Australia bullish on Philippines

SYDNEY, Australia—the business sector in Australia is bullish on the Philippine economy, with many shakers and movers in trade and investment looking forward to partnering with the "next tiger economy in Southeast Asia."

At a business forum here Thursday night (October 25, 2012), the chair of the Asia Society Australia, Warwick Smith, enunciated the prevailing sentiment of top CEOs in this part of the globe.

"It would be fair to say that this has been a remarkable transformation that has taken place in the Philippines since the election of the President," Smith said.

He said that recently "one leading bank … indicated it's (Philippines) the fastest-growing economy in Asia, which is an area of concern to all of us here in Australia" amid the economic downturn in America and the debt crisis in Europe.

"Your commitment to growth and also the successful approach to a corruption drive as we've seen transformed the opportunities in the Philippines," said Smith, telling the President that this "transformation of the Philippines would not be taking place without strong leadership … which is about commitment."

Smith then quoted a portion of the inaugural speech of the President in 2010 which, the businessman said, went into the very heart of commitment to public service.

"My father offered his life so our democracy could live. My mother devoted her life to nurturing that democracy. I will dedicate my life to making our democracy reach its fullest potential: that of ensuring equality for all. My family has sacrificed much and I am willing to do this again if necessary," said Smith, quoting Mr. Aquino.

When Smith asked the President about the "industry, sectors, or services" he was looking into to really "bring the Philippines as the new tiger economy in Southeast Asia," the President said his administration would harvest "low-lying fruits" and focus on three particular aspects of the economy: infrastructure, tourism and agriculture.

Aquino did not mention the huge potential for mining investments in the Philippines, but his new mining policy, contained in Executive Order 79, was discussed during bilateral meeting in the capital Canberra Wednesday.

Smith also took time to quiz the President on the broader picture of finance in the global market, asking him if he had "an overall (medium-term) prognosis for where matters are going" with "leadership changes in China this year, the United States, Europe that's struggling."

The President said:

"I think there will still be pressures on everybody to become pessimistic or, if they want to be euphemistic about it, to be guarded. And when we were in the APEC (Asia Pacific Economic Cooperation) Meeting in Honolulu, Madame Christine Lagarde talked about the need to enhance domestic liquidity," he said, referring to the managing director of the International Monetary Fund.

"And, to be honest with you, it really made me pause for a thought because it seemed like we were headed towards the same situation that existed before the Great Depression wherein everybody felt that they could successfully insulate themselves from the downturn in various other economies which, in turn, actually accelerated and deepened the recession and that led to the depression," he said.

"So one would do hope that man has a capacity to improve. Shouldn't this be the point in time that we should be finding ways and means to help the so-called 'weakest link' in the chain? So either we stand together or we drown together," said Mr. Aquino.

He noted that governments in Europe were being asked to finally address the situation that used to be the proverbial "can that got kicked down."

"I'm sure that very reasonable men and women are talking and that we will become into solutions that demonstrate our collective capacity to improve as species. So how long will the continued malaise happen? The conservative will say quite a bit but I tend to be optimistic as far as the human spirit is concerned. I think what we have managed to do in the Philippines will happen in varying degrees elsewhere. I can't tell you that we are about to crest the hill but I think we are approaching that crest. All it takes is a little bit of faith and optimism in our fellowmen," he added.

Asked by the INQUIRER in an interview to expound on how his administration would pursue this economic takeoff, he said:

"Basically they said the number one asset of the Philippines has to be the people. Therefore, it has to be investments in our people and that's why the massive investments in education and in health," he said.

Aquino pointed out that this "inclusive growth" meant that the poor should benefit from the economic gains.

He also cited the current efforts to match the job requirements of the local industries with what the educational sector was producing yearly.

Meeting the Philippine media over coffee right after the business forum, Aquino reported on the economic gains of his two-nation, five-day state visits to New Zealand and Australia.

In New Zealand, he said the government of Prime Minister John Key pledged to help the Philippines increase the expertise in harnessing geothermal power.

The Philippines and New Zealand are two of the two largest producers of geothermal power in the world, but it was New Zealand that helped the Philippines harness this alternative power source in the 1970s.

Also, Alliance Select Foods International, Inc. formalized its $2.18-million share purchase agreement to acquire 80 percent of Akaroa Salmon NZ Ltd., a pioneer in salmon farming in New Zealand.

The New Zealand-based firm is also a processor of fresh and smoked salmon.

"What is impressive is we are becoming a multinational," he said, pointing that the Alliance Select Foods, Inc. bought into a salmon farm.

Australian firm Austal will start building boats in shipping yards in Balamban, Cebu.

On its website (http://www.austal.com/en/about-austal/Overview.aspx), Austal says it is a global defense prime contractor.

"The company designs, constructs and maintains revolutionary platforms such as the Littoral Combat Ship (LCS) and the Joint High Speed Vessel (JHSV) for the United States Navy, as well as an extensive range of patrol and auxiliary vessels for defense forces and government agencies globally. Austal also designs, installs, integrates and maintains sophisticated communications, radar and command and control systems."

Telstra, a top telecommunications company in Australia which has about 10,000 workers in the Philippines, is seeking "further expansion and directly hiring their employees," said the President.

AG&P is also starting a 200-million project in Batangas, Aquino said.

AG&P is a modular engineering, fabrication, assembly and asset management services provider to the offshore and onshore oil & gas, mining, power and civil infrastructure sectors (https://agp.ph/).

MacQuarie Group, a banking and lending firm, has partnered with the Government Service Insurance System for a US$600-million fund to invest in infrastructure projects in the country.

Lastly, the Philippines also signed a new air services agreement with both New Zealand and Australia.

INQUIRER Business

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