A Conversation with Benigno S. Aquino III
DAVID BRADLEY: Good afternoon. Good afternoon. Good afternoon, everyone.
On behalf of the Council on Foreign Relations, I want to welcome President Benigno Aquino III. He's the 15th president of the Republic of the Philippines. He enters today his 86th day in office. This is his first overseas trip, officially.
And we're privileged to have you here, Mr. President.
My name is David Bradley. I'm the owner of the Atlantic, in Washington, D.C.
Let me do the dispatching of the administrative details to start with. First, the order of service: I'm going to introduce the president, and the council has asked him if he would speak for about 15 minutes. Following that, we'll move directly to questions and answers. The president and I will sit up here. I'll lead off with five minutes or so of questions, and then we'll open up to everyone.
Next administrative function: Those of you who are journalists, today's conversation is on the record.
May I ask you all to turn off your cell phones and your BlackBerrys? And apparently, we need to ask you to actually turn them off, not move it to vibrate, as it interferes with the sound system if it's on vibrate.
And then, a final administrative note -- this is a note of full disclosure: I'm worried you may find my questions of the president too benign or too mild for a journalist. I was a Fulbright scholar in the Philippines in my 20s, and it is easily one of my unsurpassed years. I have nothing but abashed great -- unabashed great feelings for the country. So I don't have a "Mike Wallace question" in me. (Laughter.) That's going to have to fall to all of you.
So, I don't know that it is the greatest political narrative story in the world, but it is surely one of the greatest political narrative stories of the last hundred years: the rise of the Aquino family in Tarlac, Luzon, the Philippines. President Aquino's great-grandfather was a revolutionary general who fought in turn the Spanish and then the Americans. He was twice sentenced to death. President Aquino's grandfather, a more controversial figure, was imprisoned by the Americans.
But it was the imprisonment of his father Ninoy Aquino that thrust the family name onto the world stage. Noynoy Aquino, as he is known -- as the president is known, was 12 years old when his father was taken by the Marcos government and charged with subversion and murder. He was 17 years old when the trial finally finished and his father was sentenced to death. He was 20 years old when, in a surprise visit, Imelda Marcos showed up at the prison, had Ninoy Aquino released and placed into exile in the United States. And now-President Aquino was 23 years old when his father famously boarded Chinese Air flight 811 to return to the Philippines in protest, and he was assassinated on the tarmac on deplaning.
Everyone knows the whole -- story after that: the return of Cory Aquino to the Philippines, the election of 1986, which was stolen from her, the People Power Revolution that spilled out onto the streets of the highway, EDSA, that you'll all remember the television images of, and then the flight of the Marcos family, fleeing into the night aboard an American helicopter that had been sent from Clark Air Force Base.
What you may not know is the letter that became famous in the Philippines during the last presidential campaign, the one that President Aquino just won. This was written in 1973 by an imprisoned Ninoy Aquino to his son Noynoy, who was 13 years old at the time. I'm just going to read you a portion of the letter.
"My dear son, this afternoon I have arrived at my moment of truth. I've decided not to participate in the proceedings of the military commission assigned to take charges filed against me.
"You are still too young to grasp the full impact of my decision. Briefly, by not participating in the proceedings, I will not be represented by counsel. I will not put up any defense. I expect to be sentenced to imprisonment for the rest of my natural life, or possibly to be sent to stand before a firing squad.
"Forgive me for passing on to your young shoulders the great responsibilities of our family. I trust you will love your mother and your sisters, and lavish them with the care and protection I would have given them.
"I had hopes of introducing you to my friends, showing you the world and guiding you through the maze of survival. I'm afraid you will not -- you will now have to go it alone, without your guide.
"There's no greater nation on Earth than our motherland, no greater people than our own. Serve them with all your heart. Son, the ball is now in your hands.
"Lovingly, Dad."
This letter became a major piece of the campaign that just took place, especially that closing line, "Son, the ball is now in your hands." So running on a platform of attacking government corruption, President Aquino in a field of 10 candidates won 40 percent of the vote. It was 5 million votes more than the next candidate.
By the time of his inauguration, which was the end of June, he had an 85 percent favorable rating in Philippine polls. That's the highest favorable rating in Philippine polling history.
And Time magazine described him -- here I'm quoting -- as of "Gandhian simplicity and uprightness."
For those of us who have trouble summoning an 85 percent approval rate in our nuclear families -- (laughter) -- this is as good as life ever becomes. I don't know how you can do better than your start in office, but it is a remarkable start. So join me in welcoming the president of the Philippines. (Applause.)
PRESIDENT BENIGNO S. AQUINO III: Thank you. Thank you, Mr. Bradley, for those very inspiring words. It reminds me that my father's looking at us right now. And if I fail to live up to his expectations, I might wind up on the floor in a little while. (Soft laughter.)
(Dr. Haass ?), distinguished members of the Council on Foreign Relations, members of my delegation, ladies and gentlemen, good afternoon. Thank you for the warm welcome and kind introduction. I appreciate this great opportunity to engage you in a conversation about the Philippines. I am here to share with you the aspirations of close to 100 million Filipinos that I represent.
Today, I took my oath -- my oath of office as president. I vowed to our people that I will dedicate my life to making our democracy reach its fullest potential, that of ensuring equal opportunity for all.
In an essay he wrote in 1968 for Foreign Affairs, my father lamented, and I quote, "that the blessings of liberty have not included liberation from poverty, and that there are great disparities and chronic inequities of Philippine society." His words still remain true today.
I was put into office by the people who believed in my idea that corruption is the root of poverty; that an end to corruption would mean an end to poverty. My government is ready to deliver on the second part of this pledge. We will channel any gains into the people through social services like education, health and conditional cash transfers that serve both as life vests for the poorest of the poor and incentives to ensure that they can move forward in life by getting educated and staying healthy.
My government's mantra is to guarantee a more equitable distribution of our nation's resources. This can only be achieved through stronger economic growth, investments -- (very ?) needed in social services. But they are also necessary in infrastructure, utilities and job-generating enterprises.
Given the scarce resources that we have, attracting foreign capital has become a vital component of my anti-poverty program. And I am here today to tell you that my government is doing what it takes to create a more investor-friendly environment. Part of my mandate is to curb corruption and streamline a cumbersome, graft-ridden bureaucracy, to put resources where they will provide the clearest results, and to untangle a complicated regulatory environment.
The mission I have set out for myself is to lead by example, rally our people and unite them behind a common sense of purpose. It is imperative for us to work hand in glove and persevere in creating a just society for all. I have laid out the tenets that will mark the new Philippines: good governance, employment generation, quality education, improved public health, and a home for every family within safe communities.
Even as we exert our best to create jobs at home, the immediate reality is that many of my compatriots continue to seek greener pastures abroad. This makes them vulnerable to human traffickers and illegal recruiters. We are thus doubling our efforts to bring the full force of the law against those who prey on the vulnerable.
We have committed to restore integrity in leadership and governance. We will battle corruption, cut red tape and exact the highest standards of performance from our bureaucracy. The government must earn the full trust and confidence of its citizens. This trust and confidence is the motive force that would get them actively involved in building and rebuilding our nation. By empowering the people and nurturing democratic participation, we can truly bring about real reforms.
Ladies and gentlemen, I came here to declare that the Philippines is open for business under new management. Today I invite you to take part in the transformation of the Philippines. We are striving in earnest to build a government where everything works and pursue programs for our economic take-off.
The forging of private-public partnerships, or PPPs, would be our main engine in revving up our economy. We will enlist the participation of the private sector, both domestic and foreign, in big-ticket, capital-intensive infrastructure projects, while ensuring reasonable returns. We shall officially launch the PPPs this October. An initial list of 10 PPP projects worth $4.5 billion is already being developed. We look forward to the participation of the U.S. investors, specifically as we open up our infrastructure sector for foreign participation.
There is no better time than now to bank on the Philippines and lay the groundwork for future long-term business and economic success. The global economic recovery, growth in international trade and overall as improved levels of confidence, have already borne fruit. In the first half of 2010, the Philippine economy showed robust growth of 7.8 percent and 7.9 percent. Full-year GDP growth will likely reach the upper end of the 5 to 6 percent -- percentile target. Perhaps, we hope, we can even reach higher.
There was a return of the bulls to our local stock market. Trading has reached fever pitch, and foreign funds are streaming our way. There was a net inflow of $128 million in foreign direct investments in June of 2010, as compared to the previous month's net outflow. Since the end of June, when I was inaugurated president, 754.55 billion pesos in wealth was created, when measured by the increase in domestic market capitalization.
For the first time, the Philippines was also able to raise $1 billion through the sale of a peso-denominated global bond. This bond issuance generated high investor interest from across the globe, from Asia, Europe and the United States.
Financial analysts point to good governance and market-driven economic growth as the impetus for this investor confidence. Our doors are wide open for investors, particularly in tourism, business process outsourcing, mining, electronics, housing and agricultural sectors.
Tourism is a crucial industry that could employ millions of Filipinos, skilled and unskilled alike, cross those 7,107 islands of the Philippines. (Coughs.) Excuse me.
From the current projection of 3.3 million tourist arrivals in 2010, our aim is to eventually attract 6 million tourists. In the process, we expect to create 3 million jobs in the next six years.
BPO continues to be a sunrise industry in the Philippines. From virtually nothing 10 years ago, this sector has grown into a $7.2 billion industry, employing 450,000 people. Today the Philippines has the second-biggest BPO industry in the world, next only to India, and growth forecast remains very encouraging on the long term.
The Philippines has vast minerals that are still untapped. It has one of the world's largest deposits of gold, nickel, copper and chromite. Through responsible mining, we intend to generate more revenues from the extraction of these resources.
If we succeed in getting the support of foreign and local investors for our PPP programs, we will have money to spend for the delivery of much-needed social services across the country. As we strengthen our economic infrastructure, we will also create the peaceful and stable environment necessary for economic growth.
I offered -- (clears throat) -- excuse me -- I have offered a place at the table for everyone who wants to talk about peace, to unite our country and bring the disillusioned and the disenfranchised who have chosen the violent path back into our -- excuse me -- back into our democratic mainstream. My administration's compact with the Filipino people will demand no less than the attainment of lasting peace and equitable prosperity. We will employ all the tools at our disposal to achieve this.
The Philippine relations with the United States are vital. The special ties that exist between us, our security allies and development partners serve as a steady anchor in American engagement towards the Asia-Pacific. The earlier, colonial patron-client relationship has evolved through the years into modern, mature and mutually beneficial relations.
Our economic relations are robust. The United States is among our leading trade partners. It ranks as our largest export market and second-largest supplier. About 18 percent of total Philippine exports were bound for the U.S. and approximately 12 percent of our imports were sought from America last year. The U.S. has also been traditionally the Philippines' largest foreign investor, mostly in the manufacturing sector.
We are now advocating for the passage of a bill pending in the U.S. Congress known as the Save our Industries Act, or the Save Act. If signed into law, it would give duty-free breaks for Philippine garment exports to the U.S. which were processed from U.S.-made fabrics. It will also give reduced tariffs on those that use U.S.-made yarns. This is a win-win proposition for both the U.S. and the Philippines. It will reinvigorate both the U.S. textile industry and our garments industry, and create jobs on both sides of the Pacific.
During my visit here I particularly look forward to our signing of the Millennium Challenge compact agreement. This is a vote of confidence on our commitment to reduce poverty, generate revenues through our tough campaign against graft and corruption, and to modernize our infrastructure.
As you may know, the Millennium Challenge Corporation, or MCC, awards grants only to countries which rule justly, promote economic freedom, and invest in their people.
With keen interest we note the Obama administration's focus in negotiating a regional Asia-Pacific trade agreement known as the Trans-Pacific Partnership Agreement. Envisioned as a platform for economic integration across the region, the TPP countries would be in the best place to become the region's leading hub for trade investment and growth.
The Philippines aims to engage the U.S. in a joint trade initiative that would serve as mutual building blocks for our eventual participation in the Trans-Pacific Partnership. Just like other ASEAN member states, the Philippines is already positioning itself as a viable member of the Trans-Pacific Partnership.
We seek U.S. support for this, as we recognize its leadership role as host of the APEC in 2011.
In regional affairs, the Philippines has been a dynamic player, especially in ASEAN. From a small grouping of 10 nations, ASEAN has now emerged as the nucleus of regional dialogue and cooperation.
The ASEAN charter was adopted in December 2008 that conferred leader status to the organization and laid down a clear road map towards building an ASEAN community by 2015.
A Philippine initiative was the inclusion of a provision in the charter calling for the establishment of a human rights body called the ASEAN Intergovernmental Commission on Human Rights. Still in its incipient stage, this body stands much to gain from U.S. partnership in capacity building. For its part, the Philippines stands by its offer to host its secretariat.
On human rights protection and promotion, we look forward to greater cooperation with the U.S. as the Philippines, once again, endeavors to be the citadel for human rights, democracy and good governance in our own region. Right now the Philippines is a nexus for the ASEAN-U.S. relations as country coordinator.
Fulfilling this mandate has been -- benefited by the renewed interest of the U.S. in Southeast Asia. President Obama's vow in 2009 to be a Pacific president generated excitement in our region. Prior to this, most countries in the region felt that they had become mere blips in the American radar screen as Washington, D.C., focused on the Middle East, particularly on Iraq.
Perhaps the strongest signal of reengagement with Southeast Asia was the U.S.'s accession to the Southeast Asian Treaty of Amity and Cooperation. President Obama was also the first American president to meet with ASEAN leaders in the first ASEAN-U.S. summit in Singapore of last year. These augur well for a broadening and deepening of ASEAN-U.S. interactions at an accelerated pace.
Our second ASEAN-U.S. summit tomorrow will reinforce this new era of ASEAN-U.S. relations. The U.S. is a major trading partner of ASEAN. ASEAN, in turn, has been one of the fastest-growing export markets and host of U.S. investments.
The Philippines would like to see the enhanced implementation of the ASEAN-U.S. Trade and Investment Framework Arrangement. An economically viable and strong ASEAN facilitates stability and prosperity, and the TIFA is a vital tool for economic growth, job creation and improved welfare of our peoples.
Connectivity has become another buzzword in ASEAN in past year. We expect the master plan on ASEAN connectivity to be ready by the ASEAN summit next month. Three key elements characterize our connectivity master plan: physical connectivity, referring to transport connectivity; institutional connectivity, referring to trade and investment liberalization; and people-to-people connectivity, referring to tourism, education and cultural exchange.
You will note that these three elements of connectivity point to the economic, political, security and socio-cultural goals of ASEAN community building. Given its unique geographic locations, the Philippines in particular look forward to the development of a nautical highway to ensure that we remain connected to our neighbors in the region. Forging public-private partnerships will make the connectivity in ASEAN a reality, and we look forward to the strong support of the U.S. for this initiative.
At the ASEAN ministerial meeting and ASEAN regional forum in Hanoi last July, the South China Sea issue was discussed. The Philippines welcomed State Secretary -- Secretary of State, rather -- Hillary Clinton's statement to the forum that, while the U.S. takes no sides in the dispute in the South China Sea, that claimant states should resolve their disputes through a collaborative diplomatic process and in accordance with international law.
