IN a two-hour interview with the BusinessMirror and Philippines Graphic on Thursday, President Aquino described in detail how his administration has managed to derive opportunities from its problems, and its efforts to shield the Philippines from uncertainty plaguing the rich nations of the world and thus, help it survive another possible global financial crisis.Renewed business confidence in the Philippines, Mr. Aquino said, is reflected in the re-investment of firms that had previously written off the Philippines as an investment site. He said the potentials of coconut water as a viable export product offers a possible resolution of the coconut-levy fund issue. And he is convinced that the Philippines won’t just have to dream of becoming a manufacturing country—by all indications, it can happen.
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The President also candidly fielded question on why it may be better for him not to have a First Lady for the moment, what keeps him going despite the difficulties of his job, how the presidency has further deepened his trust in God to guide his fate, what he looks forward to, and why he believes that the Filipino, given the opportunity, “will shine over time.”
The following are excerpts from the interview with Mr. Aquino.
What are your projections for 2012?
How do you describe something that’s a moving target? That’s the crux of the matter….How do you situate yourself in something that is rapidly evolving and changing and posed with so much uncertainty? You’re also cognizant of the fact that there’s supposed to be…a subset of economics discipline that talks about perceptions, and the school that deals with perceptions basically says that what people perceive the situation to be would be self-fulfilling….
Having said that, our administration, when we started, was bequeathed quite a whole set of problems, so much so that I won’t say that we’re the best experts—omniscient prognosticators of all of these problems—but it has given us a confidence in handling these problems to have an attitude that every problem presents an opportunity.
What is the opportunity? The emerging markets of which the Philippines is a part of presents high growth rates for people who are looking for investments. So it behooves all of us to have that environment where we correct the so-called issues against us. So we welcome all of these investors who are looking for that safe haven. The problems elsewhere in the world can translate into opportunities for us and you can see that in so many fields.
And we’re trying to be more and more nimble. For instance, coconut water….There’s so much interest in the coconut industry right now how to participate. I think I should point out that one of the major drinks manufacturers Coca-Cola is still not yet involved in the coconut water so there’s even more potential and 7 million cases I think are primarily for America….So what is the opportunity presented? We need to revive the coconut industry….
The upside is there’s so much potential for us still; the downside is we have a moribund coconut industry. So that gives fresh impetus to solving the issue with the coco-levy fund. In broad strokes, what we’re headed for is we’re going to propose basically areas where farmers can demonstrate that they participated in the fund will be given their due share. We’re told that so many people have not kept their records. So the fund will be distributed in terms of promoting the industry, more scholarship, etc., for areas that have been traditionally considered primary coconut-producing areas. So the fund would be utilized instead of being caught up in all of the legal lingo. But it’s still nascent, we have to talk to all of the stakeholders and get everybody to agree to it….
What are the complaints that we have? For instance, one of the things that we already talked about is you’re attracting everybody to come in and they come in, they have to pass through so many hoops just to be able to start their business. So they really made inroads. From endless hours and days of having to secure registration, the focus is about 15 minutes. And 15 minutes includes the time that you’re actually inputing on the database the details of your firm. That assumes of course that you’re registering something that nobody has registered before….
At the same time, I’ve called the attention of several LGUs who have members who are not on board. There’s a barangay that did not want to issue permits to a substantial firm. And the main reason was he wanted to become the sole employment agency that would provide the labor. This was pointed out to the mayor and the mayor is attending to it.
We’ve instituted so many Peza zones primarily to insulate them from local politics, etc. But there’s also a gradual that we hope to accelerate the process whereby everybody thinks long term, at least medium term. Nobody thinks about the next elections as the barometer.
In terms of peace and order, I think the PNP can rightfully claim that especially for the sensational crimes, the solution rate—when you say solution, they used to say solved by identifying suspects. Now when you say solved, arrested and charges have been filed. I’m sure you’ve seen the more recent sensational ones that have been solved in a couple of days.
Toward that end, I’ve tasked them already to start mapping out a comprehensive plan. Are there LGUs that are in cahoots with lawless elements, and we’ll be going after them. When you talk about loose firearms, it will not be a headline that we’re going after loose firearms but we’ll be instituting.
