A Question Of Leadership - Gloria Macapagal-Arroyo of the Philippines - Brief Article - Interview

Business Asia, June, 2000

Philippines Vice-President Gloria Macapagal-Arroyo answers questions -- finally -- about problems in her country and how she hopes to fix them

NO LEADERSHIP, no direction, but lots of corruption. For months, these comments had been emerging from the Philippines -- a nation that has for too long punched below its weight. The word was that President Joseph Estrada had charisma, but few leadership skills, and that progress made under former President Fidel Ramos was starting to unravel. So Business Asia decided to send reporter Randolph Ramsay back to his country of birth to see for himself -- and to let leaders in the Philippines answer their critics. He lined up an interview with Vice-President Gloria Macapagal-Arroyo, viewed in some quarters as a future national leader. What followed was a shambles. Scheduled interview times were constantly changed and a patient reporter extended his stay for three days while Ms Arroyo's minders made their excuses. Eventually, our reporter could wait no longer and caught his plane out of Manila, with an empty notebook and the suspicion that the critics of Manila's leadership team might be right. How can it run a country if it cannot organise a simple interview? To his credit, Ramsay stuck to his guns and submitted questions and requested a written response from the VP. What follows are edited excerpts of those answers. We apologise for not bringing you a one-on-one interview, but we did try.

- Editor

BA: What, in your opinion, are the major issues facing the Philippines?

Macapagal-Arroyo: For the medium- and long-term, we must strengthen the economy and reinforce our political stability. This would entail peacefully resolving the people's faith in democratic processes and proceeding with the other reforms to achieve sustainable growth.

BA: What issues will you personally focus on in the next few years?

Macapagal-Arroyo: As Vice-President, I am most concerned about people's perceptions that the leadership is adrift. I have, therefore, embarked on consultations with the basic and strategic sectors throughout the country to find out from them what their problems are and how they think these can be resolved.

BA: What do you say to foreign businesses looking at investing in the Philippines? How would you attract them?

Macapagal-Arroyo: Our main attractions are still our human resources -- well educated, flexible, industrious, highly creative and proficient in English. A large percentage of the workforce are not only computer literate, they are well trained for particular IT-related industries. There is great demand for Filipinos in IT and some European IT firms have announced their intentions to relocate here. Our communications infrastructure is also improving.

We also offer a handsome package of incentives for businesses opened here, to include income tax holidays, allowances for net operating loss carry over, double deductions for training and R&D, and tax exemptions on imported capital equipment and spare parts, as well as tax credits on raw materials and supplies. We guarantee foreign investors full repatriation of investments, remittance of earnings, securing of foreign loans and contracts, and freedom from expropriation and non-sequestration of investments. We remain committed to the free market.

Our macro-economic fundamentals are strong, hence our economy is still stable. Most multinationals can attest that their subsidiaries here continue to contribute their fair share to their mother companies. The Philippines remains the smart choice for investors. Lastly, I would like to emphasise that our peace and order problems are confined to a small portion of Mindanao [the site of a recent hostage crisis in the Philippines]. I hope the foreign press makes this distinction very, very clear. The situation is normal in the rest of the Philippines.

BA: What are the government's main priorities for the Philippines?

Macapagal-Arroyo: The government's main thrust is still the alleviation of poverty. Many of our people remain poor, although government was able to decrease the percentage of people living below the poverty line from 40 per cent in the early '90s to about 32 per cent now.

Government's aim is sustainable and equitable growth, which means all sectors should grow together. Thus, the programs being emphasised are those that could provide disadvantaged sectors more chances of catching up.

We also continue to subscribe to investment-led growth. With new technologies like e-commerce, we are giving top priority to developing our IT industries. In the long run, we hope to find our own niches in IT. In this part of Asia right now, we are doing pretty well in hardware manufacturing, assembly and data collection and processing services.

BA: What is your vision for the Philippines?

Macapagal-Arroyo: I would like the Filipino people to achieve their dreams of peace and prosperity in a democracy. To attain this, I have proposed a national agenda with four components: 1) an economic philosophy of free enterprise led by the private sector; 2) a social and sectoral bias in our plans, programs and projects so that the poorer sectors can participate in the development process; 3) a modernised agriculture sector founded on social equity; and 4) a society that upholds high moral standards in governance as well as in the conduct of private affairs. Our human resources are highly competitive in Asia and the world, particularly in IT. For the near future, we hope to achieve the highest internet penetration rate in South East Asia and become the knowledge centre in our part of the world.