Private Sector Leaders,
Ladies and Gentlemen,
I am pleased to be in the Philippines and appreciate this opportunity to meet with such a distinguished group. Many thanks to the members and guests of the Makati Business Club and the Management Association of the Philippines for hosting this wonderful luncheon and discussion. I admire your commitment to your country.
I came to the Philippines to assess for myself how the U.S. Government’s $434 million grant through the Millennium Challenge Corporation is progressing. My trip has been very brief, but also very productive. I am proud of the progress being made.
- I see your fellow citizens being empowered to help themselves through the Kalahi-CIDSS community development projects we are funding. This week I had the opportunity to inaugurate several of these projects in Leyte and Samar and witness the strong local involvement and commitment to their success.
- I see this in the road that we are building in Samar, which will become a highway for greater commerce and trade. And, it was an honor to be at the groundbreaking for construction yesterday.
- I see this in the reforms underway at the Bureau of Internal Revenue, which will reduce opportunities for corruption and ensure a more efficient and fair tax collection system. This will allow the government to continue investing in the infrastructure of your country—as well as in the health and education of your fellow citizens. This will help make the Philippines more competitive in the region and better able to attract foreign investment, which is key to economic growth.
In short, I am pleased that MCC’s investment in the Philippines is creating a solid foundation for the future.
And, MCC's investment complements what is already unfolding here in the Philippines under the leadership of President Aquino and his very able secretaries--many of whom are here today. We see strong, honest and courageous leaders, who are propelling this country's economy to the next level.
- We see an economy forecasted to grow at 6 percent ... better than my own country!
- We saw the budget deficit shrink by 37 percent last year.
- We saw a significant jump in competitiveness, with the Philippines moving up 20 places from 85th to 65th place.
- We see a commitment to a stable and level playing field where outcomes are predictable and good governance is the norm.
By making the tough policy changes, this administration is putting the country firmly on the path to growth.
MCC, after all, has one mission: To reduce poverty through economic growth. I believe you know that an important link exists between poverty reduction and economic growth. The efficient mobilization and allocation of capital drives a sustained increase in real per capita GDP—in a country’s growth rate. As private sector leaders, I know you appreciate the effective use of capital.
At MCC, we too believe in aid effectiveness. It is more than just doing “good things” in the short-term to uplift the lives of the poor. It is measuring the tangible benefits society gains over the long-term compared to the opportunity cost of those benefits.
As we think about these important issues of sustainability, we also recognize that no amount of development assistance can sustain growth unless the private sector is involved.
I know this for a fact. I spent nearly 30 years of my career in the private sector before accepting the call to public service in the U.S. Government. So, I recognize and appreciate the tremendous role you—the business community—play in economic growth and prosperity.
- You create jobs.
- You are the engine of innovation.
- You come up with new products and services.
- You drive growth.And, you pay taxes!
So, it makes all the sense in the world that MCC and the private sector are natural allies. MCC and the private sector are “fellow travelers” on the road to economic prosperity. That is why it is a priority for MCC—and my personal priority—to partner with the private sector. And, we are doing this in concrete ways.
At every level of our operations, we look for ways to work with the private sector. When we first partner with countries to analyze their constraints to economic growth, we want to hear what the private sector has to say about this. As we design and develop compacts for funding, we want the private sector involved. And, as we implement projects, we want the private sector to remain engaged.
We achieve all this, most importantly, by creating an enabling environment for private enterprises to prosper.
- Right from the start, MCC’s selection process demands sound policy performance. We use a scorecard to monitor the policy performance of our partner countries on 20 different indicators of democratic and economic governance. This helps us incentivize the right policies in our partner countries for the private sector to compete.
- And, we insist on an ongoing commitment to a policy environment that respects the rule of law, fights corruption and makes necessary reforms to support entrepreneurs. This calls for policy reforms at the sector, institutional and national levels to sustain our investments. Secretary Purisima said it best: "Good governance is good economics."
With the right enabling environment in place, the private sector can pursue opportunities to work alongside MCC’s investments. What we begin through our grants, we look to you to finish with your investments that build upon, complement and add to our work. By creating the space for private businesses to prosper, we are, ultimately, preparing for the day when development assistance will no longer be needed because it will be replaced with private investment from businesses like those here in this room.
That is why we are always interested in hearing what businesses have to say in our partner countries.
- I recognize that much of MCC’s work is already underway here in the Philippines.
- Still, I want to hear your thoughts on what more we can do—or what we can do differently—to optimize public-private partnerships both here in the Philippines and perhaps in the region through our other compacts in Indonesia and Mongolia.
The bottom line remains: We succeed when your business succeeds as we work together to generate the economic growth Filipinos need for a more prosperous future. As we like to say, all boats rise with the tide. The Philippines must continue to make the tough choices to open its economy to greater private sector activity.
The people of the Philippines deserve nothing less, and we have the power to give them what they deserve. Let’s do it. Let’s work together to uplift the lives of Filipinos by advancing economic growth led by private enterprise.
Thank you again for inviting me here today, and I welcome our conversation this afternoon.