Now, we do not want to be solving one problem by creating a bigger problem. We are gathering the necessary intelligence, gathering also the necessary evidence, and we will start demonstrating by prosecuting those that are—sa Tagalog, mas appropriate, namamangka sa dalawang ilog—nasa gobyerno at kasab-wat ng lawless. So bahala sila kung akala nila nagbibiro kami. But we are very, very close to filing the appropriate charges and arresting several. Hindi ko muna ine-name.
I guess what I’m trying to say is as opposed to before, everybody would just say this is a problem, that is a problem—we are really trying to find all of these problems and address it. And my focus is, I’m not going to run. I don’t have to tread lightly on whose toes I will step upon. Why tolerate a situation that shouldn’t be there to begin with?
When I was talking to Butch Abad recently, part of the thing that we’re also quantifying is the leakage due to corruption. So when you have less expenditures, it does not necessarily mean that we really didn’t spend. You have the same project but it was brought in at the right price. And the difference is substantial. So somebody will look at the same statistic and say we didn’t spend enough. Then we say, if we spend to get this, we got it, but we spent more efficiently. Sorry kung mahaba ang answers ko.
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What are your thoughts on the developments happening in Europe? As an emerging economy like the Philippines, do you think this is a source of concern?
Of course [it is a source of] concern. I guess to varying degrees, we really are dealing with trading blocs as opposed to nation states. We have Asean centrality. If there’s a singular nation state, perhaps it’s America or Japan, but even Japan has developments that happened in China that affect it. And in the European bloc, when you read articles, for instance, in The Economist, and they talk about confidence in the banking system, the inability to raise funds that have a gestation of over two years. What projects do you fund in two years? They’re smaller scale. The emphasis is on fast turnaround. When everybody is jittery, then perhaps there’s a tendency to go into hoarding of goods. That doesn’t necessarily redound to increased productivity.
When I was a student in economics, they were always talking about stagflation leading to contraction, and everybody has to be conscious that once everybody believes that it’s going to contract, nobody really knows up to what point it will contract. Therefore, you want to do what you can to improve the stability of the situation; lessen the uncertainty.
So toward that end, for example, we deal with Japan, there is also that focus of how do we help them recover at the soonest possible time? Are there incentives, for instance, that we can give their firms that will relocate here because of their issues with power? And things like that.
So we help Japan we also get new investors here. So it’s a win-win situation.
I guess the thrust of my administration has always been we cannot look at our interest isolated from everybody else’s. When I was young, the song, “No Man is an Island” is more apparent these days, and when we make decisions, we always look at how do we both gain from this relationship so that we go out of this period of uncertainty faster. It all revolves and devolves around trust.
You’ve implemented a P72-billion stimulus package. With what’s happening now, do you think there’s a need to put in more measures next year in order to shield the economy from this global uncertainty?
Up to what extent can you shield the economy from everything that’s happening elsewhere? But what we’re trying to do is really to improve the amount of economic activity within the country.
For instance, when we went to China, we got to talk to two groups, they’re both interested in the tourism aspect. One of the statistics that needs a lot of work is that we send something like 800,000 tourists to China; we get 200,000 back.
[It’s] very welcome to have two big groups [of Chinese investors]—one of them is connected to an airline. One of the two groups has already committed to building 30 hotels. They will build about 10 in my term, they are already constructing two.
The commitment of the Chinese government [to the Philippines] is total tourism will be around 2 million tourists by 2016, and also [increased] trade. In terms of trade, there’s this group. I think it’s Dongfeng. They’re into cars, trucks, heavy equipment, etc. They’re looking for a 10,000-hectare port. In Subic, I understand there’s a component that’s primarily Taiwanese firms and they want something similar so they’re looking at several areas already.
Again, what is the basic precept? You invite businessmen in, you clearly state the rules, then you make the rules binding and not fickle; not changing. The endpoint there is talagang cooperative environment. You come in, you invest, you give us the jobs, you increase the economic activity. In return, we give you that opportunity by which you can make reasonable profit; a good profit.