The Philippines and the U.S. share the need to maintain unimpeded maritime commerce and navigation. The Philippines believes that it is in the best interests of the region to transform this potential flash point into a zone of peace, friendship, freedom and cooperation through sustained consultation and dialogue.
A most pressing phenomenon that confronts and threatens humankind today is climate change. The Philippines has a very negligible carbon footprint. It produces only one-third of 1 percent of the global greenhouse gases. Yet it is in the U.N.'s roster of top 12 countries most vulnerable to climate change.
Two devastating typhoons hit us last year and damage to our crops and property was equivalent to 2.7 percent of our gross domestic product. That is why in climate change negotiations we have been calling for deep and early cuts in the greenhouse gas emissions of developed countries. We urge them to support the developing countries in terms of financing, technology transfer and capacity building for climate change mitigation and adaptation efforts as a form of restitution or climate justice.
The Philippines has a renewable energy act. It is a legal framework for the harnessing of our renewable sources of energy, including foreign investments, and we invite U.S. involvement in this program. We also appreciate the USAID's promotion of clean energy technologies in the Philippines -- modest beginnings for our goals towards green growth and green economy.
The world looks up to the U.S. leadership in climate-change negotiations and in putting in place an international framework on climate change. Still, within the auspices of the United Nations, the Philippines steered the crucial negotiations of the 2010 review conference of the Nuclear Nonproliferation Treaty last May here in New York.
As president of that conference, the Philippines helped revive the moribund NPT. It helped garner consensus towards a comprehensive approach to nuclear disarmament, nuclear nonproliferation, and the peaceful uses of nuclear energy. After a month-long intensive negotiation, a 64-point action plan was adopted. This was both historic and unprecedented. More daunting challenges lie ahead.
The Philippines and ASEAN will continue to stress the importance of the Southeast Asian Nuclear Weapons-Free Zone Treaty in preserving peace and security in the region. We strongly urge the nuclear-weapon states to accede to its protocol.
We laud the U.S.'s own disarmament efforts. We are encouraged by the success of the U.S.-Russia START talks this year on the reduction of their nuclear arsenals. The holding of the Nuclear Security Summit in Washington, D.C., in April also provided a favorable environment for the success on the NPT review conference.
This year is the International Year of Diversity. The Philippines hosts the ASEAN Center for Biodiversity, and is a founding member of the Coral Triangle Initiative, along with Indonesia, Malaysia, Timor Leste, Papua New Guinea and the Solomon Islands -- a triangle which is home to 75 percent of all known coral species, 3,000 species of fish, including tuna and other marine resources. With a high level of biodiversity, the Philippines is among 18 mega-diverse countries.
The Philippines is of the view that development and poverty alleviation are benefits derived from biodiversity. For this reason, the Philippines is committed to biodiversity conservation and to the attainment of the objectives of the Convention on Biological Diversity.
The most important role of the U.N. is the effective discharge of its peacekeeping function. The Philippines is proudly taking part in that role. We have sent more than 1,000 military and police personnel to most of the U.N. peacekeeping missions, specifically in Haiti; Darfur, Sudan; Timor Leste; Liberia and the Cote d'Ivoire.
At the Golan Heights, the U.N. is preventing possible clashes between Israel and Syria. Leading the U.N. disengagement observer force is a Filipino general. A third of the U.N. force in the Golan Heights are Filipino peacekeepers.
Peace in the Middle East is of prime importance to the Philippines, due to the presence of around 2 million of our countrymen working in that region. We note the commitment and personal leadership of President Obama in the Middle East peace process, and wish him success in this endeavor. We are satisfied that there is now a clear recognition of the interlocking linkage between peacekeeping and peacebuilding towards lasting peace, security and development.
In closing, allow me to share with you President Obama's observation about the Philippines. He said, and I quote, "The Philippines punches above its weight in the international arena," close quote. Indeed, we have high aspirations in our foreign relations.
We believe that in the increasingly globalized and interdependent world, national goals and objectives are served by partnerships and collaboration with friends abroad. Our engagements with the rest of the world will always be at the service of our aspiration to build a vibrant nation.
Thank you for your patience, and good afternoon to all. (Applause.)
Thank you.
BRADLEY: Well, Mr. President, congratulations on your election.
AQUINO: Thank you.
BRADLEY: Let me start with a general question. Right after John Kennedy had been elected president, maybe a few months into his term, he was asked the question, so now you're president. How's the country different than you expected it to be?
And Kennedy said, well, when we were campaigning we were talking about what terrible shape the United States was in. And he said, the large surprise, now that we're governing, is everything we said was true. (Laughter.)
So roll back to when you were campaigning. And you had a privileged view of the state of the Philippines, but not the view that you now have. What do you know now that you didn't know when you became president? How's the country doing?
AQUINO: Well, when we started out, during the campaign, we knew that we were in a bad shape. When we got into office, we realized that our estimate was on the optimistic side. (Scattered laughter.)
BRADLEY: Mm-hmm. (In acknowledgement.)
AQUINO: But the pleasant surprise is in spite. For instance, we were supposed to go work for half of the year in 2010. We were left to -- (inaudible) -- about 10 percent of the national budget to spend on the last half of the year.
But the surprising thing is -- look at the numbers that you were quoting earlier, be it the stock market, be it the global (trust ?) bond offer -- very, very successful. But more importantly, our Department of Budget and Management has just informed us that through good governance, improved expenditures, we have actually had a surplus in the second half -- or the second month that we have been in office. That obviously was not expected.
We were -- all our focus has been on controlling the deficit and making sure that our ratings with the various credit agencies will -- credit rating agencies -- will not suffer more, to make our borrowings even that much more expensive to cover deficits. But again, in the past month alone there has been so much good news, you know?
Basically what we thought was the timetable for fixing all of our problems seems to be accelerating, and we hope to continue in that trend. And when I get back home, there's just really a mountain of good news that I'll be bringing back home to our people.
BRADLEY: You mentioned the word "surplus." We in the United States don't know the meaning of that word. So afterwards maybe you could stay back with us and -- (laughter).
You campaigned on a platform of attacking corruption. Give us a sense of just how big a problem this is.
AQUINO: Okay, let me give you one concrete example. We were meeting with the World Bank, I think it was yesterday. They had funded a series of road projects, and they believed that there was collusion amongst the various contractors. There were favored contractors. And they subsequently banned, if memory serves me right, about 10 of these contractors from any World Bank-funded project.
Now, the DPWH, our Department of Public Works and Highways, in control of these projects, subsequently banned the same, but they banned them only from projects that are World Bank-funded. So they were favored again for items apart from that budget. So without any investigations that exonerated them from the charges, they continued in their merry ways, making them that much favored.
I'll give you another example. We had a fertilizer scam in 2004, discovered by a commission and audit in 2008. The project was meant to give farm inputs, be it seeds, be it fertilizers, et cetera, to assist all of our farmers and increase their incomes.
Now, the fertilizers that were purchased were not appropriate for rice, they were exorbitantly overpriced, and at the end of the day most of it was never delivered. So the wrong fertilizer, that was charged at least 300 percent in most instances overpriced, was never even actually delivered.
So our ombudsman, who is tasked with investigating instances of corruption, amongst other things, by government entities, proceeded to investigate that incident four years after it transpired. And in the process, one of the witnesses or maybe a vital witness to that had already died. So even at this stage, no charges have been proffered amongst government officials involved in that program.
And in -- I think it was in 2005 that they had a repeat of this program and the scam nature of it, and perhaps in a slightly lower category. So this is -- and it goes up and down -- (chuckles) -- the chains of government. And that's precisely what we're trying to fight at this point in time.
Now, that fills us also with a sense of urgency, because our judicial system also needs to be really reformed. We have on average about a 14 percent conviction rate, compared to your 80 percent here, compared to 95 percent in Japan. When it comes to cases involving drugs, it becomes even a worse situation: -- 1 percent of conviction. So there are a lot of criminals in our country who are not convinced that they will ever see a day in jail.
So we are working tremendously on that, but the knowledge base was done in 2000, and in 2010 we have already taken steps, finally, to start addressing that problem.
BRADLEY: In an earlier government, not your own, corruption ran all the way to the level of ministers. And presumably those governments were speaking -- weren't making attempts to limit corruption.
What is your sense of what went wrong in the early attempts and what can you do here that's more rigorous than what's been done before?
AQUINO: Well, first of all, the administration that we succeeded had a questioned mandate. The questioned mandate necessitated it favoring a lot of what they perceived as institutions that supported their continued stay in power. So you see it in the Maguindanao massacre; you see it in the delayed investigations of the ministers involved in the fertilizer scam.
Bottom line is any decision that the previous administration had to do always had political considerations, okay? So in our case, we have -- we don't have to rely on the support pillars. We have the people that actually mounted the campaign, came up with all the paraphernalia, became our watchers and inspectors during the whole process of elections and all constantly are there reminding us of our functions as our main support pillar.
So conscious of that, conscious of the fact that we have six years in which to effect all of the necessary changes, we think that we are not constrained by the same political realities of a person running for reelection. We are not constrained by owing just a few selected individuals the logistics for mounting the campaign.
So we have therefore that freedom to try and please most, if not all, of the Filipinos in terms of delivering our promises for good governance. That frees us from all the usual obligations. That empowers us, in turn, to really go after and deliver -- (inaudible) -- for all of these people that have really done so much harm for our countrymen, and really fulfill our promises to those that aspired and joined us in this dream of really transforming our society.
BRADLEY: Let me move to a different topic.
It's hard to have a meeting at the Council on Foreign Relations without having the subject of the rise of China and the relative decline of the United States come up. How do you see China changing in its relations with the Philippines? How present is it? How significant is it?
AQUINO: Well, they -- in terms of what we call the Greater China -- Taiwan, Hong Kong and the People's Republic, the mainland -- they are already -- (inaudible) -- trade, I understand, with the United States.
BRADLEY: So they will be your number-one trading partner in a -- within a matter of a few years?
AQUINO: If things go the same way as it has been. But they have engaged us in really being very friendly. When I was a kid, and whenever you'd think about mainland China and its leaders, they seemed to be aloof, you know? About that much distant, that unattainable. But their embassy, their ambassador has really been quite effective in doing away with that imagery.
Again, let me reiterate it seems that they are really interested in forging very good relations with us, and that goes hand in hand also with our philosophy. They are, of course, a major superpower. We don't even have a single fighter jet in our air force, fighters as a warplane. We have trainers for it.
Really, we are subscribing to the theory that there is prosperity for everybody; it would be in everybody's interest to actually continue the status quo, rather than have flash points that will lead to belligerency and possible altercations that we can't -- we have no hope of winning.
BRADLEY: So is it fair to say that in conversations with your fellow ASEAN leaders there's not a particular concern about the way China is evolving?
AQUINO: I've only had one conversation with my ASEAN counterparts, and I'll be in a series of them tomorrow. And I guess, though, I've spoken is that, you know, there is a brother in region, but he happens to be the biggest brother on the block, you know? (Laughter.)
And we have -- we have competing interests in the Spratly Island groups. One has to -- hopefully, we don't have to hear the phrase "South China Sea" with reference to it being their sea.
BRADLEY: Mmm. (In acknowledgement.)
AQUINO: So far we have not had manifestations that they intend to push us around. But in case that happens, we have -- I think ASEAN has demonstrated that we would stand as a bloc.
BRADLEY: Does the United States feel like it is gradually retreating from the region, or do you feel a greater and greater presence?
AQUINO: In the past few weeks I think the presence of your ballistic missile submarines surfacing in so many ports around the Pacific -- Manila just had the visit by your aircraft carrier George Washington, if I'm not mistaken.
So I think this president has reiterated we are still around, that we can count on the treaties that we have signed with your government for a very long time. And that also I think augurs well for maintaining cordial relations with each other.
BRADLEY: Let me ask you one more question, then we'll open it up here.
The insurgency in the south in this chapter has been going on since the 1970s. Give us the state of the union there. How many, you know, armed insurgents are there? Is it waxing; is it waning?
AQUINO: Well, lately the primary Muslim secessionist group is the Moro Islamic Liberation Front. And the militia, who is a third party in negotiations with the MILF, has indicated intense support for resolving this issue in the shortest time possible. The foreign minister told me that they are focusing on efforts to try and do it within my term.
And lately the MILF has really been trying to discipline its errant members. They've demonstrated that. We are also heartened by the fact that they have, in a sense, toned down their demand from the previous regime. When there were talks previously, they needed solutions that went beyond the ambit of our constitution. Now it seems that to a large degree it will be within the ambit of our constitution, but that makes it even easier to come to terms with them.
So we are very hopeful. We have formed our negotiating panel. We have agreed on the head of the observer group. We -- and when I get home I expect to have -- to be told of the actual date of when the resumption of the peace talks will be.
So if that happens, you would have groups like the Abu Sayyaf deprived of a friendly bases. They will become more and more marginalized and we will have more and more peace in Mindanao. Which, then, will cease to become the land of promise, and become the land of promises realized.
BRADLEY: Let's open it up for questions. May I ask you to follow the Council protocol when we do this, which is to wait for the microphone so we can get it on the record, and then if you would keep your questions to one, and the finally, please identify yourself and your organization.
QUESTIONER: I'm Lucy Komisar. I am a journalist. I speak as somebody who was in Manila during the People Power Revolution in 1986 and then wrote a book about your mother.
It's one of the issues that made me get interested in the whole offshore corruption question, because people told me that Marcos had stolen -- looted the country and put his money in Switzerland.
I'm wondering what you're doing to finally find this, because I understand that one of your agencies has done a report that showed how the money was moved to Liechtenstein and it knows where the money went, about the accounts. And then the investigation just seems to have stopped.
Are you doing anything to find out what happened to what is probably billions of dollars that Marcos may have stolen and might now be hidden, because people afterwards got some of that (cash/cache ?)?
AQUINO: My mother set up a commission called the Presidential Commission on Good Government. I think it was her first -- first order, the very first order of business. And in fairness, it has recovered somewhat in the neighborhoods of about $10 billion to date.
Now, the problem starts with the fact that Mr. Marcos was probably the only person who knew where everything went. And so it's in -- (inaudible) -- depository countries. There were several properties in America and in various other countries.
We have nominated new people to the Presidential Commission on Good Government. The last one had an advocacy only of coming to a splitting of the proceeds between the heirs of Mr. Marcos and government as its main proposal in resolving the issue.
Again, we -- this new -- this new set of commissioners, headed by Dean Andy Bautista, we expect will accelerate the process of our regaining this lost wealth and the interests earned in roughly about 24 years of trying to get -- (inaudible). We don't guarantee perfect results, but intense efforts now will really be done towards recovery of the same.
BRADLEY: Over here, please.
QUESTIONER: Good morning. I'm Antonia Taquifa (ph). I'm currently a visiting scholar at Columbia University Weatherhead Station -- Weatherhead Center of East-West Relations.
