Speech

of
His Excellency Benigno S. Aquino III
President of the Philippines
at the APEC 2015: CEO Summit, APECs Inclusive Growth Imperative
[Delivered at the Rizal Ballroom, Makati Shangri-La, on November 16, 2015]
Some of you in this room may be familiar with the roots of the healthy Philippine
democracy of today. In 1986, millions of our people gathered in EDSAour capital citys
most prominent avenueand other cities throughout the nation to overthrow a dictator,
who had for too long subjected our country to his tyranny and oppression. People
armed only with rosaries, good intentions, and belief in their countrymen stood up to
tanks, artillery, and planes. This was the miracle of EDSA, which made possible that
which was impossible, and returned democracy through People Power. After fourteen
years of Martial Law, our people were successful in lifting my mother into the
Presidency to lead the rebuilding of our nation. That erafrom the dictatorship which
began when I was 12, up until the end of my mothers presidency when I was 32
undoubtedly shaped many of the viewpoints I hold today. I will never forget one
particular instance, when my family was in exile in Boston, and I asked my father: If we
are in the right, why are we the ones in exile? He responded with a question of his own:
How can those who cannot even eat, think of concepts such as freedom and dignity?
The first freedom is the freedom from hunger. That is the first that has to be won.
I share my fathers words today because what we will speak of in this summitand in
the meetings that will occur in the days to comeis deeply personal to me. We will
have important conversations about how we can free our people from the oppression of
poverty, and how to empower them to take part in sustainable economic growth. Today,
perhaps I can tell you about the Philippine story: what we have done to achieve largescale transformation.
I recall a very early meeting I had with my Cabinet, in which we discussed why the
poverty rate hardly moved over the past decadeor what I sometimes refer to as a lost
decade. The numbers were alarming: Income growth was low, and inequality was at
incredibly high levels, in terms of access to employment and social development
opportunities, particularly in health, education, and social protection. All this, despite
relatively consistent economic growth.
When one thinks about it, it is quite sad. If ten years ago, if my predecessor had done
what were doing now, I can only imagine where the Philippines would be. Of course, I
am also aware that past is past, and nothing you can do in the present or the future will
change it. Nevertheless, remembering the past revitalizes usand energizes us to
make up for lost time.

We resolved that this sort of trickle down economics was not the way forward, and that
the only real growth is that which is felt by the many. Thus, inclusive growth became the
north star of our national policygrowth that truly helps each and every Filipino lift
themselves up from poverty, and play a meaningful role in continuing our countrys
growth story.
We spoke of the methods we would employ. We knew we had to craft and relentlessly
pursue a holistic and cohesive national strategyone that can systematically respond
to every debilitating aspect of poverty, with the belief that this good governance is good
economics.
One of the first things we looked at was whether we were making the most of the scarce
resources we had at our disposal. This is why, from day one, the question we have
always sought to answer while discussing any program or project has been: How does
this benefit the Filipino people? We took a budgeting system compromised by leakages
and corruption, and instituted in its place zero-based budgeting. Through this system,
we reviewed all the items in the budget to find out what was achieving its purpose and
what wasnt. For those that werent, we either changed the program or removed it
completely, to make absolutely certain that every peso of taxpayer money is spent with
the people foremost in our minds. We also followed the principle of bottom-up
budgeting: we reached out to communities, believing that they, more than anyone else,
know their own needs. We took advantage of technology to implement mechanisms to
aid in transparency and accountability, through websites called Budget ng Bayan and
Pera ng Bayan, which mean The Peoples Budget and The Peoples Money,
respectively. These gave our citizens greater power to monitor our budget, and also to
report individuals suspected of wrongdoing.
We plugged leaks throughout the bureaucracy, and we did not shy away from
confronting the most complex and crippling problem of our nation, namely, corruption.
Over the last five years, we cracked down on all those proven to have engaged in
wrongdoing. Now, a former President is under hospital arrest after being charged with
plunder. The former Chief Justice who had no compunctions about being selective
about implementing the law was removed through impeachment, after it was revealed
that he violated our laws by failing to declare over 98 percent of his assets as mandated
by our Constitution. Well-known Senators have been arrested for their alleged
involvement in a scam of massive proportions. We have likewise filed 581 cases against
tax evaders and smugglers, who owe the Filipino people billions of pesos in taxes. And
might I point out that these only cover a fraction of our anti-corruption efforts.
These efforts, among countless others, naturally freed up or helped increase the
resources we had at our disposal; the only question was where to allocate it. We did not
think twice about our decision. We invested it in our greatest resource: our people. That
is why, from 2010 to 2015, our Social Welfare and Development Budget increased
sevenfold, our Department of Educations Budget essentially doubled, and our Technical