The heartening thing is that several firms that have written us off because of bad memories are already back. And some of them are actually beyond the stage of looking for investments….
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There’s renewed confidence in the way we’re running things?
Let me share this with you. I just got this the other day. There’s a building that’s being developed in the Fort so they had an original plan. The impression is they got oversubscribed with foreign investors, and they have to conform to the 60-40 equity rule. So the solution was to increase the size of the building, parang add more floors to be able to comply, so the person talking to me about it was saying that their particular firm had to go and travel to so many places because there was really just that demand. That person was saying na parang burnt out na siya because he’s been out of the country for like a month and establishing various networks because there really is that interest here.
Some of the things that you said in the last minutes are very interesting. The one phrase that you used was “more efficiency.” One of my greatest concerns is the survey that the World Bank did on ease of doing business in the Philippines. We rank right at the bottom with Sudan, Syria and Madagascar, and I find that troubling. What specific ideas have been presented for that sort of thing not only for foreign investments but also for local investments?
[Let me cite] this very small entrepreneur, the first guy to register in that new system or new process [of registering a business]. I think the guy is setting up several bakeries and he was guided through the process. Right before my eyes it took him five minutes to finish the registration process and what they’ve done there was something like 16 documents that had to be submitted; it became eight and they’re still looking for ways to reduce that.
The other aspect is it used to be when you registered your name, you registered for the entire country and they expect an increase when you register. I think they have a provision now that you can register your business to have a permit only for a particular barangay, and the idea being to minimize the expenses you have to incur.
The seminars that the DTI and DILG have been conducting to really re-orient a lot of our LGUs is also part and parcel of the process. Then you review so many things, the mining policy. I guess at the end of the day, when I was talking to various business groups in the country, we told them we just have one promise to you. No. 1, there’s a level playing field. It proceeds from the philosophy that says if there is a favored business entity, then by definition everybody else operates at a disadvantage….
Now we can face anybody and say, for instance in the PPP project, there are so many proponents, whoever submits the best proposal gets it. And so now they’re focused on really proving their business acumen and having that certainty that if they maintain their advantages, meaning in terms of their own efficiencies, there are business skills, etc., demonstrated then there’s certainty that they will be awarded the necessary projects. And that, in turn, I think has promoted even their capacity to start studying the various infrastructure projects that we have proposed….
We have a law that says anti-red tape and we also have actually tasked the DTI. I said, you know your primary function is ease of doing business, areas that we are aware of that need dramatic improvements. But a lot of it is systemic and institutional and will take a little time. Things that can be done by mere change in fiat are being done. But others are retraining, re-orientation, etc.
Recently, 41 nations were given the ban status on where OFWs should be deployed. And at first glance it looks like a laudable thing until we find out later that there’s Zimbabwe where there are only 10 OFWs with a $300-a-year remittance. The listing doesn’t really apply where OFWs are actually abused….Do you think we should also come up with a list of countries where we are actually being abused so that OFWs can know what they’re getting into before they go there?
Basically the DFA and DOLE are in touch with each other and are working on it. That ban is mandated by the law. There is a question as to when it should be, the deadline is set to name it. There are inputs coming from the DFA that it harms certain diplomatic relations. DOLE and POEA…will come up with a joint recommendation to me.
Will we say where our people will be at risk? I think that should automatically be done. As far as the OFW issue is concerned, the estimate is about 10 million. And I’ll be very honest about what we have and what we inherited.
You talk to the BI [Bureau of Immigration], they will tell you the number of people that have left. You talk to the POEA, you talk to OWWA, you talk to so many people, basically you talk to DFA, you talk to each one, you’ll be given a different set of numbers….
So I’ve been very particular with all of these agencies concerned, sabi ko the first we have to know is to really find out who is where and then tell us the problem that we have to confront. They leave as tourists, suddenly they become workers there. So one of the things that I asked the BID to do is on opposite sides of the ledger, [write down] those who are in and out. Somebody left and the person who didn’t come back are highlighted….There must be a reckoning period. Quarterly, six months, a year, and have a handle on who is where….