And my question is about industrial policy. For the -- for the past two decades, the Philippines has -- the biggest earner of the Philippines has been export labor. And more recently that has been augmented by the spread of call centers, so that what we have right now is actually the start of de-industrialization, according to a lot of, like, the best Philippine economists.
I was wondering if your government has any real, like -- how do you plan to address the fact that there's a need to develop a domestic manufacturing sector, or do you have a plan for that?
AQUINO: There is a plan, but unfortunately we -- (inaudible) -- everything so many (givens ?). Amongst them, power, electricity, in particular. The Philippines has one of the highest rates, sometimes equal to and sometimes greater than that of Japan. And that obviously is a serious hindrance towards revitalizing the manufacturing sector.
That energy situation's being currently addressed. One of the -- one of the meetings I had with a business group had to deal with the provision of a new 600-megawatt facility in Luzon. There are others that we are -- we're trying to push them also in Mindanao. And once -- and there are various tweaks that will be done towards the whole pricing structure and the local -- (inaudible) -- electrical power industry called the P-NOC.
Once all of those are in place we -- we will be bringing down the price of electricity, and hopefully that will -- that will be a boost to manufacturing efforts.
Amongst -- and I'm kind of inhibited to tell you all of the companies that we've talked to so far and the rest of the (operations ?) we'll be talking to later. But manufacturing, the -- there are new investors who will be coming to manufacture various items.
The campaign amongst our Phil-Ams here in America to join us in the campaign to lobby for the Safe Act will in time, four years or so, if it's successful, be able to get us back to the levels of those who were in the garment industry just a few years back. We're down to about 180,000 now from a peak of about 700 (thousand), 800,000 then. In four or five years we might get 580,000 back into the sector. And as you know, those will really induce further growth.
So far the drivers for our economy have to really rely on the business processing outsourcing; tourism, to include medical tourism; agriculture; and mining. But of course my personal dream is to get back that manufacturing aspect.
When you -- when you take a bath and the soap you use is imported from Thailand, amongst other countries, then you wonder how such a low-tech product can't be produced in your own country. So as I said, it's really coming from national pride. That has to also be readdressed.
BRADLEY: Is there a question over here, please, in the orange? Yes.
QUESTIONER: Thank you. I'm Minky Worden from Human Rights Watch.
President Aquino, in your inaugural address you promised to attempt to bring justice for victims of serious human rights abuses, yet hundreds of extra-judicial killings and disappearances have so far gone unprosecuted, except for a handful.
You mentioned that criminals may have a feeling that they will never see a jail cell, and I think some human rights abusers may have the same feeling. What's your government doing -- what steps is it taking to accelerate the process for justice and accountability?
AQUINO: In the first -- accountability, the killings have been with a sense of security. Nobody will ever be brought before the bars of justice and that they can go on their merry way.
But in the first three weeks of our administration there were six killings that could be characterized as extra-legal. Of the six, three of them have already been solved in the third week. And of that, charges have been proffered on all of these three cases. We have in custody several of the assailants.
And may I add that we have a problem with the insurgency. One of them -- not one of these extra-legal killings is supposed to have been done -- and one of the supervisors, they advised the family of the deceased not to cooperate with government. But in spite of that, we did bring them -- (inaudible) -- and the process is undergoing trial.
This is not a matter of state policy, especially under our regime. My father obviously is the reminder that this constant of what was done when a government set up by the people suddenly turns on the people.
As I mentioned in my -- well, other -- (inaudible) -- I'm sorry. I have had so many meetings. I hope I mentioned the idea of judicial reform, though. And judicial reform really is the fourth plank in our platform.
When you don't have really a sense of certainty of punishment, then your peace-and-order situation deteriorates. (Inaudible) -- I got the former chair of the commission on human rights to head their justice department. She is a very driven individual, and she can be counted upon to really deliver in securing all of the convictions necessary to put an end, or at the very least, to mete out the right punishment to people who have transgressed our laws.
So when I talk to our security forces, I keep emphasizing there are greater demands on you, because you cannot deteriorate to the same level as those who are -- that have become outlaws or are outside the (street ?). This is a portion of winning the hearts and minds. It is an investment in ensuring that we deprive these insurgents from their base of support that the people will give them if we are not any different from those that we are fighting.
So towards that end, you know, a parameter of appointment should always -- you know, for especially promotions, has to be an absence of a human rights abuse record in the appointment of various officers.
BRADLEY: With the card up here.
QUESTIONER: Welcome, Mr. President. I'm Jamie Metzl from the Asia Society.
I think everybody, both within the Philippines and outside, is thrilled by your government's commitment to stamping out corruption, which is a scourge that has -- and the Philippines has suffered as a result.
But many of us who are observers of the Philippines also at least observe that there are some deeply structural issues in the Philippines that at least fuel some of the inequality and injustice and also corruption. And foremost among those, it seems, is the maintenance of a at least semi-feudal structure of overall society in the Philippines that is something more akin to Pakistan than to maybe some of -- other countries across the region.
And my question to you is do you accept that characterization of the Philippines, and if so, what is and can your government do to address these deeply structural issues?
AQUINO: One of the current issues that has been brought up by the Philippine Senate has been our emphasis on conditional cash transfers in the budget. They say that these handouts are not the solution and we should go back to the traditional methods of having -- rely on trickle-down economics as the key towards uplifting the lot of our people.
We are of the opinion that we have something like 4.6 million families severely under the poverty line. And if we are not able to help them get even the basics and also at the same time ensure that they keep their students in school and also receive the proper inoculations for monitoring various health conditions, they will forever be a drain on society and the problem just gets on getting worse rather than being solved. They cannot rely, I guess. And what I'm trying to say is -- you cannot rely on the traditional beliefs of the benefits of a growing economy eventually trickling down.
So one might say that that might not be characteristic of a feudal setup, but rather a socialistic setup. And I've been called socialistic and communist at times in my life, you know? But again, it -- I think most of us subscribe to a -- pragmatically, because a lot of us are Christians, and we are responsible for our brothers. That's where it comes from.
Now, we're -- how are we able to do that? Because there is a lot of interest in the private sector for major infrastructure projects so necessary that frees the budget for all of these social concerns. The emphasis on items that will empower the people -- micro finance, for instance; provision of more scholarships -- is, I think, proof that we do not want to maintain relationships or structures of institutions that say certain Filipinos have X rights and other Filipinos have X plus Y rights.
We have gone after what were considered perhaps sacred cows in terms of our fight against tax evasion. One of the first -- the very first individual that -- so charged was -- did not find that -- posted returns that said he had no income for 12 years, but also managed to buy a Lamborghini vehicle in the same period, you know? (Scattered laughter.)
Before, he was not even -- he was not even called to account for his actions. He was the first. Our Bureau of Internal Revenue files cases against these major tax evaders every other week. In between, the Bureau of Customs files cases against smugglers. So to date we have already filed at least several for -- against smugglers, several against tax evaders.
Our biggest businessman (at home ?) received one promise from me during the campaign: We promise you that you will have a level playing field. When you are -- when President Marcos, I guess, started the crony capitalism issue, if there is one favorite, this entity does not become competitive. There's no inducement for him to become competitive.
When we have to open up our doors to global trade, we could not compete because this guy has been subsidized and sheltered for such a long time. But we will promise you the government will help -- no, will assist you, becomes your partner, does not seek to make you a milking cow, but rather as a -- we'll provide the milieu whereby you can prosper and rise to the levels of your competitiveness. That in turn hopefully will be the long -- the parting of the seas for the long-term strategy of our ability to compete globally.
So I cannot subscribe to the idea that we will retain our privileges for a select few and keep us moribund in a situation where there's no potential for growth.
Thank you.
BRADLEY: Someone right here.
QUESTIONER: Hello, Mr. President. I'm Ken Roth, from Human Rights Watch.
You spoke in your opening remarks about ASEAN as a vehicle for promoting democratic values. And I think it's safe to say that the most controversial member of ASEAN has been Burma.
Now, ASEAN has been a tool for engaging with Burma, and that's not going to change. But your predecessors as president, including your mother, all recognized the need for pressure in addition to engagement. They were all quite outspoken about Burmese abuses.
Today the new effort to ratchet up pressure is being introduced at the United Nations in an effort to create a commission of inquiry to look into the atrocities committed by the junta as a way of being clear that ASEAN and the world will not stand for those atrocities and to try to prevent them from spilling over into the future.
Is that an effort that your government would support?
AQUINO: Can I -- can I just speak on behalf of the Philippines? I just met with one of my counterparts.
With respect to the plight now of Burma, especially personified by Aung San Suu Kyi, a person my mother admired and perhaps can identify with, has been -- has merited my support in various petitions, various resolutions when I was a member of the legislature.
A few weeks ago, perhaps a month ago, I did talk to another ASEAN leader. And this guy is a freedom fighter, and he opened my eyes to the other side of the coin. And his premise went something like this:
If the junta in Burma goes, you will have so many divergent groups, you will probably have an unstable country -- for the near future. His premise was this junta is, in a sense, the stabilizing part of that. That was the first time I ever really was introduced to that concept.
I believe that any government that does not truly have the mandate of its people is actually just postponing the inevitable where conflict and national tensions will come to the forefront. And if there is instability in Burma, that affects the whole region. We will be compelled to assist in the case of people who flee, as in the case of Vietnam in the past where we became -- we became hosts for a whole lot of Vietnamese boat people.
And it behooves us to really try and help them achieve stability and a resolution of all of these tensions where the mandate of the people is not really that clear. Towards that end, we will encourage all the other members of ASEAN to revisit this engagement policy, and we will ask what is the best method of dealing with a regime that basically tells the whole world we don't care what your opinion is.
We recognize our limitations, but again, it will not stop us in trying to promote that which will bring the mandate of the people to the forefront. And be the key towards long-term stability, not only for Burma, but the rest of the region.
BRADLEY: At the Atlantic, we have a term that we use for the kind of public speaking that comes at the very end of the meeting. We call it the Elizabeth Taylor School of Public Speaking. (Laughter.)
So as Elizabeth said to each of her five successive husbands, I won't be keeping you long. (Laughter, applause.)
You've honored us by coming today. Thank you very much.
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THIS IS A RUSH TRANSCRIPT.
DAVID BRADLEY: Good afternoon. Good afternoon. Good afternoon, everyone.
On behalf of the Council on Foreign Relations, I want to welcome President Benigno Aquino III. He's the 15th president of the Republic of the Philippines. He enters today his 86th day in office. This is his first overseas trip, officially.
And we're privileged to have you here, Mr. President.
My name is David Bradley. I'm the owner of the Atlantic, in Washington, D.C.
Let me do the dispatching of the administrative details to start with. First, the order of service: I'm going to introduce the president, and the council has asked him if he would speak for about 15 minutes. Following that, we'll move directly to questions and answers. The president and I will sit up here. I'll lead off with five minutes or so of questions, and then we'll open up to everyone.
Next administrative function: Those of you who are journalists, today's conversation is on the record.
May I ask you all to turn off your cell phones and your BlackBerrys? And apparently, we need to ask you to actually turn them off, not move it to vibrate, as it interferes with the sound system if it's on vibrate.
And then, a final administrative note -- this is a note of full disclosure: I'm worried you may find my questions of the president too benign or too mild for a journalist. I was a Fulbright scholar in the Philippines in my 20s, and it is easily one of my unsurpassed years. I have nothing but abashed great -- unabashed great feelings for the country. So I don't have a "Mike Wallace question" in me. (Laughter.) That's going to have to fall to all of you.
So, I don't know that it is the greatest political narrative story in the world, but it is surely one of the greatest political narrative stories of the last hundred years: the rise of the Aquino family in Tarlac, Luzon, the Philippines. President Aquino's great-grandfather was a revolutionary general who fought in turn the Spanish and then the Americans. He was twice sentenced to death. President Aquino's grandfather, a more controversial figure, was imprisoned by the Americans.
But it was the imprisonment of his father Ninoy Aquino that thrust the family name onto the world stage. Noynoy Aquino, as he is known -- as the president is known, was 12 years old when his father was taken by the Marcos government and charged with subversion and murder. He was 17 years old when the trial finally finished and his father was sentenced to death. He was 20 years old when, in a surprise visit, Imelda Marcos showed up at the prison, had Ninoy Aquino released and placed into exile in the United States. And now-President Aquino was 23 years old when his father famously boarded Chinese Air flight 811 to return to the Philippines in protest, and he was assassinated on the tarmac on deplaning.
Everyone knows the whole -- story after that: the return of Cory Aquino to the Philippines, the election of 1986, which was stolen from her, the People Power Revolution that spilled out onto the streets of the highway, EDSA, that you'll all remember the television images of, and then the flight of the Marcos family, fleeing into the night aboard an American helicopter that had been sent from Clark Air Force Base.
What you may not know is the letter that became famous in the Philippines during the last presidential campaign, the one that President Aquino just won. This was written in 1973 by an imprisoned Ninoy Aquino to his son Noynoy, who was 13 years old at the time. I'm just going to read you a portion of the letter.
"My dear son, this afternoon I have arrived at my moment of truth. I've decided not to participate in the proceedings of the military commission assigned to take charges filed against me.
"You are still too young to grasp the full impact of my decision. Briefly, by not participating in the proceedings, I will not be represented by counsel. I will not put up any defense. I expect to be sentenced to imprisonment for the rest of my natural life, or possibly to be sent to stand before a firing squad.
"Forgive me for passing on to your young shoulders the great responsibilities of our family. I trust you will love your mother and your sisters, and lavish them with the care and protection I would have given them.
"I had hopes of introducing you to my friends, showing you the world and guiding you through the maze of survival. I'm afraid you will not -- you will now have to go it alone, without your guide.
"There's no greater nation on Earth than our motherland, no greater people than our own. Serve them with all your heart. Son, the ball is now in your hands.
"Lovingly, Dad."
This letter became a major piece of the campaign that just took place, especially that closing line, "Son, the ball is now in your hands." So running on a platform of attacking government corruption, President Aquino in a field of 10 candidates won 40 percent of the vote. It was 5 million votes more than the next candidate.
By the time of his inauguration, which was the end of June, he had an 85 percent favorable rating in Philippine polls. That's the highest favorable rating in Philippine polling history.
And Time magazine described him -- here I'm quoting -- as of "Gandhian simplicity and uprightness."
For those of us who have trouble summoning an 85 percent approval rate in our nuclear families -- (laughter) -- this is as good as life ever becomes. I don't know how you can do better than your start in office, but it is a remarkable start. So join me in welcoming the president of the Philippines. (Applause.)
PRESIDENT BENIGNO S. AQUINO III: Thank you. Thank you, Mr. Bradley, for those very inspiring words. It reminds me that my father's looking at us right now. And if I fail to live up to his expectations, I might wind up on the floor in a little while. (Soft laughter.)
(Dr. Haass ?), distinguished members of the Council on Foreign Relations, members of my delegation, ladies and gentlemen, good afternoon. Thank you for the warm welcome and kind introduction. I appreciate this great opportunity to engage you in a conversation about the Philippines. I am here to share with you the aspirations of close to 100 million Filipinos that I represent.
