BØRGE BRENDE: I’m not sure if the music, Mr. President is Davos style, but we have so great memories from your visits in Davos last year. I really enjoyed our dialogue there and thank you so much for your speech today. As you can see, there is huge international interest in the Philippines. And, we also know that Secretary Raymundo was visiting you last week with a big business delegation from the US. We are here today with the distinguished delegations and also thank you to all our friends in the Philippines for making this happening. And this afternoon, I think we are receiving Secretary Blinken. So, I think all these interests also shows that there is a lot of trust in your leadership, but also in the economic performance of the Philippines. We are expecting also very strong growth this year in the Philippines. But even more important, we do think that there is a just question of time before the Philippines is a 2 trillion US dollars economy. And rose to the 18th largest economy in the world, and then to the 12th. What do you think, Mr. President, are the most important measures to take in the coming year to make sure that you reach the goal of 2 trillion, and that you become even a stronger economy globally?
PRESIDENT MARCOS: Well, in our view, and it has been, we have been consistent in – We feel that we really at the very, very start of this is should we have to go back to basics. But not basics as they were before the pandemic. The new basics for the post pandemic world economy. And we are continuing to do that. With that–when I speak of that, I mean, in terms of the food supply and nutrition for our people, the shift from renewable, rather from fossil fuels to renewable fuels, considering that this is done in the context of hoping to increase our power supply, and to de-crease the cost of that power supply. And of course, after that, after just that–making more efficient the bureaucracy, digitalizing, as much of the economy as we possibly can. And for that, I speak mostly on the public sector, the private sector has really by necessity has not to keep up with the rest of the world in terms of digitalization. Unfortunately, it’s the bureaucracy, the government functions that have taken aback seat. And, so we are trying to work on that. And we are making good progress as we have. I think it is–it comes from that very early recognition that the digital space is the space of growth. So, we are moving in – continues to move in that direction. So, having attended to, or continue as we have attended to the basic areas of the economy. Then we now move on to the initiatives that we would like to introduce. And those are, what I spoke of in my speech are the investments that come from private partners, also, but government-to-government investments are also something that we are hoping to increase.
And these investments also must be directed properly. They cannot be just investments that are just don’t–are perhaps very profitable, but do not really help the economy grow. So, growth is still the main aim, with the, I think we’ve grown–the idea is that we grow the economy out of the doldrums of the post-pandemic situation. And so, that is absolutely needed because the truth of the matter is, the Philippines does not corner any market in any world market, and, therefore, investments are going to be key.
But these are what we speak are a commitment in the capital investment of the new sectors. Not in these smokestack industries so much but really again, in the digital space and in the new technologies and in the new industries that have a reason from that. I speak of green minerals, battery productions, the new technologies that we need to be adopting, so part of that. And so, we, to play a large part in that, we are also focusing a great deal on the re-skilling and upskilling of our people.
So whenever we speak of investments, I always ask the perspective investor if we have, in fact, a training program, if there is a transfer of technology, because this is going to be essential and, so far I think that it serves the interest of both the private side and the public side that this continuous training and upskilling of our workers is conducted not only so that they are able to work in the areas that are important in the new economy, but also because we have a very significant part of our economy is dependent on our overseas workers.
And for them, to be able to compete properly in the international labor markets, those specialized skills that we are seeing are necessary. They must have that skill set so as they will be able to compete, and to find the good positions wherever it is that they see opportunities.
It has been very successful; it has been so successful. In fact, that we are always worried about the talents that stays at home and that’s why it even brings more importance and more impetus to our continuing training and development, adoption of the new technologies that are available in the world.
And this is just something that technologies will be so quickly. We hold very much hope for the new technologies to solve some of these problems, but the technology moves so quickly, so we have to move quickly with it. And that is– these are the areas that we have decided to focus on, to continue the growth trend of the Philippines and to make the economy stronger.
BRENDE: Thank you so much, Mr. President, for sharing this vision and this also just underline that we are faced with a paradigm shifts with the new digital intelligent economy that we’re faced to it. And, we do strongly believe that as you underline the right-skilling and upskilling is critical, and the generative AI and the new technologies will be a major game changer. It can increase productivity with 30% in the coming decade. But there are some concerns that these new technologies will just underpin that the winner takes it all. That’s only the economies of size and the big companies that can succeed at least on the harder side. But there is also a big softer side of this. So, would you think that the Philippines is ready for being part of this growth story? You already touched on it, but are you seeing this as a challenge, and a threat or more as an opportunity with the Philippines that is such a populous country with 110 million people and very skilled in English?