What about daily abuses that OFWs go through. Like in Saudi Arabia, there are mysterious deaths happening around 20 plus already?
Again, there’s a fund that takes care of the legal fees. The career members of the DFA that are appointed as ambassadors and confirmed by the CA that have been deployed have basically one instruction before they left and I said, your primary function as a representative of the state is to protect our citizens. Everything else becomes secondary. I will recall you as soon as I find out that you are deficient in that primary responsibility. And to a large degree, most of them, if not all of them, have been attending to that primary directive. I really re-emphasized that their function is not all the cocktails and all of this ceremonies. And they have been giving us quite a bit of intel also on developments in various parts of the world, that gives us more information on a timely basis to be able to situate ourselves properly. I expect more and more improvements especially under Secretary [Albert] del Rosario.
The BSP has pegged $75 billion as our foreign reserves, which mostly they said came from remittances. It’s a record high in a sense. I think we’ve been posted as No. 27 higher in foreign reserves than Canada, Australia and even the UAE earlier his year. Most of these, the BSP said, came from OFW remittances. In your term, would investments take over remittances? Do you see a shift in the major resource of dollars from OFWs to businesses, probably investments?
If I’m not mistaken, it’s happening already. I go back to the three legs: remittances, BPO and now agriculture. Then, of course, the fiscal situation has also changed. We’ve managed to shift some of our loan portfolio away from dollar based to peso based and made a substantial amount we’ve retired. The first was the global peso bond and that was followed….That resulted in total interest reduction payments for the first four months [P23.9 billion savings] plus collections have increased from BIR and Customs. Siyempre you want more and more.
One of my dreams, for instance, was the coming back of manufacturing, or becoming a manufacturing entity. Two to three years ago, everybody was saying services; we cannot compete; our electricity is so high, etc. But even given these conditions, Dongfeng is coming in. Yokohama will be doubling production from 20,000 tires a day in Clark to 40,000 by 2014, if I’m not mistaken, and then further beyond that.
Even proposals for Nlex-Slex connector. We are already at an advanced stage of the design, then somebody comes up and says, there is another route that will bring in the project at roughly third of the price. Biglang, oops, one-third? Can we see it? And you’re talking billions from P20 [billion] plus to P7 [billion] plus. Different route, different conditions. And beauty of it is we own already the majority of the right of way for that new proposal. But it has to go through the process. It has to go through Neda and all of that. But if it’s cheaper then it comes in earlier then perhaps 2014 we really have that connector which facilitates trade between the North and the South and everything from tourism, to manufacturing to what have you.
Tapos ’yung Clark, again the Chinese are really the most aggressive, saying we need 10,000 for our own port facilities, free zone, free port. If you can bring it in areas like Zambales that really need substantial alternatives, I’m all for it, say Thank you.
Shipbuilding also, we’re already fourth biggest. And they’re expanding. They are fully booked in bulk carriers. There’s a glut supposed to be in the market but these guys are fully booked. We have AG&P. A welder in America will make $200 an hour. They compare with the same welding skills at $8 an hour where there’s profit already. So they shipped that British petroleum plant from Batangas to Indianapolis. I never thought that we would get to that point where we’re fabricating and shipping factories across the world.
And again, there’s confidence. Things that have been there, the guys who have been successful managed to navigate but that doesn’t mean we’ll tolerate that which can be changed and can be improved. And I keep pressing everybody, where can we get better efficiencies out of all of this?
The overarching goal is to make the substantial changes felt by everybody, especially the target now is the bottom quintile and make them participatory, so there is inclusive growth. If that happens, the empowerment in terms of education, in terms of making them aware of what their rights are, or even the expectations of government, hopefully will be ingrained by the time I step down; that everybody just builds up on that which we had already set up. We can’t change everything in six years but we want the momentum that becomes difficult to resist for people who would want to go back to the previous status quo. And that I think is attainable.
What’s the toughest part of the job?
You have training in handling the country’s problems in the Legislature. The major difference is, there you can liken yourself to being a student. Responsibilities were not directly yours. You can pick and choose your advocacies. In this case, the buck literally stops with me on anything and everything, whether or not we had any participation in creating the problem to begin with, but the solutions should be ours and should have happened before we assumed office.
