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U.S. Business Confident in Arroyo & Her Team; Sees New Chapter in US-Philippine Relations
Series of announcements illustrate
U.S. business confidence in the Philippines; US ASEAN Business Council to lead major
business mission to Philippines in April 2002
(Washington, D.C.) Following a private meeting this afternoon with Philippine President
Gloria Macapagal Arroyo, the US-ASEAN Business Council expressed confidence in the
Philippines, and identified five areas in which cooperative activities could be undertaken
to promote increased trade and investment between the U.S. and the Philippines. These included the ASEAN Free Trade Area
(AFTA), the Philippines’ position as a hub, eCommerce, energy development, and
agricultural productivity. In addition,
several U.S. companies announced new business ventures in the Philippines worth $1.7
billion, and the US-ASEAN Business Council announced that it would lead a major U.S.
business delegation to the Philippines from April 22-26, 2002.
“We are bulls on the Philippines. The
story is people. We like the talent of the
Philippine people. We like President Arroyo
and her economic team," said US-ASEAN Business Council President Ernest Z. Bower. "We enjoyed a frank and open dialogue with
President Macapagal Arroyo and her Cabinet today. It
is clear that her government is determined to make the Philippines competitive within
ASEAN and the broader Asia Pacific region. We
identified several areas in our discussion today where the Philippines has real potential
and can leverage its strengths to create jobs, enhance productivity, boost trade, and
attract foreign direct investment.”
- Philippines as a trade
leader. The Philippines has been a leader
in Asia and ASEAN on trade liberalization. The
US-ASEAN Business Council encourages this trend, including its continued commitment to the
ASEAN Free Trade Area (AFTA). The
implementation of AFTA is crucial to the Philippines’ competitiveness and continued
attractiveness to foreign direct investment. The
Council also urged the Philippine and US governments to begin a study on the potential
benefits of a bilateral Free Trade Agreement (FTA).
- Philippines
as a hub. The Philippines has already
positioned itself as a hub for the air express industry, and the potential exists for the
Philippines to play this role in other sectors, including information technology,
telecommunications, and life sciences. However,
to promote its comparative advantage, it must make progress on areas such as rule of law,
effective reduction of corruption, investment in infrastructure, more efficient tax
collection, and competitive customs and labor regimes.
- Philippines
as the human link in global eCommerce. The
education, expertise, and adaptability of the Philippine people is a great comparative
advantage, one which has been recognized by investors who are building regional technical
support, engineering, and software development operations in the Philippines. The country could compete with India and
other world-class competitors, but to do so it must strengthen intellectual property,
infrastructure, and education.
- Philippines as a model
for efficient energy development. The
first major reform that President Arroyo enacted was the National Energy Reform Bill. Implementing regulations are still being
finalized, but it is in the interests of Philippine and U.S. businesses and citizens alike
to promote an open and efficient model for energy development in the Philippines. Key issues include pricing power, independent
regulator, and contract sanctity.
- Agricultural productivity
through technology. Enhancing
productivity in agriculture through technology is central to the Philippines’ poverty
alleviation and rural development efforts. These
objectives could put the Philippines in a leadership position in promoting the Open Food
System model for agricultural trade liberalization and a science-based approach to
biotechnology. To support this dialogue, the
US-ASEAN Business Council will be working through its Center for Technology Cooperation
(CTC) and its food and agriculture working group to develop training and education
programs on biotechnology.
In a signing ceremony prior
to the discussions with President Macapagal Arroyo, several U.S. companies announced new
agreements or ventures in the Philippines. Ford
Motor Company announced an ASEAN Industrial
Cooperation (AICO) project under which it will rationalize manufacturing activities at its
operations in Thailand and the Philippines, a project which is expected to result in
US$1.2 billion in intra-ASEAN trade over the next five years. Sun Microsystems signed
a Memorandum of Agreement which will forge an alliance to co-market services to Philippine
customers and international software and IT service providers. The project will contribute
to the capability buildup of local IT companies to meet international standards. Kellogg Brown and Root signed a Memorandum
of Agreement with the Subic Bay Metropolitan
Authority for the rehabilitation and operation of ship repair facilities. Other Memorada of Understanding/Agreement involved
a financing program with Salomon Smith Barney and a Manila International Airport Project
with Futrex Inc.
“The series of agreements we have seen today illustrate the underlying confidence in the Philippine economy and President Arroyo’s leadership,” said Alan Foher, President and CEO of Edison Mission Energy, and Chairman of the US-Philippine Business Committee. “As a result, the US-ASEAN Business Council will organize a large U.S. business mission to the Philippines next April, to further explore opportunities in that country.
"US-Philippine trade
totaled nearly US$23 billion in 2000, an increase of 16% over 1999, and an increase of
nearly 60% in the last five years. According
to data from the Philippine Board of Investment, the U.S. has been the top foreign
investor in the Philippines for several years running, and the US-ASEAN Business Council
estimates the value of U.S. investment in the Philippines to be approximately US$7
billion.
Highlights of the US-ASEAN
Business Council meeting with the ASEAN Economic Ministers
The US-ASEAN Business
Council is America’s leading private, non-profit business organization dedicated to
promoting increased trade and investment between the United States and the member nations
of ASEAN. For information on the US-ASEAN Business Council or general information on the
ASEAN region, please contact John Goyer at jgoyer@usasean.org.
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