PRESIDENT MARCOS: Well, any–it’s difficult to categorize it simply as a challenge or threat because any sharp blade cuts both ways. And, I think I’m seeing this now with AI where we’re still trying to figure out. We know how powerful it is, and we know how powerful it is going to be even more so than it is now. We can see the necessity for AI because there are many things that we’re doing is becoming more complicated. And, we have to act very swiftly to be able to adjust to whatever occurrences there are. But again, I think, I need not explain how the AI can also work against you. But we must, but it is very clear understanding on our part that we must be part of that. Now, the asset that– I’ve mentioned this when we were in Davos, the main asset when it comes, especially to the new technologies, is our workforce. We have a young workforce, they are well-trained, they are accustomed to working with foreign entities. They– and we–English speaking is not a small aspect to that, and so it is a workforce that I think considering especially that many of the countries surrounding us are of the grain workforce. We have begun to see the diminishing of the birth rates in some ASEAN countries. But as I always say, the Philippines is a good catholic county. So, we make sure our birth rates remain healthy. [Laughs]
BRENDE: That’s something that other countries see as the large challenge with the fertility rate going so dramatically down. I got your message; we should all listen more to the Pope in that respect. So, Mr. President, you are also kindly open up for questions from some of the CEOs. But before doing so, I think we need to also address any elephants in the room, and of course, we already touched on the G2 competition between the US and China almost half of the global economy. And, we are seeing now growth in the global economy, but we are all worried that the geopolitical recession that we’re faced with, the geopolitical tension can influence negatively on growth. Your perspective on that, and of course you also have a large neighbor in the north that you are handling. Any insight on your strategy to make sure that you can see a win-win situation there and not a lose-lose situation moving forward, but based on, of course, the interest of your country.
PRESIDENT MARCOS: Well, certainly, doing all of these things that we are talking about in the context of a very volatile geopolitical situation here in the region, in central Europe, in central and eastern Europe, with Ukraine, and the Middle East. But you know when I say Middle East, that’s where it began, but it has now spread to other parts of the world.
That certainly presents an enormous challenge and the realignment within the great powers for a small country like the Philippines is something that we have to be able to manage at least for ourselves. We have little influence on what the great powers will do. We do however – we are able however, to deal with every power. One of the first things, one of the first expressions of foreign policy that I made was that we are a friend to all and an enemy to none. And the only way that I see we are able to do that is to separate politics and the economy.
And we’ll see what’s good for the economy. And so long as it does not impact poorly upon the political life here in the Philippines, then I think it is an acceptable activity to enter into. It’s not as you can imagine because economic power is also used as political power in many of these instances. So, it is not that simple, but we must continue to make that delineation and hopefully, we make the right choices so that our political stability, our political sovereignty, and sovereign rights are defended, robustly. At the same time, that we are able to deal with any country in the world. No matter what their political leanings might be; no matter what their alliances might be. But again, it is a difficult situation, it’s a difficult problem. I will not – I do not underestimate how complicated it can get. But, as long as we have a guiding principle, and that is to separate the two things as much as possible, it’s not necessarily, it’s not a binary solution, but it is something that we need to do if we are going to continue to grow the economy and yet maintain our political stability in the Philippines.
BRENDE: Thank you very much and thank you also in Davos, you were very candid on this topic, remember? And it created a lot of news on this. So, it’s very interesting. So, now, the first I will turn to is Rajeev Kannan, Sumitomo Mitsui Banking Corporation, SMBC, if you are familiar with them. You are over there, Rajeev. You have a mic. Yes.
Kannan: Thank you, Your Excellency, Mr. President for painting the growth story and aspirations for Philippines. As what mentioned, I represent Sumitomo Mitsui Bank from Japan and we’ve been in the country since 1975. And, last year, we completed the largest FDI from Japan into Philippines under your administration. I do hope that this is kind of a leading indicator to more investments coming from Japan rather than as leading this FDI leave tables from Japan. I think in terms of the renewable sector, and sustainable infrastructure sector, that’s the key focus for our bank. We have a global player in the space. And I think I commend your administration on the very positive steps taken including the–you introduce now, the green lane as you mentioned, the simplifications of the DOE process, as well as the bidding processes which has been executed, and finally also allowing increased foreign ownerships, in terms of the renewable sector. I believe that if you look at the wider region in Asia which I lead for the bank, I do see Philippines is a very important market for us. I think, particularly in terms of the renewable sector, I think the Philippines has a number of strengths. Historically, it has geothermal capabilities that has a high-pump hydro, and hydro capability, and now more recently the focus on solar and wind. I think, it is quite encouraging for us. So, we would also like to encourage you and the administration, to continue to grow this self-process and keep a very stable pipeline of opportunities because for banks, and institutions, and investors, it is quite important we have steady stream of opportunities which allows us commit resources and commit investments into your country. And I think we are quite happy to basically increase our capital allocation which we already done when we announced our investment into RCBC bank and Philippines. Thank you.