Today, I took my oath -- my oath of office as president. I vowed to our people that I will dedicate my life to making our democracy reach its fullest potential, that of ensuring equal opportunity for all.
In an essay he wrote in 1968 for Foreign Affairs, my father lamented, and I quote, "that the blessings of liberty have not included liberation from poverty, and that there are great disparities and chronic inequities of Philippine society." His words still remain true today.
I was put into office by the people who believed in my idea that corruption is the root of poverty; that an end to corruption would mean an end to poverty. My government is ready to deliver on the second part of this pledge. We will channel any gains into the people through social services like education, health and conditional cash transfers that serve both as life vests for the poorest of the poor and incentives to ensure that they can move forward in life by getting educated and staying healthy.
My government's mantra is to guarantee a more equitable distribution of our nation's resources. This can only be achieved through stronger economic growth, investments -- (very ?) needed in social services. But they are also necessary in infrastructure, utilities and job-generating enterprises.
Given the scarce resources that we have, attracting foreign capital has become a vital component of my anti-poverty program. And I am here today to tell you that my government is doing what it takes to create a more investor-friendly environment. Part of my mandate is to curb corruption and streamline a cumbersome, graft-ridden bureaucracy, to put resources where they will provide the clearest results, and to untangle a complicated regulatory environment.
The mission I have set out for myself is to lead by example, rally our people and unite them behind a common sense of purpose. It is imperative for us to work hand in glove and persevere in creating a just society for all. I have laid out the tenets that will mark the new Philippines: good governance, employment generation, quality education, improved public health, and a home for every family within safe communities.
Even as we exert our best to create jobs at home, the immediate reality is that many of my compatriots continue to seek greener pastures abroad. This makes them vulnerable to human traffickers and illegal recruiters. We are thus doubling our efforts to bring the full force of the law against those who prey on the vulnerable.
We have committed to restore integrity in leadership and governance. We will battle corruption, cut red tape and exact the highest standards of performance from our bureaucracy. The government must earn the full trust and confidence of its citizens. This trust and confidence is the motive force that would get them actively involved in building and rebuilding our nation. By empowering the people and nurturing democratic participation, we can truly bring about real reforms.
Ladies and gentlemen, I came here to declare that the Philippines is open for business under new management. Today I invite you to take part in the transformation of the Philippines. We are striving in earnest to build a government where everything works and pursue programs for our economic take-off.
The forging of private-public partnerships, or PPPs, would be our main engine in revving up our economy. We will enlist the participation of the private sector, both domestic and foreign, in big-ticket, capital-intensive infrastructure projects, while ensuring reasonable returns. We shall officially launch the PPPs this October. An initial list of 10 PPP projects worth $4.5 billion is already being developed. We look forward to the participation of the U.S. investors, specifically as we open up our infrastructure sector for foreign participation.
There is no better time than now to bank on the Philippines and lay the groundwork for future long-term business and economic success. The global economic recovery, growth in international trade and overall as improved levels of confidence, have already borne fruit. In the first half of 2010, the Philippine economy showed robust growth of 7.8 percent and 7.9 percent. Full-year GDP growth will likely reach the upper end of the 5 to 6 percent -- percentile target. Perhaps, we hope, we can even reach higher.
There was a return of the bulls to our local stock market. Trading has reached fever pitch, and foreign funds are streaming our way. There was a net inflow of $128 million in foreign direct investments in June of 2010, as compared to the previous month's net outflow. Since the end of June, when I was inaugurated president, 754.55 billion pesos in wealth was created, when measured by the increase in domestic market capitalization.
For the first time, the Philippines was also able to raise $1 billion through the sale of a peso-denominated global bond. This bond issuance generated high investor interest from across the globe, from Asia, Europe and the United States.
Financial analysts point to good governance and market-driven economic growth as the impetus for this investor confidence. Our doors are wide open for investors, particularly in tourism, business process outsourcing, mining, electronics, housing and agricultural sectors.
Tourism is a crucial industry that could employ millions of Filipinos, skilled and unskilled alike, cross those 7,107 islands of the Philippines. (Coughs.) Excuse me.
From the current projection of 3.3 million tourist arrivals in 2010, our aim is to eventually attract 6 million tourists. In the process, we expect to create 3 million jobs in the next six years.
BPO continues to be a sunrise industry in the Philippines. From virtually nothing 10 years ago, this sector has grown into a $7.2 billion industry, employing 450,000 people. Today the Philippines has the second-biggest BPO industry in the world, next only to India, and growth forecast remains very encouraging on the long term.
The Philippines has vast minerals that are still untapped. It has one of the world's largest deposits of gold, nickel, copper and chromite. Through responsible mining, we intend to generate more revenues from the extraction of these resources.
If we succeed in getting the support of foreign and local investors for our PPP programs, we will have money to spend for the delivery of much-needed social services across the country. As we strengthen our economic infrastructure, we will also create the peaceful and stable environment necessary for economic growth.
I offered -- (clears throat) -- excuse me -- I have offered a place at the table for everyone who wants to talk about peace, to unite our country and bring the disillusioned and the disenfranchised who have chosen the violent path back into our -- excuse me -- back into our democratic mainstream. My administration's compact with the Filipino people will demand no less than the attainment of lasting peace and equitable prosperity. We will employ all the tools at our disposal to achieve this.
The Philippine relations with the United States are vital. The special ties that exist between us, our security allies and development partners serve as a steady anchor in American engagement towards the Asia-Pacific. The earlier, colonial patron-client relationship has evolved through the years into modern, mature and mutually beneficial relations.
Our economic relations are robust. The United States is among our leading trade partners. It ranks as our largest export market and second-largest supplier. About 18 percent of total Philippine exports were bound for the U.S. and approximately 12 percent of our imports were sought from America last year. The U.S. has also been traditionally the Philippines' largest foreign investor, mostly in the manufacturing sector.
We are now advocating for the passage of a bill pending in the U.S. Congress known as the Save our Industries Act, or the Save Act. If signed into law, it would give duty-free breaks for Philippine garment exports to the U.S. which were processed from U.S.-made fabrics. It will also give reduced tariffs on those that use U.S.-made yarns. This is a win-win proposition for both the U.S. and the Philippines. It will reinvigorate both the U.S. textile industry and our garments industry, and create jobs on both sides of the Pacific.
During my visit here I particularly look forward to our signing of the Millennium Challenge compact agreement. This is a vote of confidence on our commitment to reduce poverty, generate revenues through our tough campaign against graft and corruption, and to modernize our infrastructure.
As you may know, the Millennium Challenge Corporation, or MCC, awards grants only to countries which rule justly, promote economic freedom, and invest in their people.
With keen interest we note the Obama administration's focus in negotiating a regional Asia-Pacific trade agreement known as the Trans-Pacific Partnership Agreement. Envisioned as a platform for economic integration across the region, the TPP countries would be in the best place to become the region's leading hub for trade investment and growth.
The Philippines aims to engage the U.S. in a joint trade initiative that would serve as mutual building blocks for our eventual participation in the Trans-Pacific Partnership. Just like other ASEAN member states, the Philippines is already positioning itself as a viable member of the Trans-Pacific Partnership.
We seek U.S. support for this, as we recognize its leadership role as host of the APEC in 2011.
In regional affairs, the Philippines has been a dynamic player, especially in ASEAN. From a small grouping of 10 nations, ASEAN has now emerged as the nucleus of regional dialogue and cooperation.
The ASEAN charter was adopted in December 2008 that conferred leader status to the organization and laid down a clear road map towards building an ASEAN community by 2015.
A Philippine initiative was the inclusion of a provision in the charter calling for the establishment of a human rights body called the ASEAN Intergovernmental Commission on Human Rights. Still in its incipient stage, this body stands much to gain from U.S. partnership in capacity building. For its part, the Philippines stands by its offer to host its secretariat.
On human rights protection and promotion, we look forward to greater cooperation with the U.S. as the Philippines, once again, endeavors to be the citadel for human rights, democracy and good governance in our own region. Right now the Philippines is a nexus for the ASEAN-U.S. relations as country coordinator.
Fulfilling this mandate has been -- benefited by the renewed interest of the U.S. in Southeast Asia. President Obama's vow in 2009 to be a Pacific president generated excitement in our region. Prior to this, most countries in the region felt that they had become mere blips in the American radar screen as Washington, D.C., focused on the Middle East, particularly on Iraq.
Perhaps the strongest signal of reengagement with Southeast Asia was the U.S.'s accession to the Southeast Asian Treaty of Amity and Cooperation. President Obama was also the first American president to meet with ASEAN leaders in the first ASEAN-U.S. summit in Singapore of last year. These augur well for a broadening and deepening of ASEAN-U.S. interactions at an accelerated pace.
Our second ASEAN-U.S. summit tomorrow will reinforce this new era of ASEAN-U.S. relations. The U.S. is a major trading partner of ASEAN. ASEAN, in turn, has been one of the fastest-growing export markets and host of U.S. investments.
The Philippines would like to see the enhanced implementation of the ASEAN-U.S. Trade and Investment Framework Arrangement. An economically viable and strong ASEAN facilitates stability and prosperity, and the TIFA is a vital tool for economic growth, job creation and improved welfare of our peoples.
Connectivity has become another buzzword in ASEAN in past year. We expect the master plan on ASEAN connectivity to be ready by the ASEAN summit next month. Three key elements characterize our connectivity master plan: physical connectivity, referring to transport connectivity; institutional connectivity, referring to trade and investment liberalization; and people-to-people connectivity, referring to tourism, education and cultural exchange.
You will note that these three elements of connectivity point to the economic, political, security and socio-cultural goals of ASEAN community building. Given its unique geographic locations, the Philippines in particular look forward to the development of a nautical highway to ensure that we remain connected to our neighbors in the region. Forging public-private partnerships will make the connectivity in ASEAN a reality, and we look forward to the strong support of the U.S. for this initiative.
At the ASEAN ministerial meeting and ASEAN regional forum in Hanoi last July, the South China Sea issue was discussed. The Philippines welcomed State Secretary -- Secretary of State, rather -- Hillary Clinton's statement to the forum that, while the U.S. takes no sides in the dispute in the South China Sea, that claimant states should resolve their disputes through a collaborative diplomatic process and in accordance with international law.
The Philippines and the U.S. share the need to maintain unimpeded maritime commerce and navigation. The Philippines believes that it is in the best interests of the region to transform this potential flash point into a zone of peace, friendship, freedom and cooperation through sustained consultation and dialogue.
A most pressing phenomenon that confronts and threatens humankind today is climate change. The Philippines has a very negligible carbon footprint. It produces only one-third of 1 percent of the global greenhouse gases. Yet it is in the U.N.'s roster of top 12 countries most vulnerable to climate change.
Two devastating typhoons hit us last year and damage to our crops and property was equivalent to 2.7 percent of our gross domestic product. That is why in climate change negotiations we have been calling for deep and early cuts in the greenhouse gas emissions of developed countries. We urge them to support the developing countries in terms of financing, technology transfer and capacity building for climate change mitigation and adaptation efforts as a form of restitution or climate justice.
The Philippines has a renewable energy act. It is a legal framework for the harnessing of our renewable sources of energy, including foreign investments, and we invite U.S. involvement in this program. We also appreciate the USAID's promotion of clean energy technologies in the Philippines -- modest beginnings for our goals towards green growth and green economy.
The world looks up to the U.S. leadership in climate-change negotiations and in putting in place an international framework on climate change. Still, within the auspices of the United Nations, the Philippines steered the crucial negotiations of the 2010 review conference of the Nuclear Nonproliferation Treaty last May here in New York.
As president of that conference, the Philippines helped revive the moribund NPT. It helped garner consensus towards a comprehensive approach to nuclear disarmament, nuclear nonproliferation, and the peaceful uses of nuclear energy. After a month-long intensive negotiation, a 64-point action plan was adopted. This was both historic and unprecedented. More daunting challenges lie ahead.
The Philippines and ASEAN will continue to stress the importance of the Southeast Asian Nuclear Weapons-Free Zone Treaty in preserving peace and security in the region. We strongly urge the nuclear-weapon states to accede to its protocol.
We laud the U.S.'s own disarmament efforts. We are encouraged by the success of the U.S.-Russia START talks this year on the reduction of their nuclear arsenals. The holding of the Nuclear Security Summit in Washington, D.C., in April also provided a favorable environment for the success on the NPT review conference.
This year is the International Year of Diversity. The Philippines hosts the ASEAN Center for Biodiversity, and is a founding member of the Coral Triangle Initiative, along with Indonesia, Malaysia, Timor Leste, Papua New Guinea and the Solomon Islands -- a triangle which is home to 75 percent of all known coral species, 3,000 species of fish, including tuna and other marine resources. With a high level of biodiversity, the Philippines is among 18 mega-diverse countries.
The Philippines is of the view that development and poverty alleviation are benefits derived from biodiversity. For this reason, the Philippines is committed to biodiversity conservation and to the attainment of the objectives of the Convention on Biological Diversity.
The most important role of the U.N. is the effective discharge of its peacekeeping function. The Philippines is proudly taking part in that role. We have sent more than 1,000 military and police personnel to most of the U.N. peacekeeping missions, specifically in Haiti; Darfur, Sudan; Timor Leste; Liberia and the Cote d'Ivoire.
At the Golan Heights, the U.N. is preventing possible clashes between Israel and Syria. Leading the U.N. disengagement observer force is a Filipino general. A third of the U.N. force in the Golan Heights are Filipino peacekeepers.
Peace in the Middle East is of prime importance to the Philippines, due to the presence of around 2 million of our countrymen working in that region. We note the commitment and personal leadership of President Obama in the Middle East peace process, and wish him success in this endeavor. We are satisfied that there is now a clear recognition of the interlocking linkage between peacekeeping and peacebuilding towards lasting peace, security and development.
In closing, allow me to share with you President Obama's observation about the Philippines. He said, and I quote, "The Philippines punches above its weight in the international arena," close quote. Indeed, we have high aspirations in our foreign relations.
We believe that in the increasingly globalized and interdependent world, national goals and objectives are served by partnerships and collaboration with friends abroad. Our engagements with the rest of the world will always be at the service of our aspiration to build a vibrant nation.
Thank you for your patience, and good afternoon to all. (Applause.)
Thank you.
BRADLEY: Well, Mr. President, congratulations on your election.
AQUINO: Thank you.
BRADLEY: Let me start with a general question. Right after John Kennedy had been elected president, maybe a few months into his term, he was asked the question, so now you're president. How's the country different than you expected it to be?
And Kennedy said, well, when we were campaigning we were talking about what terrible shape the United States was in. And he said, the large surprise, now that we're governing, is everything we said was true. (Laughter.)
So roll back to when you were campaigning. And you had a privileged view of the state of the Philippines, but not the view that you now have. What do you know now that you didn't know when you became president? How's the country doing?
AQUINO: Well, when we started out, during the campaign, we knew that we were in a bad shape. When we got into office, we realized that our estimate was on the optimistic side. (Scattered laughter.)
BRADLEY: Mm-hmm. (In acknowledgement.)