During this recent break, several of my Cabinet members were telling me to take a break. And I wanted to ask them, why do you think I should take a break? After one time, I looked at them and said, I don’t see any difference.
But I look forward to that time that I can have an easier life and a sense of having a normal life. You know, when you wake up and you can do it gradually as opposed to my body is now attuned to sleeping like five hours, and from dead asleep to fully awake is like a one- or two-second transition. Then you’re reaching for the phone, opening it, getting the papers, glancing through it, reading the news capsules, reading the briefing folders. So there’s no warm-up and there’s no schedule as to when they will give you whatever problem it is.
When the Egypt situation happened, I think I got the information not from the usual sources, one would say for instance, it would have been the DFA. No, I got it from [Presidential Communications Development and Strategic Planning Office Secretary] Ricky Carandang. [He said] “Sir, there are tanks in Tahir Square,” at about 1 in the morning or 1:30. You go to CNN and there’s a bit of a frustration not being able to—for instance, I wanted to call up Bert Romulo at 1:30 in the morning and say, perhaps we can look at some more developments [but I didn’t].
But you couldn’t really let go to the situation because I have to be able to say that I’ve done everything I could before I put it down. So I wound up using the phone and leaving messages for everybody that I thought should have certain inputs and should be part of the issue. Then I woke up my aide and I told him, okay at 7:30 a.m. you start calling them up and tell them read the messages and I want the results by 12 o’clock. And we were at the point that we were reforming.
To be honest with you, there was oath-taking for members of the DFA [under Romulo], and I almost postponed all of it because I said, ‘How can you come up with that plan, you’re the experts and that’s your plan for handling?’
In Egypt, part of the tension is we have 6,000 more or less Filipinos there and they’re primary students and domestic helpers and the issue is they would have less ability to be able to fend for themselves.
And again, you know, seeing tanks, seeing that cavalry charge of these people who were renting horses. What’s happening? There was no…the buildup that you read in the media versus the official reports that were saying this is getting more tense; it wasn’t there. So I had to handle it in effect on the fly. And of course, previous to that I am not really that keen on foreign affairs because there were so many things on my plate right here. Suddenly it’s not on the job but I had a crash course in coming with everything that had to be done.
You know, at first, really there’s so many achievements that have been done already so that’s what sustains you. In either the House or the Senate you really put up very good positions for your advocacies, but there were so many times that you felt you were hitting your head on the wall repeatedly.
You don’t feel that way now, that you’re hitting your head on the wall?
When from one point through 3 million tons [of rice] that cannot be sourced here to suddenly thinking about surplus?…So again, when we were trying to understand the [rice] problem initially, is the issue land reform? What are the issues from a country that achieved for a few years self-sufficiency to being the source of educational institutes that have trained a lot of these senior ministers who were now exporting to us? Why can we train and teach them and why cannot we practice to suddenly having the results? It really, really brings my day way, way up.
There are so many of those problems that you thought would be intractable that are not. Look at those we are trying to help with the conditional cash-transfer program. These guys were really content to just survive that next day. And give it perhaps another six months, we’ll be hearing how their children became if not honor students maybe regular students who achieve…NSAT [National Secondary Assessment Test]. Baka doon we’ll see certain results already.
We’re tackling the higher education setup also. We’re trying to redress the issue of too many institutions grabbing scant resources. Too many of them are in that pie and they grab each other’s faculties, good programs become not as good. So how merge-consolidating all of these resources without being able to afford the opportunities for everybody?
On a personal note, do you think the presidency would have been easier with a lovely First Lady by your side?
There’s a politician senior to me, but basically the comment that he reminded me of is the grass is always greener at the other side. I’m sure there will be advantages to having a partner but I’m sure there will also be disadvantages.
So at the end of the day, you know, there has been so much uncertainty in our lives especially after martial law was proclaimed—the idea of right and wrong and championing the right over the wrong. And you get to the point that you trust God na lang. I’ve tasked to do that which I can; sometimes a lot of times I got further than what I thought was possible but at the end of the day, you will be reminded that there are things that are not in your control. He will provide that which you can’t, and I’ve learned that through so many instances through the course of my life....