PRESIDENT MARCOS: Thank you, thank you very much. This is precisely the type of economic activity that will be very beneficial to the Philippines. You touched upon it tangentially, climate change. That’s perhaps I was remise in not mentioning that because no discussions that we have in government now, do not include measures to mitigate, to adapt to climate change. We, in the Philippines, have once again achieved the dubious distinction of being the most vulnerable country to the effects of climate change. So, that adds another dimension to everything that we do because if you will remember in the remarks that I have just made. Everything–all of the developments that we talked about is a premise on it being sustainable. And that is something that we really are very serious about because we feel the effects. I was on my way here. We were all remarking on the fact that it is raining a little bit. And this is strange because we are in the middle of a drought. Beyond that, for example here, in the northern part of the country right now, we are suffering a drought and the agricultural costs to that drought have already reached billions of pesos.
We have been able to prepare for it to a certain extent, but nonetheless, that is a problem. So, that is the situation in the northern part of the country and the southern part of the country were suffering floods. And these strange weather patterns are things that we are not used to. We are used to typhoons; we are used to the typhoon seasons coming in at certain time of year. Passing the route of the typhoon is generally well- known and at a local level we have been able– we know how to prepare. But since, I would say, since Yolanda or Haiyan, everything has changed, and, so we need to be fairly quick on our feet when we try to analyze what is going to happen. What the scientist has been telling us for many, many years now is happening. It is not imminent. It is here. And that is one of the greatest challenges that the Philippines faces. And we are spending many great – many resources and a good deal of energy to try and make sure. Because can you imagine, agriculture is the area that’s most affected that is a critical, critical area. So, when you look at our financial numbers, you have to isolate the shocks that are hitting the economy and remove agriculture to be able to understand clearly what is happening to the economy because what is happening to agriculture are shocks that are completely out of control. They are nonetheless, realm and have to be attended to and have to be dealt with. So, the shift from fossil fuels to renewable is something that is–that takes up a great deal of our thinking and that is why many of the investments that we are hoping to attract are in that area, in renewables.
BRENDE: Well, thank you so much for underlining that and you know, a few years ago, we used to say that we’re dealing with the climate change due to the next generation and our grandchildren but what we’re saying Mr. President, I think is you’re right is happening now and here, the climate change. And we’re seeing that the price of inaction far exceeds the price of action. But we’re also touching of the digital economy. I think it would be good to have someone on this. I think Jackie Wang, Google. Where are you, Jackie? I think you have a comment or question also to the President. He already spoke a lot about the digital as an opportunity and now more, digital divide.
Wang: Hello. Can you hear me, okay? Hello, Mr. President. Thank you so much for that speech. My name is Jackie. I’m country manager for Google Philippines here. So, you mentioned that–you speak a lot of digitization. From a Google perspective, when we look at our digital economy report– our reports reflect a lot of what you mentioned about the growth potential and the amazing growth that we’ve seen in the Philippines. In Philippines since 2023, the digital economy is as big as 23 billion dollars in growth merchandising value and has a compound giga growth of 16 percent. You also mentioned the importance of digitization around up-skilling and reskilling. My question for you is, what do you see is the biggest challenge when it comes to digitization and how companies like Google from a private sector and many of us in this room, how can we help in this digitization journey to help make a digital Philippines?
PRESIDENT MARCOS: Well, we are still at the level where we are worried about connectivity and we are working very hard because being an island nation that becomes a real factor, that becomes a real challenge. And–to start with government when I first came, when we first came into office. We conducted a survey and on how–what are the consumers’ habits when it comes to the use of the internet and we got back statistics which was really rather worrisome and that was that 95 percent of an ordinary Filipino Citizens’ activities in terms of payment, for example, clearances and all that, 95 percent of the activity is over the internet.
The last five percent was government and that’s why we still are falling behind. We are catching up though because there have been several groups that have come in–that have extended where fiber optic network and have been setting up data centers and we are hoping to now, we are slowly starting to design a cloud for, specifically for the Philippines so that there’s some security. Having said security, the cyber problem is–cyber security problem is become quite pronounced and this is maybe the darker side of the technology.
