Your Excellency, Secretary for Public Works and Highways, Mr Rogelio Singson
Your Excellency, Secretary for Transportation and Communications, Mr Jose Abaya
Mr Antonio Morales, Philippines Ambassador to Singapore
Mr Teo Siong Seng, Chairman, Singapore Business Federation
Distinguished Guests,
Ladies and Gentlemen,
Introduction
Good morning. It is my pleasure to join you at this morning’s Philippines-Singapore Business Council Forum. Let me first extend a warm welcome to all our friends and colleagues from the Philippines.
Impressive economic growth in the Philippines
The Philippines has achieved tremendous progress in enhancing its business environment and competitiveness over the last decade. It has enjoyed stellar growth rates averaging 6% between 2010 and 2013, credit rating upgrades and macroeconomic stability. These have contributed to an improved business climate and the Philippines recording the best growth in Asia after China, last year1. In the latest World Economic Forum (WEF) Global Competitiveness Report, Philippines also jumped seven notches, coming in at 52nd place out of 144 economies. More significantly, Philippines has moved up 33 places since the 2010 WEF Report, which represents the largest progress any country has made. These achievements are a testament to President Aquino’s vision and stewardship in generating economic growth.
The Philippines’ economic resurgence driven by domestic demand and economic reforms has led to renewed interest from Singapore and Singapore based companies. As the Philippines economy continues to grow, demand for consumer goods and infrastructure development in segments such as transportation and housing will rise in tandem. There are hence immense opportunities for companies to expand and serve the needs of the Philippines’ 98 million population.
Bilateral Relationship Between Singapore and The Philippines
Singapore and the Philippines enjoy warm bilateral and economic ties. In 2014, bilateral trade between both countries hit S$15 billion, a 2 per cent increase over 20132, making Singapore the Philippines’ 4th largest trading partner world-wide and top trading partner in ASEAN.
Investment linkages between both countries are strong. Singapore companies such as Keppel Corp have a longstanding presence in the Philippines, operating in Subic and Batangas. To further promote economic partnerships between both countries, IE Singapore established an overseas office in Manila last year.
Advancing Regional Economic Integration
Singapore and the Philippines are also working closely on advancing regional economic integration through initiatives such as the ASEAN Economic Community (AEC), the Regional Comprehensive Economic Partnership (RCEP) and the Asia Pacific Economic Cooperation (APEC).
ASEAN Economic Community (AEC)
ASEAN has tremendous economic potential. It is a huge market of more than 600 million people, with the third largest combined GDP in Asia, after China and Japan – at nearly US$2.4 trillion in 2013. ASEAN’s annual growth is projected to average 5.4 per cent between 2014 and 2018. With a growing middle-class, ASEAN is an important consumer market. Foreign companies are thus increasingly keen to explore and tap on ASEAN’s growth.
ASEAN Member States are working to realise the ASEAN Economic Community (AEC) by the end of this year. Regional integration is well on course. First, businesses can operate in a relatively stable and predictable environment as close to 90 per cent of products enjoy zero import duties under the ASEAN Trade in Goods Agreement. Second, the 10th package of commitments under the ASEAN Framework Agreement on Services is set to be completed by 2015. What this means is that businesses can expect a progressive reduction of services barriers, such as foreign equity limits in the ASEAN countries. Third, the ASEAN Comprehensive Investment Agreement helps to facilitate investment flows and enhance protection for investors in ASEAN.
Nonetheless, the challenges facing ASEAN have grown. Beyond 2015, a more integrated and cohesive ASEAN is needed to tackle emerging and cross-border challenges such as inclusive growth and environmental sustainability.
Regional Comprehensive Economic Partnership
In developing its post-2015 vision, ASEAN will be guided by the need to be bold and ahead of the curve. This will help to enhance ASEAN’s centrality in regional and global architectures. ASEAN has also embarked on the Regional Comprehensive Economic Partnership (RCEP), which comprises ASEAN and its six regional partners - Australia; China; India; Japan; Korea and New Zealand. The RCEP aims to be a modern, comprehensive and high-quality agreement that aims to go beyond the existing ASEAN Plus One FTAs to accrue benefits for our businesses and communities. It is a significant initiative to transform the region into an integrated market comprising over 3 billion people and a third of the world’s GDP. With our markets better integrated, we will be more attractive and competitive.
Asia-Pacific Economic Cooperation (APEC)
This year, the Philippines is chairing APEC. The theme is “Building inclusive economies, building a better world”. The Philippines will be leading APEC on initiatives relating to SMEs and economic resilience. These issues are pertinent to the business community. We would like to see progress at APEC towards realising the Free Trade Area of the Asia Pacific (FTAAP), an important initiative aimed at deepening regional economic integration.
Conclusion
I encourage all participants to make use of today’s Forum to build networks, forge partnership and strengthen the economic linkage between the Philippines and Singapore. I wish you a fruitful and productive session ahead. Thank you.
1 Source: National Economic and Development Authority (Republic of the Philippines)
2 Source: IE Singapore