AQUINO: But the pleasant surprise is in spite. For instance, we were supposed to go work for half of the year in 2010. We were left to -- (inaudible) -- about 10 percent of the national budget to spend on the last half of the year.
But the surprising thing is -- look at the numbers that you were quoting earlier, be it the stock market, be it the global (trust ?) bond offer -- very, very successful. But more importantly, our Department of Budget and Management has just informed us that through good governance, improved expenditures, we have actually had a surplus in the second half -- or the second month that we have been in office. That obviously was not expected.
We were -- all our focus has been on controlling the deficit and making sure that our ratings with the various credit agencies will -- credit rating agencies -- will not suffer more, to make our borrowings even that much more expensive to cover deficits. But again, in the past month alone there has been so much good news, you know?
Basically what we thought was the timetable for fixing all of our problems seems to be accelerating, and we hope to continue in that trend. And when I get back home, there's just really a mountain of good news that I'll be bringing back home to our people.
BRADLEY: You mentioned the word "surplus." We in the United States don't know the meaning of that word. So afterwards maybe you could stay back with us and -- (laughter).
You campaigned on a platform of attacking corruption. Give us a sense of just how big a problem this is.
AQUINO: Okay, let me give you one concrete example. We were meeting with the World Bank, I think it was yesterday. They had funded a series of road projects, and they believed that there was collusion amongst the various contractors. There were favored contractors. And they subsequently banned, if memory serves me right, about 10 of these contractors from any World Bank-funded project.
Now, the DPWH, our Department of Public Works and Highways, in control of these projects, subsequently banned the same, but they banned them only from projects that are World Bank-funded. So they were favored again for items apart from that budget. So without any investigations that exonerated them from the charges, they continued in their merry ways, making them that much favored.
I'll give you another example. We had a fertilizer scam in 2004, discovered by a commission and audit in 2008. The project was meant to give farm inputs, be it seeds, be it fertilizers, et cetera, to assist all of our farmers and increase their incomes.
Now, the fertilizers that were purchased were not appropriate for rice, they were exorbitantly overpriced, and at the end of the day most of it was never delivered. So the wrong fertilizer, that was charged at least 300 percent in most instances overpriced, was never even actually delivered.
So our ombudsman, who is tasked with investigating instances of corruption, amongst other things, by government entities, proceeded to investigate that incident four years after it transpired. And in the process, one of the witnesses or maybe a vital witness to that had already died. So even at this stage, no charges have been proffered amongst government officials involved in that program.
And in -- I think it was in 2005 that they had a repeat of this program and the scam nature of it, and perhaps in a slightly lower category. So this is -- and it goes up and down -- (chuckles) -- the chains of government. And that's precisely what we're trying to fight at this point in time.
Now, that fills us also with a sense of urgency, because our judicial system also needs to be really reformed. We have on average about a 14 percent conviction rate, compared to your 80 percent here, compared to 95 percent in Japan. When it comes to cases involving drugs, it becomes even a worse situation: -- 1 percent of conviction. So there are a lot of criminals in our country who are not convinced that they will ever see a day in jail.
So we are working tremendously on that, but the knowledge base was done in 2000, and in 2010 we have already taken steps, finally, to start addressing that problem.
BRADLEY: In an earlier government, not your own, corruption ran all the way to the level of ministers. And presumably those governments were speaking -- weren't making attempts to limit corruption.
What is your sense of what went wrong in the early attempts and what can you do here that's more rigorous than what's been done before?
AQUINO: Well, first of all, the administration that we succeeded had a questioned mandate. The questioned mandate necessitated it favoring a lot of what they perceived as institutions that supported their continued stay in power. So you see it in the Maguindanao massacre; you see it in the delayed investigations of the ministers involved in the fertilizer scam.
Bottom line is any decision that the previous administration had to do always had political considerations, okay? So in our case, we have -- we don't have to rely on the support pillars. We have the people that actually mounted the campaign, came up with all the paraphernalia, became our watchers and inspectors during the whole process of elections and all constantly are there reminding us of our functions as our main support pillar.
So conscious of that, conscious of the fact that we have six years in which to effect all of the necessary changes, we think that we are not constrained by the same political realities of a person running for reelection. We are not constrained by owing just a few selected individuals the logistics for mounting the campaign.
So we have therefore that freedom to try and please most, if not all, of the Filipinos in terms of delivering our promises for good governance. That frees us from all the usual obligations. That empowers us, in turn, to really go after and deliver -- (inaudible) -- for all of these people that have really done so much harm for our countrymen, and really fulfill our promises to those that aspired and joined us in this dream of really transforming our society.
BRADLEY: Let me move to a different topic.
It's hard to have a meeting at the Council on Foreign Relations without having the subject of the rise of China and the relative decline of the United States come up. How do you see China changing in its relations with the Philippines? How present is it? How significant is it?
AQUINO: Well, they -- in terms of what we call the Greater China -- Taiwan, Hong Kong and the People's Republic, the mainland -- they are already -- (inaudible) -- trade, I understand, with the United States.
BRADLEY: So they will be your number-one trading partner in a -- within a matter of a few years?
AQUINO: If things go the same way as it has been. But they have engaged us in really being very friendly. When I was a kid, and whenever you'd think about mainland China and its leaders, they seemed to be aloof, you know? About that much distant, that unattainable. But their embassy, their ambassador has really been quite effective in doing away with that imagery.
Again, let me reiterate it seems that they are really interested in forging very good relations with us, and that goes hand in hand also with our philosophy. They are, of course, a major superpower. We don't even have a single fighter jet in our air force, fighters as a warplane. We have trainers for it.
Really, we are subscribing to the theory that there is prosperity for everybody; it would be in everybody's interest to actually continue the status quo, rather than have flash points that will lead to belligerency and possible altercations that we can't -- we have no hope of winning.
BRADLEY: So is it fair to say that in conversations with your fellow ASEAN leaders there's not a particular concern about the way China is evolving?
AQUINO: I've only had one conversation with my ASEAN counterparts, and I'll be in a series of them tomorrow. And I guess, though, I've spoken is that, you know, there is a brother in region, but he happens to be the biggest brother on the block, you know? (Laughter.)
And we have -- we have competing interests in the Spratly Island groups. One has to -- hopefully, we don't have to hear the phrase "South China Sea" with reference to it being their sea.
BRADLEY: Mmm. (In acknowledgement.)
AQUINO: So far we have not had manifestations that they intend to push us around. But in case that happens, we have -- I think ASEAN has demonstrated that we would stand as a bloc.
BRADLEY: Does the United States feel like it is gradually retreating from the region, or do you feel a greater and greater presence?
AQUINO: In the past few weeks I think the presence of your ballistic missile submarines surfacing in so many ports around the Pacific -- Manila just had the visit by your aircraft carrier George Washington, if I'm not mistaken.
So I think this president has reiterated we are still around, that we can count on the treaties that we have signed with your government for a very long time. And that also I think augurs well for maintaining cordial relations with each other.
BRADLEY: Let me ask you one more question, then we'll open it up here.
The insurgency in the south in this chapter has been going on since the 1970s. Give us the state of the union there. How many, you know, armed insurgents are there? Is it waxing; is it waning?
AQUINO: Well, lately the primary Muslim secessionist group is the Moro Islamic Liberation Front. And the militia, who is a third party in negotiations with the MILF, has indicated intense support for resolving this issue in the shortest time possible. The foreign minister told me that they are focusing on efforts to try and do it within my term.
And lately the MILF has really been trying to discipline its errant members. They've demonstrated that. We are also heartened by the fact that they have, in a sense, toned down their demand from the previous regime. When there were talks previously, they needed solutions that went beyond the ambit of our constitution. Now it seems that to a large degree it will be within the ambit of our constitution, but that makes it even easier to come to terms with them.
So we are very hopeful. We have formed our negotiating panel. We have agreed on the head of the observer group. We -- and when I get home I expect to have -- to be told of the actual date of when the resumption of the peace talks will be.
So if that happens, you would have groups like the Abu Sayyaf deprived of a friendly bases. They will become more and more marginalized and we will have more and more peace in Mindanao. Which, then, will cease to become the land of promise, and become the land of promises realized.
BRADLEY: Let's open it up for questions. May I ask you to follow the Council protocol when we do this, which is to wait for the microphone so we can get it on the record, and then if you would keep your questions to one, and the finally, please identify yourself and your organization.
QUESTIONER: I'm Lucy Komisar. I am a journalist. I speak as somebody who was in Manila during the People Power Revolution in 1986 and then wrote a book about your mother.
It's one of the issues that made me get interested in the whole offshore corruption question, because people told me that Marcos had stolen -- looted the country and put his money in Switzerland.
I'm wondering what you're doing to finally find this, because I understand that one of your agencies has done a report that showed how the money was moved to Liechtenstein and it knows where the money went, about the accounts. And then the investigation just seems to have stopped.
Are you doing anything to find out what happened to what is probably billions of dollars that Marcos may have stolen and might now be hidden, because people afterwards got some of that (cash/cache ?)?
AQUINO: My mother set up a commission called the Presidential Commission on Good Government. I think it was her first -- first order, the very first order of business. And in fairness, it has recovered somewhat in the neighborhoods of about $10 billion to date.
Now, the problem starts with the fact that Mr. Marcos was probably the only person who knew where everything went. And so it's in -- (inaudible) -- depository countries. There were several properties in America and in various other countries.
We have nominated new people to the Presidential Commission on Good Government. The last one had an advocacy only of coming to a splitting of the proceeds between the heirs of Mr. Marcos and government as its main proposal in resolving the issue.
Again, we -- this new -- this new set of commissioners, headed by Dean Andy Bautista, we expect will accelerate the process of our regaining this lost wealth and the interests earned in roughly about 24 years of trying to get -- (inaudible). We don't guarantee perfect results, but intense efforts now will really be done towards recovery of the same.
BRADLEY: Over here, please.
QUESTIONER: Good morning. I'm Antonia Taquifa (ph). I'm currently a visiting scholar at Columbia University Weatherhead Station -- Weatherhead Center of East-West Relations.
And my question is about industrial policy. For the -- for the past two decades, the Philippines has -- the biggest earner of the Philippines has been export labor. And more recently that has been augmented by the spread of call centers, so that what we have right now is actually the start of de-industrialization, according to a lot of, like, the best Philippine economists.
I was wondering if your government has any real, like -- how do you plan to address the fact that there's a need to develop a domestic manufacturing sector, or do you have a plan for that?
AQUINO: There is a plan, but unfortunately we -- (inaudible) -- everything so many (givens ?). Amongst them, power, electricity, in particular. The Philippines has one of the highest rates, sometimes equal to and sometimes greater than that of Japan. And that obviously is a serious hindrance towards revitalizing the manufacturing sector.
That energy situation's being currently addressed. One of the -- one of the meetings I had with a business group had to deal with the provision of a new 600-megawatt facility in Luzon. There are others that we are -- we're trying to push them also in Mindanao. And once -- and there are various tweaks that will be done towards the whole pricing structure and the local -- (inaudible) -- electrical power industry called the P-NOC.
Once all of those are in place we -- we will be bringing down the price of electricity, and hopefully that will -- that will be a boost to manufacturing efforts.
Amongst -- and I'm kind of inhibited to tell you all of the companies that we've talked to so far and the rest of the (operations ?) we'll be talking to later. But manufacturing, the -- there are new investors who will be coming to manufacture various items.
The campaign amongst our Phil-Ams here in America to join us in the campaign to lobby for the Safe Act will in time, four years or so, if it's successful, be able to get us back to the levels of those who were in the garment industry just a few years back. We're down to about 180,000 now from a peak of about 700 (thousand), 800,000 then. In four or five years we might get 580,000 back into the sector. And as you know, those will really induce further growth.
So far the drivers for our economy have to really rely on the business processing outsourcing; tourism, to include medical tourism; agriculture; and mining. But of course my personal dream is to get back that manufacturing aspect.
When you -- when you take a bath and the soap you use is imported from Thailand, amongst other countries, then you wonder how such a low-tech product can't be produced in your own country. So as I said, it's really coming from national pride. That has to also be readdressed.
BRADLEY: Is there a question over here, please, in the orange? Yes.
QUESTIONER: Thank you. I'm Minky Worden from Human Rights Watch.
President Aquino, in your inaugural address you promised to attempt to bring justice for victims of serious human rights abuses, yet hundreds of extra-judicial killings and disappearances have so far gone unprosecuted, except for a handful.
You mentioned that criminals may have a feeling that they will never see a jail cell, and I think some human rights abusers may have the same feeling. What's your government doing -- what steps is it taking to accelerate the process for justice and accountability?
AQUINO: In the first -- accountability, the killings have been with a sense of security. Nobody will ever be brought before the bars of justice and that they can go on their merry way.
But in the first three weeks of our administration there were six killings that could be characterized as extra-legal. Of the six, three of them have already been solved in the third week. And of that, charges have been proffered on all of these three cases. We have in custody several of the assailants.
And may I add that we have a problem with the insurgency. One of them -- not one of these extra-legal killings is supposed to have been done -- and one of the supervisors, they advised the family of the deceased not to cooperate with government. But in spite of that, we did bring them -- (inaudible) -- and the process is undergoing trial.
This is not a matter of state policy, especially under our regime. My father obviously is the reminder that this constant of what was done when a government set up by the people suddenly turns on the people.
As I mentioned in my -- well, other -- (inaudible) -- I'm sorry. I have had so many meetings. I hope I mentioned the idea of judicial reform, though. And judicial reform really is the fourth plank in our platform.
When you don't have really a sense of certainty of punishment, then your peace-and-order situation deteriorates. (Inaudible) -- I got the former chair of the commission on human rights to head their justice department. She is a very driven individual, and she can be counted upon to really deliver in securing all of the convictions necessary to put an end, or at the very least, to mete out the right punishment to people who have transgressed our laws.
So when I talk to our security forces, I keep emphasizing there are greater demands on you, because you cannot deteriorate to the same level as those who are -- that have become outlaws or are outside the (street ?). This is a portion of winning the hearts and minds. It is an investment in ensuring that we deprive these insurgents from their base of support that the people will give them if we are not any different from those that we are fighting.
So towards that end, you know, a parameter of appointment should always -- you know, for especially promotions, has to be an absence of a human rights abuse record in the appointment of various officers.
BRADLEY: With the card up here.
QUESTIONER: Welcome, Mr. President. I'm Jamie Metzl from the Asia Society.
I think everybody, both within the Philippines and outside, is thrilled by your government's commitment to stamping out corruption, which is a scourge that has -- and the Philippines has suffered as a result.
But many of us who are observers of the Philippines also at least observe that there are some deeply structural issues in the Philippines that at least fuel some of the inequality and injustice and also corruption. And foremost among those, it seems, is the maintenance of a at least semi-feudal structure of overall society in the Philippines that is something more akin to Pakistan than to maybe some of -- other countries across the region.
And my question to you is do you accept that characterization of the Philippines, and if so, what is and can your government do to address these deeply structural issues?
AQUINO: One of the current issues that has been brought up by the Philippine Senate has been our emphasis on conditional cash transfers in the budget. They say that these handouts are not the solution and we should go back to the traditional methods of having -- rely on trickle-down economics as the key towards uplifting the lot of our people.