We have many instances where there are scams, there is hacking. We–in terms of actual security, we also have been–have fallen victims to great many of these nefarious activities. And so yes, those were the areas that we worry about. If you want to know more, seated at your table is the Secretary of Information Technology and Communication. I’m sure he’ll give an earful as to the detailed situation here in the Philippines.
BRENDE: Thank you and we will have more from the Secretary and a little bit later so we’ll tap into him. You know, there is a lot on interest now also in investing in the Philippines and when I look at the numbers on FTIs compared to some of the countries, the FTI being invested into the Philippines are still a bit lower than in some neighboring countries. And, I was thinking for some you are with KKR – KKR being one of the largest than private equity companies in the world. What will it take and maybe you have a separate question to the President too, but in you 15 seconds can what will it take to get even more FTIs into the Philippines–it would be good and maybe a question to the President.
Q: Good morning, Mr. President, a privilege to be here with you, we are investing in the Philippines for the last several years; invested with many partners, which is enabling sari-sari stores with Manny Pangilinan, and Metro Pacific Hospitals. In MAYA to your point of digitalization, creating a digital bank, in payment access for many on the banks consumers as well the infrastructures Pinnacle Towers, Frontiers which is creating telecom towers around the country and in generations. So, we have to thank for all of your leadership and the administrations leadership enabling investors like us to come in and invest here. One of the points that I want to highlight, is it would be great for the country to really showcase success stories of investments in the country around the world. I think a lot of people would benefit from hearing more about the changes that you and your administration have made, which are really enabling investment across digitalization and infrastructure specifically in climate as going forward. And that’s one thing, which many investors around the world are less familiar about the things that have changed. So, my request would be to just really showcase some of the changes and opportunities that the country is creating.
And the second one which we’ve been discussing with some of your colleagues and the administration has been around creating the basic foundational areas for digitalization, which enable national ID, credit bureaus around foundations, which then the businesses can come in and invest and start creating new opportunities for the consumers. So, we are very excited about investing here. Again, my question to you – and I’m drawing more FTI into the country.
PRESIDENT MARCOS: Thank you. Thank you for that. But I’m quite pleased that the areas that you mentioned are the areas that we’re working very hard on. But these are structural changes that we have to make and by their very nature, structural changes–although we can make them as quickly as possible, the effects as they go through the processes of the economy do take time and so we have I think properly identified the areas that need work and some of those have already been–in terms of legislatures for example–a legislation for example, some of those obsolete, shall we say, legislation has now been amended to be more open. That really–that really has–there are two elements to what we have tried to do.
Number one, is the recognition of the private sector as a full partner in the development of the economy and second is to open the economy and to bring more–well the foreign investments in, but that not foreign investments just because they are foreign investments, foreign investments in the areas that we feel need more work. And that is why I am pleased that the areas that you mentioned are things that we have been looking at and have started to make the necessary changes, necessary structural changes. People–in Davos, we were talking about recovering. I’m now–I speak of transformation. I no longer speak about recovery. We have to transform the economy and we have to transform the way we do business. We have to transform the way we think, in many ways and that’s what we are hoping to try and do.
Again, my confidence comes really from the fact–the workforce that I have such great faith in because they have in–the record of the Filipino workforce here and abroad, especially abroad has been rather good and that’s why I know that Filipinos can in fact do the job and it’s just a question of us together with private sector partners’ training them, and getting their skills sets, making those skill sets available to them. Putting up programs to make them–to certify them in whatever specific skills are necessary.
So, again, that– it is– I supposed maybe it is a bit of a selective process in terms of FTI coming into the country but, you know, any additional activity of course is welcome, but of course we focus as well on specific areas. We talk about agriculture, we talk about the mineral processing, we talk about battery production, we talk about renewables–the renewable shift, we talk about digitalization. These are the areas we feel need focus. And I have to say, that the potential investors, or the present investors who would like to expand their operations and potential investors who have yet to come to the Philippines have actually responded in those particular areas and so I think that we are headed down the right path.
There’s still–it’s still nip and tuck, a little bit, as we go along, but I think overall, I’m confident that we have made the right choices.
BRENDE: Well, thank you. Thank you very much, Mr. President. With your permission, maybe we can take one more, and then from a successful Filipino because we are no heard from the National Community, but when you know from your delegation, you brought with you in Davos a year ago, there’s so much also strong businesses that are here in the Philippines. Maybe it’s hard to then make a choice, but I see Ramon Ang from San Miguel sitting over there. He is very eloquent as you know. So, I’m thinking Ramon, Filipino– the Philippine economy is growing fast and I guess you are optimistic about the future. Any questions for the President?