Again, if I would have had a choice, I would have wanted to inherit a government that was functional, that has embarked on the reforms that we’re embarking now and I would have been at the tail end of reaping what others have sown, but that is not my fate. So I will not cry over that which I can’t have.
What would be the disadvantages of having a First Lady at this time?
Alam mo naman, there’s an industry that seeks to criticize me in everything. So I will have somebody beside me who will be the magnet of all of the criticisms. And especially when they are not accountable for what they say. I think you are witness to how vicious it can be.
But you don’t seem that affected by the viciousness. You take it quite well.
Why would I spend time debating on something where, you know, if somebody comes out with an outright lie. If personal, you know, habaan mo na lang ang pasensiya mo. But if it does impact on something which impacts on the people, pasensiyahan tayo dito, talagang away kung away ang gusto mo. But we are focused. We have six years. In six years, this is the monumental task. What are the milestones that you want achieved in each significant step? In the first year, in the second year? Being sidetracked from that guarantees you not attaining.
At the end of it all, 2016, June 30, 11:15 more or less you will go and say—but you’ve said it before that—I inherited this, this is what I’m leaving you, please take care of that which cost a lot of tears, blood and sweat, and I’ll see you all the next time or something, I don’t know.
What is your thought on the Filipino now that you’re in the presidency?
I’ll give you…what reinforced, rather, what I thought about [the Filipino]. Let me not name the city. The people I think are not given the level of intelligence that should be. What does that mean? You have a corrupt mayor. The corrupt mayor come fiesta time is asked by this barangay that had 16 sitios, each sitio would ask for assistance for their version of the fiesta. The mother barangay will ask for a separate assistance from this mayor that they perceive is dipping into the public trough. Conversely, the mother barangay only who will ask the congressman who is perceived as honest.
So ito no offense meant [to the media]. I was in Manila Memorial the other day. There was a crowd. There was this lady…who talked to Kris and said, “Kris, tell P-Noy not to bother listening to the media.” No offense meant. “He should just listen to us small folk.” Then I got to bump into her. In Tagalog, she said, “Sir, wag niyong pakinggan ang mga matalinong akala nila. Kami na lang ang paking-gan mo.”
What I’m trying to highlight is there are people who have been paid, who had really embarked on everytime you have to describe half full or half empty? The half empty almost becomes almost empty. But in spite of that, and perhaps disproving Goebbels’s line of a lie repeated often enough, you have so many of these people who see through it. And they are not the most widely lettered, the most widely read, but they see through it.
So when my Dad said that the Filipino is worth dying for, give him the opportunity and he will shine every time. That’s one of our core beliefs. And you can see it, especially when you’re traveling abroad. We went to Brunei, [we] met the engineers there. We went to Japan, America, pati China. In China, we have professors in English in Beijing. You look at the plants of Liwayway. Plants–plural. Multinational Filipinos in Vietnam, in China.
What are the difficulties of being President?
About the difficulties of the presidency, is it not under our labor laws, everybody is entitled to one day a week? A lot of PSG personnel, for instance, they have forced leave. Di ba ako entitled? [Laughs.] When you compare yourself to American presidents who go to Camp David.
But that they would be still working even if they go to Camp David?
But they take a week or two.
Can’t you do the same?
[Laughs].
Your predecessor used to go to Baguio for the new year, the whole Christmas break.
Last year I had [December] 29, 30, 31. I had three days, and January 1, I was already working.
That’s the downside of being single. If you had a wife and kids, they would ask you to take time off.
I actually had that researched. And the other thing is Butch Abad told me just a few months ago, Sir, I don’t know if you realize but by the time you retire in 2016, you will not be entitled to a full pension. Why am I not going to be entitled? There’s a minimum requirement of 20 years of public service. And I think I’ll wind up with 18 and a half by that time. And the upside is Butch Abad is also not entitled. In his case, it’s 19 and a half. He was joking, perhaps I should run for a barangay position.
Or you could run for congressman.
I don’t think so.
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