We are of the opinion that we have something like 4.6 million families severely under the poverty line. And if we are not able to help them get even the basics and also at the same time ensure that they keep their students in school and also receive the proper inoculations for monitoring various health conditions, they will forever be a drain on society and the problem just gets on getting worse rather than being solved. They cannot rely, I guess. And what I'm trying to say is -- you cannot rely on the traditional beliefs of the benefits of a growing economy eventually trickling down.
So one might say that that might not be characteristic of a feudal setup, but rather a socialistic setup. And I've been called socialistic and communist at times in my life, you know? But again, it -- I think most of us subscribe to a -- pragmatically, because a lot of us are Christians, and we are responsible for our brothers. That's where it comes from.
Now, we're -- how are we able to do that? Because there is a lot of interest in the private sector for major infrastructure projects so necessary that frees the budget for all of these social concerns. The emphasis on items that will empower the people -- micro finance, for instance; provision of more scholarships -- is, I think, proof that we do not want to maintain relationships or structures of institutions that say certain Filipinos have X rights and other Filipinos have X plus Y rights.
We have gone after what were considered perhaps sacred cows in terms of our fight against tax evasion. One of the first -- the very first individual that -- so charged was -- did not find that -- posted returns that said he had no income for 12 years, but also managed to buy a Lamborghini vehicle in the same period, you know? (Scattered laughter.)
Before, he was not even -- he was not even called to account for his actions. He was the first. Our Bureau of Internal Revenue files cases against these major tax evaders every other week. In between, the Bureau of Customs files cases against smugglers. So to date we have already filed at least several for -- against smugglers, several against tax evaders.
Our biggest businessman (at home ?) received one promise from me during the campaign: We promise you that you will have a level playing field. When you are -- when President Marcos, I guess, started the crony capitalism issue, if there is one favorite, this entity does not become competitive. There's no inducement for him to become competitive.
When we have to open up our doors to global trade, we could not compete because this guy has been subsidized and sheltered for such a long time. But we will promise you the government will help -- no, will assist you, becomes your partner, does not seek to make you a milking cow, but rather as a -- we'll provide the milieu whereby you can prosper and rise to the levels of your competitiveness. That in turn hopefully will be the long -- the parting of the seas for the long-term strategy of our ability to compete globally.
So I cannot subscribe to the idea that we will retain our privileges for a select few and keep us moribund in a situation where there's no potential for growth.
Thank you.
BRADLEY: Someone right here.
QUESTIONER: Hello, Mr. President. I'm Ken Roth, from Human Rights Watch.
You spoke in your opening remarks about ASEAN as a vehicle for promoting democratic values. And I think it's safe to say that the most controversial member of ASEAN has been Burma.
Now, ASEAN has been a tool for engaging with Burma, and that's not going to change. But your predecessors as president, including your mother, all recognized the need for pressure in addition to engagement. They were all quite outspoken about Burmese abuses.
Today the new effort to ratchet up pressure is being introduced at the United Nations in an effort to create a commission of inquiry to look into the atrocities committed by the junta as a way of being clear that ASEAN and the world will not stand for those atrocities and to try to prevent them from spilling over into the future.
Is that an effort that your government would support?
AQUINO: Can I -- can I just speak on behalf of the Philippines? I just met with one of my counterparts.
With respect to the plight now of Burma, especially personified by Aung San Suu Kyi, a person my mother admired and perhaps can identify with, has been -- has merited my support in various petitions, various resolutions when I was a member of the legislature.
A few weeks ago, perhaps a month ago, I did talk to another ASEAN leader. And this guy is a freedom fighter, and he opened my eyes to the other side of the coin. And his premise went something like this:
If the junta in Burma goes, you will have so many divergent groups, you will probably have an unstable country -- for the near future. His premise was this junta is, in a sense, the stabilizing part of that. That was the first time I ever really was introduced to that concept.
I believe that any government that does not truly have the mandate of its people is actually just postponing the inevitable where conflict and national tensions will come to the forefront. And if there is instability in Burma, that affects the whole region. We will be compelled to assist in the case of people who flee, as in the case of Vietnam in the past where we became -- we became hosts for a whole lot of Vietnamese boat people.
And it behooves us to really try and help them achieve stability and a resolution of all of these tensions where the mandate of the people is not really that clear. Towards that end, we will encourage all the other members of ASEAN to revisit this engagement policy, and we will ask what is the best method of dealing with a regime that basically tells the whole world we don't care what your opinion is.
We recognize our limitations, but again, it will not stop us in trying to promote that which will bring the mandate of the people to the forefront. And be the key towards long-term stability, not only for Burma, but the rest of the region.
BRADLEY: At the Atlantic, we have a term that we use for the kind of public speaking that comes at the very end of the meeting. We call it the Elizabeth Taylor School of Public Speaking. (Laughter.)
So as Elizabeth said to each of her five successive husbands, I won't be keeping you long. (Laughter, applause.)
You've honored us by coming today. Thank you very much.
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THIS IS A RUSH TRANSCRIPT.
DAVID BRADLEY: Good afternoon. Good afternoon. Good afternoon, everyone.
On behalf of the Council on Foreign Relations, I want to welcome President Benigno Aquino III. He's the 15th president of the Republic of the Philippines. He enters today his 86th day in office. This is his first overseas trip, officially.
And we're privileged to have you here, Mr. President.
My name is David Bradley. I'm the owner of the Atlantic, in Washington, D.C.
Let me do the dispatching of the administrative details to start with. First, the order of service: I'm going to introduce the president, and the council has asked him if he would speak for about 15 minutes. Following that, we'll move directly to questions and answers. The president and I will sit up here. I'll lead off with five minutes or so of questions, and then we'll open up to everyone.
Next administrative function: Those of you who are journalists, today's conversation is on the record.
May I ask you all to turn off your cell phones and your BlackBerrys? And apparently, we need to ask you to actually turn them off, not move it to vibrate, as it interferes with the sound system if it's on vibrate.
And then, a final administrative note -- this is a note of full disclosure: I'm worried you may find my questions of the president too benign or too mild for a journalist. I was a Fulbright scholar in the Philippines in my 20s, and it is easily one of my unsurpassed years. I have nothing but abashed great -- unabashed great feelings for the country. So I don't have a "Mike Wallace question" in me. (Laughter.) That's going to have to fall to all of you.
So, I don't know that it is the greatest political narrative story in the world, but it is surely one of the greatest political narrative stories of the last hundred years: the rise of the Aquino family in Tarlac, Luzon, the Philippines. President Aquino's great-grandfather was a revolutionary general who fought in turn the Spanish and then the Americans. He was twice sentenced to death. President Aquino's grandfather, a more controversial figure, was imprisoned by the Americans.
But it was the imprisonment of his father Ninoy Aquino that thrust the family name onto the world stage. Noynoy Aquino, as he is known -- as the president is known, was 12 years old when his father was taken by the Marcos government and charged with subversion and murder. He was 17 years old when the trial finally finished and his father was sentenced to death. He was 20 years old when, in a surprise visit, Imelda Marcos showed up at the prison, had Ninoy Aquino released and placed into exile in the United States. And now-President Aquino was 23 years old when his father famously boarded Chinese Air flight 811 to return to the Philippines in protest, and he was assassinated on the tarmac on deplaning.
Everyone knows the whole -- story after that: the return of Cory Aquino to the Philippines, the election of 1986, which was stolen from her, the People Power Revolution that spilled out onto the streets of the highway, EDSA, that you'll all remember the television images of, and then the flight of the Marcos family, fleeing into the night aboard an American helicopter that had been sent from Clark Air Force Base.
What you may not know is the letter that became famous in the Philippines during the last presidential campaign, the one that President Aquino just won. This was written in 1973 by an imprisoned Ninoy Aquino to his son Noynoy, who was 13 years old at the time. I'm just going to read you a portion of the letter.
"My dear son, this afternoon I have arrived at my moment of truth. I've decided not to participate in the proceedings of the military commission assigned to take charges filed against me.
"You are still too young to grasp the full impact of my decision. Briefly, by not participating in the proceedings, I will not be represented by counsel. I will not put up any defense. I expect to be sentenced to imprisonment for the rest of my natural life, or possibly to be sent to stand before a firing squad.
"Forgive me for passing on to your young shoulders the great responsibilities of our family. I trust you will love your mother and your sisters, and lavish them with the care and protection I would have given them.
"I had hopes of introducing you to my friends, showing you the world and guiding you through the maze of survival. I'm afraid you will not -- you will now have to go it alone, without your guide.
"There's no greater nation on Earth than our motherland, no greater people than our own. Serve them with all your heart. Son, the ball is now in your hands.
"Lovingly, Dad."
This letter became a major piece of the campaign that just took place, especially that closing line, "Son, the ball is now in your hands." So running on a platform of attacking government corruption, President Aquino in a field of 10 candidates won 40 percent of the vote. It was 5 million votes more than the next candidate.
By the time of his inauguration, which was the end of June, he had an 85 percent favorable rating in Philippine polls. That's the highest favorable rating in Philippine polling history.
And Time magazine described him -- here I'm quoting -- as of "Gandhian simplicity and uprightness."
For those of us who have trouble summoning an 85 percent approval rate in our nuclear families -- (laughter) -- this is as good as life ever becomes. I don't know how you can do better than your start in office, but it is a remarkable start. So join me in welcoming the president of the Philippines. (Applause.)
PRESIDENT BENIGNO S. AQUINO III: Thank you. Thank you, Mr. Bradley, for those very inspiring words. It reminds me that my father's looking at us right now. And if I fail to live up to his expectations, I might wind up on the floor in a little while. (Soft laughter.)
(Dr. Haass ?), distinguished members of the Council on Foreign Relations, members of my delegation, ladies and gentlemen, good afternoon. Thank you for the warm welcome and kind introduction. I appreciate this great opportunity to engage you in a conversation about the Philippines. I am here to share with you the aspirations of close to 100 million Filipinos that I represent.
Today, I took my oath -- my oath of office as president. I vowed to our people that I will dedicate my life to making our democracy reach its fullest potential, that of ensuring equal opportunity for all.
In an essay he wrote in 1968 for Foreign Affairs, my father lamented, and I quote, "that the blessings of liberty have not included liberation from poverty, and that there are great disparities and chronic inequities of Philippine society." His words still remain true today.
I was put into office by the people who believed in my idea that corruption is the root of poverty; that an end to corruption would mean an end to poverty. My government is ready to deliver on the second part of this pledge. We will channel any gains into the people through social services like education, health and conditional cash transfers that serve both as life vests for the poorest of the poor and incentives to ensure that they can move forward in life by getting educated and staying healthy.
My government's mantra is to guarantee a more equitable distribution of our nation's resources. This can only be achieved through stronger economic growth, investments -- (very ?) needed in social services. But they are also necessary in infrastructure, utilities and job-generating enterprises.
Given the scarce resources that we have, attracting foreign capital has become a vital component of my anti-poverty program. And I am here today to tell you that my government is doing what it takes to create a more investor-friendly environment. Part of my mandate is to curb corruption and streamline a cumbersome, graft-ridden bureaucracy, to put resources where they will provide the clearest results, and to untangle a complicated regulatory environment.
The mission I have set out for myself is to lead by example, rally our people and unite them behind a common sense of purpose. It is imperative for us to work hand in glove and persevere in creating a just society for all. I have laid out the tenets that will mark the new Philippines: good governance, employment generation, quality education, improved public health, and a home for every family within safe communities.
Even as we exert our best to create jobs at home, the immediate reality is that many of my compatriots continue to seek greener pastures abroad. This makes them vulnerable to human traffickers and illegal recruiters. We are thus doubling our efforts to bring the full force of the law against those who prey on the vulnerable.
We have committed to restore integrity in leadership and governance. We will battle corruption, cut red tape and exact the highest standards of performance from our bureaucracy. The government must earn the full trust and confidence of its citizens. This trust and confidence is the motive force that would get them actively involved in building and rebuilding our nation. By empowering the people and nurturing democratic participation, we can truly bring about real reforms.
Ladies and gentlemen, I came here to declare that the Philippines is open for business under new management. Today I invite you to take part in the transformation of the Philippines. We are striving in earnest to build a government where everything works and pursue programs for our economic take-off.
The forging of private-public partnerships, or PPPs, would be our main engine in revving up our economy. We will enlist the participation of the private sector, both domestic and foreign, in big-ticket, capital-intensive infrastructure projects, while ensuring reasonable returns. We shall officially launch the PPPs this October. An initial list of 10 PPP projects worth $4.5 billion is already being developed. We look forward to the participation of the U.S. investors, specifically as we open up our infrastructure sector for foreign participation.
There is no better time than now to bank on the Philippines and lay the groundwork for future long-term business and economic success. The global economic recovery, growth in international trade and overall as improved levels of confidence, have already borne fruit. In the first half of 2010, the Philippine economy showed robust growth of 7.8 percent and 7.9 percent. Full-year GDP growth will likely reach the upper end of the 5 to 6 percent -- percentile target. Perhaps, we hope, we can even reach higher.
There was a return of the bulls to our local stock market. Trading has reached fever pitch, and foreign funds are streaming our way. There was a net inflow of $128 million in foreign direct investments in June of 2010, as compared to the previous month's net outflow. Since the end of June, when I was inaugurated president, 754.55 billion pesos in wealth was created, when measured by the increase in domestic market capitalization.
For the first time, the Philippines was also able to raise $1 billion through the sale of a peso-denominated global bond. This bond issuance generated high investor interest from across the globe, from Asia, Europe and the United States.
Financial analysts point to good governance and market-driven economic growth as the impetus for this investor confidence. Our doors are wide open for investors, particularly in tourism, business process outsourcing, mining, electronics, housing and agricultural sectors.
Tourism is a crucial industry that could employ millions of Filipinos, skilled and unskilled alike, cross those 7,107 islands of the Philippines. (Coughs.) Excuse me.
From the current projection of 3.3 million tourist arrivals in 2010, our aim is to eventually attract 6 million tourists. In the process, we expect to create 3 million jobs in the next six years.
BPO continues to be a sunrise industry in the Philippines. From virtually nothing 10 years ago, this sector has grown into a $7.2 billion industry, employing 450,000 people. Today the Philippines has the second-biggest BPO industry in the world, next only to India, and growth forecast remains very encouraging on the long term.
The Philippines has vast minerals that are still untapped. It has one of the world's largest deposits of gold, nickel, copper and chromite. Through responsible mining, we intend to generate more revenues from the extraction of these resources.
If we succeed in getting the support of foreign and local investors for our PPP programs, we will have money to spend for the delivery of much-needed social services across the country. As we strengthen our economic infrastructure, we will also create the peaceful and stable environment necessary for economic growth.
I offered -- (clears throat) -- excuse me -- I have offered a place at the table for everyone who wants to talk about peace, to unite our country and bring the disillusioned and the disenfranchised who have chosen the violent path back into our -- excuse me -- back into our democratic mainstream. My administration's compact with the Filipino people will demand no less than the attainment of lasting peace and equitable prosperity. We will employ all the tools at our disposal to achieve this.