Ang: First of all, I’d like to thank the President and Børge for this opportunity. I’d like to share with our guest today about the questions when I was in Davos two years ago. You know, in that conference, people are saying Philippines is not competitive because our power rates are so expensive and our fuel prices are so expensive in this country. But the truth is Philippines, if you compare it apple-to-apple, actual cost of power and fuel is the lowest in Asia except Philippine government impose excise tax and VAT and of course, plus all other countries around the region are subsidizing their fuel and power, but of course, that cannot last forever like our neighboring country, Malaysia is subsidizing 20 billion dollars a year and Philippines being a modern country. Tama ba ‘yon sir? Modern? And market force. Philippines practice market force. In this country, we don’t subsidize and we impose taxes. And also, I’d like to share with our guest here today. Do you that Philippines is one of the earliest to develop geothermal power? Our first geothermal power was built in 1977. And today our geothermal is 2000 megawatt. And Philippines is also one of the first in Asia to build Nuclear Power Plant in 1976. And also, we operated our– or discovered our Malampaya natural gas early on in 1980s.
So, Philippines–by the way also solar–I was talking to my colleague. Solar was first built in the Philippines in 1980. We’re ahead of everybody in Asia. So, Philippines is very, very advanced during the 60s, 70s, and 80s.
And the unfortunate event of Military Takeover stopped everything and now we are trying to catch up, thanks to our beloved President, thank you po.
PRESIDENT MARCOS: Thank you, Ramon. [applause] Well, he has the SMC. San Miguel has really been a very large part. Sabin Aboitiz is smiling. Maybe he has different figures from Ramon in terms of the power generation. We’ll get into that. [laughter] We’ll talk about it –
BRENDE: We can give him the – you know to keep the balance. [laughter]
PRESIDENT MARCOS: But yes, the SMC has become– we just signed with them. We formed a consortium to improve our airport which has been adjudged as being one of the worst airports for many years. So, we are about to change that. That’s part of the physical connectivity we talked about, but also because of Tourism. Tourism is the– the contribution of Tourism to the economy is a significant number. So, we are hoping to continue that so that is why–that is precisely one of the best examples that we have of a partnership between government and the private sector and this is one of the–I believe despite being the largest PPP that we have ever entered into. It is–it was– we were able to process the entire– we were able to go to the entire process in record time. And that’s what we tried to keep hoping for to make sure that the road blocks that are unnecessary- that are really have been part of the evolution.
One of the things that really happen here was at many things were instituted during the pandemic that no longer apply and we have to remove those again and redesign as it were the economy and so one of those areas is PPP and that’s far, I believe, we have been successful in attracting that kind of arrangement. However, we do not limit ourselves to that. We are– we look to G2G arrangements, we look to purely commercial joint venture arrangements between private corporations and so that is– that is our way of opening as I said the economy.
BRENDE: Thank you, thank you very much. We would have loved this to continue for another hour but you know, Mr. President that’s–very soon you will have a big interview with Bloomberg then we know you are seeing Secretary Blinken. We feel very privileged that you wanted to spend time with us. Also, has been discussed in a short bilateral meeting is always good to have Q and A before you go on Bloomberg you know. So, I hope this was a good warm up for you too for Bloomberg.
PRESIDENT MARCOS: Yes, thank you. Yes, I’m very happy to always come and explain what it is that we are trying to achieve here in the Philippines and I think that it is an important part of bringing the Philippines really to the world and one of the comments that I made very early on again in the administration is that we have to reintroduce the Philippines to the world because we have become insular. The pandemic played a huge part in that phenomenon so that is what– and I think that we have met with some success so thank you for this opportunity such as this and I’m glad to be able to explain and to give an idea to all our partners and prospective partners– to give an idea on the investment terrain in the Philippines. So, thank you for the opportunity.
BRENDE: Thank you. Thank you so much, Mr. President and thank you for not only explaining it but explaining it in such a convincing way and in such a warm way as we saw in Davos. Your session was one of the most popular ones. So many downloaded also, especially after and we do hope to see you back in Davos in 2025.
PRESIDENT MARCOS: Alright, we’ll see it’s for scheduling. I would love to go back to Davos and…
BRENDE: I take that for a yes.
PRESIDENT MARCOS: See how far we’ve come since the first meeting.
BRENDE: No. Thank you, very much. Let’s do a big applause. Thank you so much, Mr. President. [applause]
—END—