The Philippine relations with the United States are vital. The special ties that exist between us, our security allies and development partners serve as a steady anchor in American engagement towards the Asia-Pacific. The earlier, colonial patron-client relationship has evolved through the years into modern, mature and mutually beneficial relations.
Our economic relations are robust. The United States is among our leading trade partners. It ranks as our largest export market and second-largest supplier. About 18 percent of total Philippine exports were bound for the U.S. and approximately 12 percent of our imports were sought from America last year. The U.S. has also been traditionally the Philippines' largest foreign investor, mostly in the manufacturing sector.
We are now advocating for the passage of a bill pending in the U.S. Congress known as the Save our Industries Act, or the Save Act. If signed into law, it would give duty-free breaks for Philippine garment exports to the U.S. which were processed from U.S.-made fabrics. It will also give reduced tariffs on those that use U.S.-made yarns. This is a win-win proposition for both the U.S. and the Philippines. It will reinvigorate both the U.S. textile industry and our garments industry, and create jobs on both sides of the Pacific.
During my visit here I particularly look forward to our signing of the Millennium Challenge compact agreement. This is a vote of confidence on our commitment to reduce poverty, generate revenues through our tough campaign against graft and corruption, and to modernize our infrastructure.
As you may know, the Millennium Challenge Corporation, or MCC, awards grants only to countries which rule justly, promote economic freedom, and invest in their people.
With keen interest we note the Obama administration's focus in negotiating a regional Asia-Pacific trade agreement known as the Trans-Pacific Partnership Agreement. Envisioned as a platform for economic integration across the region, the TPP countries would be in the best place to become the region's leading hub for trade investment and growth.
The Philippines aims to engage the U.S. in a joint trade initiative that would serve as mutual building blocks for our eventual participation in the Trans-Pacific Partnership. Just like other ASEAN member states, the Philippines is already positioning itself as a viable member of the Trans-Pacific Partnership.
We seek U.S. support for this, as we recognize its leadership role as host of the APEC in 2011.
In regional affairs, the Philippines has been a dynamic player, especially in ASEAN. From a small grouping of 10 nations, ASEAN has now emerged as the nucleus of regional dialogue and cooperation.
The ASEAN charter was adopted in December 2008 that conferred leader status to the organization and laid down a clear road map towards building an ASEAN community by 2015.
A Philippine initiative was the inclusion of a provision in the charter calling for the establishment of a human rights body called the ASEAN Intergovernmental Commission on Human Rights. Still in its incipient stage, this body stands much to gain from U.S. partnership in capacity building. For its part, the Philippines stands by its offer to host its secretariat.
On human rights protection and promotion, we look forward to greater cooperation with the U.S. as the Philippines, once again, endeavors to be the citadel for human rights, democracy and good governance in our own region. Right now the Philippines is a nexus for the ASEAN-U.S. relations as country coordinator.
Fulfilling this mandate has been -- benefited by the renewed interest of the U.S. in Southeast Asia. President Obama's vow in 2009 to be a Pacific president generated excitement in our region. Prior to this, most countries in the region felt that they had become mere blips in the American radar screen as Washington, D.C., focused on the Middle East, particularly on Iraq.
Perhaps the strongest signal of reengagement with Southeast Asia was the U.S.'s accession to the Southeast Asian Treaty of Amity and Cooperation. President Obama was also the first American president to meet with ASEAN leaders in the first ASEAN-U.S. summit in Singapore of last year. These augur well for a broadening and deepening of ASEAN-U.S. interactions at an accelerated pace.
Our second ASEAN-U.S. summit tomorrow will reinforce this new era of ASEAN-U.S. relations. The U.S. is a major trading partner of ASEAN. ASEAN, in turn, has been one of the fastest-growing export markets and host of U.S. investments.
The Philippines would like to see the enhanced implementation of the ASEAN-U.S. Trade and Investment Framework Arrangement. An economically viable and strong ASEAN facilitates stability and prosperity, and the TIFA is a vital tool for economic growth, job creation and improved welfare of our peoples.
Connectivity has become another buzzword in ASEAN in past year. We expect the master plan on ASEAN connectivity to be ready by the ASEAN summit next month. Three key elements characterize our connectivity master plan: physical connectivity, referring to transport connectivity; institutional connectivity, referring to trade and investment liberalization; and people-to-people connectivity, referring to tourism, education and cultural exchange.
You will note that these three elements of connectivity point to the economic, political, security and socio-cultural goals of ASEAN community building. Given its unique geographic locations, the Philippines in particular look forward to the development of a nautical highway to ensure that we remain connected to our neighbors in the region. Forging public-private partnerships will make the connectivity in ASEAN a reality, and we look forward to the strong support of the U.S. for this initiative.
At the ASEAN ministerial meeting and ASEAN regional forum in Hanoi last July, the South China Sea issue was discussed. The Philippines welcomed State Secretary -- Secretary of State, rather -- Hillary Clinton's statement to the forum that, while the U.S. takes no sides in the dispute in the South China Sea, that claimant states should resolve their disputes through a collaborative diplomatic process and in accordance with international law.
The Philippines and the U.S. share the need to maintain unimpeded maritime commerce and navigation. The Philippines believes that it is in the best interests of the region to transform this potential flash point into a zone of peace, friendship, freedom and cooperation through sustained consultation and dialogue.
A most pressing phenomenon that confronts and threatens humankind today is climate change. The Philippines has a very negligible carbon footprint. It produces only one-third of 1 percent of the global greenhouse gases. Yet it is in the U.N.'s roster of top 12 countries most vulnerable to climate change.
Two devastating typhoons hit us last year and damage to our crops and property was equivalent to 2.7 percent of our gross domestic product. That is why in climate change negotiations we have been calling for deep and early cuts in the greenhouse gas emissions of developed countries. We urge them to support the developing countries in terms of financing, technology transfer and capacity building for climate change mitigation and adaptation efforts as a form of restitution or climate justice.
The Philippines has a renewable energy act. It is a legal framework for the harnessing of our renewable sources of energy, including foreign investments, and we invite U.S. involvement in this program. We also appreciate the USAID's promotion of clean energy technologies in the Philippines -- modest beginnings for our goals towards green growth and green economy.
The world looks up to the U.S. leadership in climate-change negotiations and in putting in place an international framework on climate change. Still, within the auspices of the United Nations, the Philippines steered the crucial negotiations of the 2010 review conference of the Nuclear Nonproliferation Treaty last May here in New York.
As president of that conference, the Philippines helped revive the moribund NPT. It helped garner consensus towards a comprehensive approach to nuclear disarmament, nuclear nonproliferation, and the peaceful uses of nuclear energy. After a month-long intensive negotiation, a 64-point action plan was adopted. This was both historic and unprecedented. More daunting challenges lie ahead.
The Philippines and ASEAN will continue to stress the importance of the Southeast Asian Nuclear Weapons-Free Zone Treaty in preserving peace and security in the region. We strongly urge the nuclear-weapon states to accede to its protocol.
We laud the U.S.'s own disarmament efforts. We are encouraged by the success of the U.S.-Russia START talks this year on the reduction of their nuclear arsenals. The holding of the Nuclear Security Summit in Washington, D.C., in April also provided a favorable environment for the success on the NPT review conference.
This year is the International Year of Diversity. The Philippines hosts the ASEAN Center for Biodiversity, and is a founding member of the Coral Triangle Initiative, along with Indonesia, Malaysia, Timor Leste, Papua New Guinea and the Solomon Islands -- a triangle which is home to 75 percent of all known coral species, 3,000 species of fish, including tuna and other marine resources. With a high level of biodiversity, the Philippines is among 18 mega-diverse countries.
The Philippines is of the view that development and poverty alleviation are benefits derived from biodiversity. For this reason, the Philippines is committed to biodiversity conservation and to the attainment of the objectives of the Convention on Biological Diversity.
The most important role of the U.N. is the effective discharge of its peacekeeping function. The Philippines is proudly taking part in that role. We have sent more than 1,000 military and police personnel to most of the U.N. peacekeeping missions, specifically in Haiti; Darfur, Sudan; Timor Leste; Liberia and the Cote d'Ivoire.
At the Golan Heights, the U.N. is preventing possible clashes between Israel and Syria. Leading the U.N. disengagement observer force is a Filipino general. A third of the U.N. force in the Golan Heights are Filipino peacekeepers.
Peace in the Middle East is of prime importance to the Philippines, due to the presence of around 2 million of our countrymen working in that region. We note the commitment and personal leadership of President Obama in the Middle East peace process, and wish him success in this endeavor. We are satisfied that there is now a clear recognition of the interlocking linkage between peacekeeping and peacebuilding towards lasting peace, security and development.
In closing, allow me to share with you President Obama's observation about the Philippines. He said, and I quote, "The Philippines punches above its weight in the international arena," close quote. Indeed, we have high aspirations in our foreign relations.
We believe that in the increasingly globalized and interdependent world, national goals and objectives are served by partnerships and collaboration with friends abroad. Our engagements with the rest of the world will always be at the service of our aspiration to build a vibrant nation.
Thank you for your patience, and good afternoon to all. (Applause.)
Thank you.
BRADLEY: Well, Mr. President, congratulations on your election.
AQUINO: Thank you.
BRADLEY: Let me start with a general question. Right after John Kennedy had been elected president, maybe a few months into his term, he was asked the question, so now you're president. How's the country different than you expected it to be?
And Kennedy said, well, when we were campaigning we were talking about what terrible shape the United States was in. And he said, the large surprise, now that we're governing, is everything we said was true. (Laughter.)
So roll back to when you were campaigning. And you had a privileged view of the state of the Philippines, but not the view that you now have. What do you know now that you didn't know when you became president? How's the country doing?
AQUINO: Well, when we started out, during the campaign, we knew that we were in a bad shape. When we got into office, we realized that our estimate was on the optimistic side. (Scattered laughter.)
BRADLEY: Mm-hmm. (In acknowledgement.)
AQUINO: But the pleasant surprise is in spite. For instance, we were supposed to go work for half of the year in 2010. We were left to -- (inaudible) -- about 10 percent of the national budget to spend on the last half of the year.
But the surprising thing is -- look at the numbers that you were quoting earlier, be it the stock market, be it the global (trust ?) bond offer -- very, very successful. But more importantly, our Department of Budget and Management has just informed us that through good governance, improved expenditures, we have actually had a surplus in the second half -- or the second month that we have been in office. That obviously was not expected.
We were -- all our focus has been on controlling the deficit and making sure that our ratings with the various credit agencies will -- credit rating agencies -- will not suffer more, to make our borrowings even that much more expensive to cover deficits. But again, in the past month alone there has been so much good news, you know?
Basically what we thought was the timetable for fixing all of our problems seems to be accelerating, and we hope to continue in that trend. And when I get back home, there's just really a mountain of good news that I'll be bringing back home to our people.
BRADLEY: You mentioned the word "surplus." We in the United States don't know the meaning of that word. So afterwards maybe you could stay back with us and -- (laughter).
You campaigned on a platform of attacking corruption. Give us a sense of just how big a problem this is.
AQUINO: Okay, let me give you one concrete example. We were meeting with the World Bank, I think it was yesterday. They had funded a series of road projects, and they believed that there was collusion amongst the various contractors. There were favored contractors. And they subsequently banned, if memory serves me right, about 10 of these contractors from any World Bank-funded project.
Now, the DPWH, our Department of Public Works and Highways, in control of these projects, subsequently banned the same, but they banned them only from projects that are World Bank-funded. So they were favored again for items apart from that budget. So without any investigations that exonerated them from the charges, they continued in their merry ways, making them that much favored.
I'll give you another example. We had a fertilizer scam in 2004, discovered by a commission and audit in 2008. The project was meant to give farm inputs, be it seeds, be it fertilizers, et cetera, to assist all of our farmers and increase their incomes.
Now, the fertilizers that were purchased were not appropriate for rice, they were exorbitantly overpriced, and at the end of the day most of it was never delivered. So the wrong fertilizer, that was charged at least 300 percent in most instances overpriced, was never even actually delivered.
So our ombudsman, who is tasked with investigating instances of corruption, amongst other things, by government entities, proceeded to investigate that incident four years after it transpired. And in the process, one of the witnesses or maybe a vital witness to that had already died. So even at this stage, no charges have been proffered amongst government officials involved in that program.
And in -- I think it was in 2005 that they had a repeat of this program and the scam nature of it, and perhaps in a slightly lower category. So this is -- and it goes up and down -- (chuckles) -- the chains of government. And that's precisely what we're trying to fight at this point in time.
Now, that fills us also with a sense of urgency, because our judicial system also needs to be really reformed. We have on average about a 14 percent conviction rate, compared to your 80 percent here, compared to 95 percent in Japan. When it comes to cases involving drugs, it becomes even a worse situation: -- 1 percent of conviction. So there are a lot of criminals in our country who are not convinced that they will ever see a day in jail.
So we are working tremendously on that, but the knowledge base was done in 2000, and in 2010 we have already taken steps, finally, to start addressing that problem.
BRADLEY: In an earlier government, not your own, corruption ran all the way to the level of ministers. And presumably those governments were speaking -- weren't making attempts to limit corruption.
What is your sense of what went wrong in the early attempts and what can you do here that's more rigorous than what's been done before?
AQUINO: Well, first of all, the administration that we succeeded had a questioned mandate. The questioned mandate necessitated it favoring a lot of what they perceived as institutions that supported their continued stay in power. So you see it in the Maguindanao massacre; you see it in the delayed investigations of the ministers involved in the fertilizer scam.
Bottom line is any decision that the previous administration had to do always had political considerations, okay? So in our case, we have -- we don't have to rely on the support pillars. We have the people that actually mounted the campaign, came up with all the paraphernalia, became our watchers and inspectors during the whole process of elections and all constantly are there reminding us of our functions as our main support pillar.
So conscious of that, conscious of the fact that we have six years in which to effect all of the necessary changes, we think that we are not constrained by the same political realities of a person running for reelection. We are not constrained by owing just a few selected individuals the logistics for mounting the campaign.
So we have therefore that freedom to try and please most, if not all, of the Filipinos in terms of delivering our promises for good governance. That frees us from all the usual obligations. That empowers us, in turn, to really go after and deliver -- (inaudible) -- for all of these people that have really done so much harm for our countrymen, and really fulfill our promises to those that aspired and joined us in this dream of really transforming our society.
BRADLEY: Let me move to a different topic.
It's hard to have a meeting at the Council on Foreign Relations without having the subject of the rise of China and the relative decline of the United States come up. How do you see China changing in its relations with the Philippines? How present is it? How significant is it?
AQUINO: Well, they -- in terms of what we call the Greater China -- Taiwan, Hong Kong and the People's Republic, the mainland -- they are already -- (inaudible) -- trade, I understand, with the United States.
BRADLEY: So they will be your number-one trading partner in a -- within a matter of a few years?
AQUINO: If things go the same way as it has been. But they have engaged us in really being very friendly. When I was a kid, and whenever you'd think about mainland China and its leaders, they seemed to be aloof, you know? About that much distant, that unattainable. But their embassy, their ambassador has really been quite effective in doing away with that imagery.
Again, let me reiterate it seems that they are really interested in forging very good relations with us, and that goes hand in hand also with our philosophy. They are, of course, a major superpower. We don't even have a single fighter jet in our air force, fighters as a warplane. We have trainers for it.
Really, we are subscribing to the theory that there is prosperity for everybody; it would be in everybody's interest to actually continue the status quo, rather than have flash points that will lead to belligerency and possible altercations that we can't -- we have no hope of winning.
BRADLEY: So is it fair to say that in conversations with your fellow ASEAN leaders there's not a particular concern about the way China is evolving?
AQUINO: I've only had one conversation with my ASEAN counterparts, and I'll be in a series of them tomorrow. And I guess, though, I've spoken is that, you know, there is a brother in region, but he happens to be the biggest brother on the block, you know? (Laughter.)
And we have -- we have competing interests in the Spratly Island groups. One has to -- hopefully, we don't have to hear the phrase "South China Sea" with reference to it being their sea.
BRADLEY: Mmm. (In acknowledgement.)
AQUINO: So far we have not had manifestations that they intend to push us around. But in case that happens, we have -- I think ASEAN has demonstrated that we would stand as a bloc.
BRADLEY: Does the United States feel like it is gradually retreating from the region, or do you feel a greater and greater presence?
AQUINO: In the past few weeks I think the presence of your ballistic missile submarines surfacing in so many ports around the Pacific -- Manila just had the visit by your aircraft carrier George Washington, if I'm not mistaken.
So I think this president has reiterated we are still around, that we can count on the treaties that we have signed with your government for a very long time. And that also I think augurs well for maintaining cordial relations with each other.
BRADLEY: Let me ask you one more question, then we'll open it up here.
The insurgency in the south in this chapter has been going on since the 1970s. Give us the state of the union there. How many, you know, armed insurgents are there? Is it waxing; is it waning?
AQUINO: Well, lately the primary Muslim secessionist group is the Moro Islamic Liberation Front. And the militia, who is a third party in negotiations with the MILF, has indicated intense support for resolving this issue in the shortest time possible. The foreign minister told me that they are focusing on efforts to try and do it within my term.
And lately the MILF has really been trying to discipline its errant members. They've demonstrated that. We are also heartened by the fact that they have, in a sense, toned down their demand from the previous regime. When there were talks previously, they needed solutions that went beyond the ambit of our constitution. Now it seems that to a large degree it will be within the ambit of our constitution, but that makes it even easier to come to terms with them.
So we are very hopeful. We have formed our negotiating panel. We have agreed on the head of the observer group. We -- and when I get home I expect to have -- to be told of the actual date of when the resumption of the peace talks will be.
So if that happens, you would have groups like the Abu Sayyaf deprived of a friendly bases. They will become more and more marginalized and we will have more and more peace in Mindanao. Which, then, will cease to become the land of promise, and become the land of promises realized.
BRADLEY: Let's open it up for questions. May I ask you to follow the Council protocol when we do this, which is to wait for the microphone so we can get it on the record, and then if you would keep your questions to one, and the finally, please identify yourself and your organization.
QUESTIONER: I'm Lucy Komisar. I am a journalist. I speak as somebody who was in Manila during the People Power Revolution in 1986 and then wrote a book about your mother.
It's one of the issues that made me get interested in the whole offshore corruption question, because people told me that Marcos had stolen -- looted the country and put his money in Switzerland.
I'm wondering what you're doing to finally find this, because I understand that one of your agencies has done a report that showed how the money was moved to Liechtenstein and it knows where the money went, about the accounts. And then the investigation just seems to have stopped.
Are you doing anything to find out what happened to what is probably billions of dollars that Marcos may have stolen and might now be hidden, because people afterwards got some of that (cash/cache ?)?
AQUINO: My mother set up a commission called the Presidential Commission on Good Government. I think it was her first -- first order, the very first order of business. And in fairness, it has recovered somewhat in the neighborhoods of about $10 billion to date.
Now, the problem starts with the fact that Mr. Marcos was probably the only person who knew where everything went. And so it's in -- (inaudible) -- depository countries. There were several properties in America and in various other countries.
We have nominated new people to the Presidential Commission on Good Government. The last one had an advocacy only of coming to a splitting of the proceeds between the heirs of Mr. Marcos and government as its main proposal in resolving the issue.
Again, we -- this new -- this new set of commissioners, headed by Dean Andy Bautista, we expect will accelerate the process of our regaining this lost wealth and the interests earned in roughly about 24 years of trying to get -- (inaudible). We don't guarantee perfect results, but intense efforts now will really be done towards recovery of the same.
BRADLEY: Over here, please.
QUESTIONER: Good morning. I'm Antonia Taquifa (ph). I'm currently a visiting scholar at Columbia University Weatherhead Station -- Weatherhead Center of East-West Relations.
And my question is about industrial policy. For the -- for the past two decades, the Philippines has -- the biggest earner of the Philippines has been export labor. And more recently that has been augmented by the spread of call centers, so that what we have right now is actually the start of de-industrialization, according to a lot of, like, the best Philippine economists.
I was wondering if your government has any real, like -- how do you plan to address the fact that there's a need to develop a domestic manufacturing sector, or do you have a plan for that?
AQUINO: There is a plan, but unfortunately we -- (inaudible) -- everything so many (givens ?). Amongst them, power, electricity, in particular. The Philippines has one of the highest rates, sometimes equal to and sometimes greater than that of Japan. And that obviously is a serious hindrance towards revitalizing the manufacturing sector.
That energy situation's being currently addressed. One of the -- one of the meetings I had with a business group had to deal with the provision of a new 600-megawatt facility in Luzon. There are others that we are -- we're trying to push them also in Mindanao. And once -- and there are various tweaks that will be done towards the whole pricing structure and the local -- (inaudible) -- electrical power industry called the P-NOC.
Once all of those are in place we -- we will be bringing down the price of electricity, and hopefully that will -- that will be a boost to manufacturing efforts.
Amongst -- and I'm kind of inhibited to tell you all of the companies that we've talked to so far and the rest of the (operations ?) we'll be talking to later. But manufacturing, the -- there are new investors who will be coming to manufacture various items.
The campaign amongst our Phil-Ams here in America to join us in the campaign to lobby for the Safe Act will in time, four years or so, if it's successful, be able to get us back to the levels of those who were in the garment industry just a few years back. We're down to about 180,000 now from a peak of about 700 (thousand), 800,000 then. In four or five years we might get 580,000 back into the sector. And as you know, those will really induce further growth.
So far the drivers for our economy have to really rely on the business processing outsourcing; tourism, to include medical tourism; agriculture; and mining. But of course my personal dream is to get back that manufacturing aspect.
When you -- when you take a bath and the soap you use is imported from Thailand, amongst other countries, then you wonder how such a low-tech product can't be produced in your own country. So as I said, it's really coming from national pride. That has to also be readdressed.
BRADLEY: Is there a question over here, please, in the orange? Yes.
QUESTIONER: Thank you. I'm Minky Worden from Human Rights Watch.
President Aquino, in your inaugural address you promised to attempt to bring justice for victims of serious human rights abuses, yet hundreds of extra-judicial killings and disappearances have so far gone unprosecuted, except for a handful.
You mentioned that criminals may have a feeling that they will never see a jail cell, and I think some human rights abusers may have the same feeling. What's your government doing -- what steps is it taking to accelerate the process for justice and accountability?
AQUINO: In the first -- accountability, the killings have been with a sense of security. Nobody will ever be brought before the bars of justice and that they can go on their merry way.
But in the first three weeks of our administration there were six killings that could be characterized as extra-legal. Of the six, three of them have already been solved in the third week. And of that, charges have been proffered on all of these three cases. We have in custody several of the assailants.
And may I add that we have a problem with the insurgency. One of them -- not one of these extra-legal killings is supposed to have been done -- and one of the supervisors, they advised the family of the deceased not to cooperate with government. But in spite of that, we did bring them -- (inaudible) -- and the process is undergoing trial.
This is not a matter of state policy, especially under our regime. My father obviously is the reminder that this constant of what was done when a government set up by the people suddenly turns on the people.
As I mentioned in my -- well, other -- (inaudible) -- I'm sorry. I have had so many meetings. I hope I mentioned the idea of judicial reform, though. And judicial reform really is the fourth plank in our platform.
When you don't have really a sense of certainty of punishment, then your peace-and-order situation deteriorates. (Inaudible) -- I got the former chair of the commission on human rights to head their justice department. She is a very driven individual, and she can be counted upon to really deliver in securing all of the convictions necessary to put an end, or at the very least, to mete out the right punishment to people who have transgressed our laws.
So when I talk to our security forces, I keep emphasizing there are greater demands on you, because you cannot deteriorate to the same level as those who are -- that have become outlaws or are outside the (street ?). This is a portion of winning the hearts and minds. It is an investment in ensuring that we deprive these insurgents from their base of support that the people will give them if we are not any different from those that we are fighting.
So towards that end, you know, a parameter of appointment should always -- you know, for especially promotions, has to be an absence of a human rights abuse record in the appointment of various officers.
BRADLEY: With the card up here.
QUESTIONER: Welcome, Mr. President. I'm Jamie Metzl from the Asia Society.
I think everybody, both within the Philippines and outside, is thrilled by your government's commitment to stamping out corruption, which is a scourge that has -- and the Philippines has suffered as a result.
But many of us who are observers of the Philippines also at least observe that there are some deeply structural issues in the Philippines that at least fuel some of the inequality and injustice and also corruption. And foremost among those, it seems, is the maintenance of a at least semi-feudal structure of overall society in the Philippines that is something more akin to Pakistan than to maybe some of -- other countries across the region.
And my question to you is do you accept that characterization of the Philippines, and if so, what is and can your government do to address these deeply structural issues?
AQUINO: One of the current issues that has been brought up by the Philippine Senate has been our emphasis on conditional cash transfers in the budget. They say that these handouts are not the solution and we should go back to the traditional methods of having -- rely on trickle-down economics as the key towards uplifting the lot of our people.
We are of the opinion that we have something like 4.6 million families severely under the poverty line. And if we are not able to help them get even the basics and also at the same time ensure that they keep their students in school and also receive the proper inoculations for monitoring various health conditions, they will forever be a drain on society and the problem just gets on getting worse rather than being solved. They cannot rely, I guess. And what I'm trying to say is -- you cannot rely on the traditional beliefs of the benefits of a growing economy eventually trickling down.
So one might say that that might not be characteristic of a feudal setup, but rather a socialistic setup. And I've been called socialistic and communist at times in my life, you know? But again, it -- I think most of us subscribe to a -- pragmatically, because a lot of us are Christians, and we are responsible for our brothers. That's where it comes from.
Now, we're -- how are we able to do that? Because there is a lot of interest in the private sector for major infrastructure projects so necessary that frees the budget for all of these social concerns. The emphasis on items that will empower the people -- micro finance, for instance; provision of more scholarships -- is, I think, proof that we do not want to maintain relationships or structures of institutions that say certain Filipinos have X rights and other Filipinos have X plus Y rights.
We have gone after what were considered perhaps sacred cows in terms of our fight against tax evasion. One of the first -- the very first individual that -- so charged was -- did not find that -- posted returns that said he had no income for 12 years, but also managed to buy a Lamborghini vehicle in the same period, you know? (Scattered laughter.)
Before, he was not even -- he was not even called to account for his actions. He was the first. Our Bureau of Internal Revenue files cases against these major tax evaders every other week. In between, the Bureau of Customs files cases against smugglers. So to date we have already filed at least several for -- against smugglers, several against tax evaders.
Our biggest businessman (at home ?) received one promise from me during the campaign: We promise you that you will have a level playing field. When you are -- when President Marcos, I guess, started the crony capitalism issue, if there is one favorite, this entity does not become competitive. There's no inducement for him to become competitive.
When we have to open up our doors to global trade, we could not compete because this guy has been subsidized and sheltered for such a long time. But we will promise you the government will help -- no, will assist you, becomes your partner, does not seek to make you a milking cow, but rather as a -- we'll provide the milieu whereby you can prosper and rise to the levels of your competitiveness. That in turn hopefully will be the long -- the parting of the seas for the long-term strategy of our ability to compete globally.
So I cannot subscribe to the idea that we will retain our privileges for a select few and keep us moribund in a situation where there's no potential for growth.
Thank you.
BRADLEY: Someone right here.
QUESTIONER: Hello, Mr. President. I'm Ken Roth, from Human Rights Watch.
You spoke in your opening remarks about ASEAN as a vehicle for promoting democratic values. And I think it's safe to say that the most controversial member of ASEAN has been Burma.
Now, ASEAN has been a tool for engaging with Burma, and that's not going to change. But your predecessors as president, including your mother, all recognized the need for pressure in addition to engagement. They were all quite outspoken about Burmese abuses.
Today the new effort to ratchet up pressure is being introduced at the United Nations in an effort to create a commission of inquiry to look into the atrocities committed by the junta as a way of being clear that ASEAN and the world will not stand for those atrocities and to try to prevent them from spilling over into the future.
Is that an effort that your government would support?
AQUINO: Can I -- can I just speak on behalf of the Philippines? I just met with one of my counterparts.
With respect to the plight now of Burma, especially personified by Aung San Suu Kyi, a person my mother admired and perhaps can identify with, has been -- has merited my support in various petitions, various resolutions when I was a member of the legislature.
A few weeks ago, perhaps a month ago, I did talk to another ASEAN leader. And this guy is a freedom fighter, and he opened my eyes to the other side of the coin. And his premise went something like this:
If the junta in Burma goes, you will have so many divergent groups, you will probably have an unstable country -- for the near future. His premise was this junta is, in a sense, the stabilizing part of that. That was the first time I ever really was introduced to that concept.
I believe that any government that does not truly have the mandate of its people is actually just postponing the inevitable where conflict and national tensions will come to the forefront. And if there is instability in Burma, that affects the whole region. We will be compelled to assist in the case of people who flee, as in the case of Vietnam in the past where we became -- we became hosts for a whole lot of Vietnamese boat people.
And it behooves us to really try and help them achieve stability and a resolution of all of these tensions where the mandate of the people is not really that clear. Towards that end, we will encourage all the other members of ASEAN to revisit this engagement policy, and we will ask what is the best method of dealing with a regime that basically tells the whole world we don't care what your opinion is.
We recognize our limitations, but again, it will not stop us in trying to promote that which will bring the mandate of the people to the forefront. And be the key towards long-term stability, not only for Burma, but the rest of the region.
BRADLEY: At the Atlantic, we have a term that we use for the kind of public speaking that comes at the very end of the meeting. We call it the Elizabeth Taylor School of Public Speaking. (Laughter.)
So as Elizabeth said to each of her five successive husbands, I won't be keeping you long. (Laughter, applause.)
You've honored us by coming today. Thank you very much.
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THIS IS A RUSH TRANSCRIPT.
Event
with Benigno Aquino III and David G. Bradley
September 23, 2010
Council of Councils
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