Education and Skills Development Authoritys Budget increased by 84 percent. Might I

emphasize that we did all this, and more, without raising any taxes, apart from the sin
tax, the proceeds of which went to expanding medical services for our people.
But we didnt simply throw money at the problem. We followed a thorough strategy to
respond to all aspects of poverty, and to give our people a legitimate chance to retake
authorship of their own destinies. Perhaps I can give you a brief walkthrough of our
approach.
We invested in upgrading our educational infrastructure. Within our first three and a half
years in office, for instance, we ended an inherited backlog of 66,800 classrooms, along
with inherited shortages in seats and textbooks. We reformed our basic education cycle
to conform to global standards, and to give our children ample time to digest their
lessons and maximize their learning.
We also knew, however, that even though elementary and high school education are
supposed to be free in the Philippines, some of our countrymen didnt have the
wherewithal for transportation, or for pocket money, that would allow them to capitalize
on this free education. Some were in such dire poverty that their bodies could not stand
the rigors of schooling. This is why we undertook the large-scale expansion of our
conditional cash transfer program. It gives cash grants to poor households, as long as
their children go to school, are vaccinated, amongst other conditions. This responds to
the twin problems of families not being able to get by, and children not being able to
attend school. Perhaps we can listen to one of the beneficiaries speak about the
program:
[CCT VIDEO 1]
From June 2010, the number of beneficiaries of this program has gone from less than
800,000 households to 4.4 million, or roughly equivalent to 22 million Filipinos. In 2014,
we began including households with high school age children, because our institute of
development studies conducted a study that showed that high school graduates earn 40
percent more than those who only spent some years in elementary level. While this
program was designed with the long-term effects in mind, we have already enjoyed
early success. In fact, this year, 333,673 CCT beneficiaries graduated from high school,
13,469 of whom graduated either with honors or other awards. I met two of these
graduates, both of whom were accepted into one of our countrys most prestigious
schools, the University of the Philippines; on top of that, they are taking Civil
Engineering, which is a quota course. Here is one of them talking about her experience:
[CCT VIDEO 2]
I cannot overemphasize the impact of this program. The statistics reinforce my point:
From 2008 to 2013, the amount of out-of-school youth in our country dropped from 2.9

million to just 1.2 million, and we expect that these numbers will improve even more.
Whereas once, some of these graduates would have been subject only to the possibility
of menial jobs; now, they can move up the value chain and enter more promising
careers. Of course, this is the goal for most of our studentsand for our citizenry at
large: that they can take advantage of the growing number of opportunities in our job
market, most of which require skilled labor. This is why our Technical Education and
Skills Development Authority has been working closely with the private sector to design
and implement courses that give our people the best chance to attain a sustainable
livelihood. Simply by doing this, we raised the employment rate of our scholars from
28.5 percent to almost 70 percent under our Training for Work Scholarship Program.
Perhaps the best example of this is our work with the Semiconductors and Electronics
Industries in the Philippines Foundation, Inc., where our graduates posted an
employment rate of 96 percent.
Apart from helping our people find long-term employment, we are also enjoying a bonus
return on our investment. Think about it: For our technical educational program,
government invests an average of around P7,155 for every scholar. If a graduate, for
example, finds employment in the BPO sector, a conservative estimate would have him
making around P234,000 annually. Assuming he receives the [maximum] tax deduction,
this means his annual income tax will be P7,900. Imagine that. In less than a year, we
break even. And these individual workers will not be working for only a year; they will be
paying taxes until they retire, and their taxes can help create even more opportunities
for other Filipinos.
The good news is: This is not the only sector where our brand of good, common sense
governance has sparked a virtuous cycle of growth and inclusivity. There is also our
newfound capacity to invest in infrastructure. When my term as a member of Congress
began, shortly after all our economies were reeling from the Asian Financial Crisis. The
situation was so dire that, each time I approached a national government department to
ask for assistance for my district, their refrain was consistent: We have no funds.
Now, the situation is extremely different. From 1.83 percent of GDP in 2010, we have
increased our infrastructure budget to 4.10 percent of a GDP that, might I emphasize,
has exhibited fast-paced growth. The goal is to have this figure reach 5 percent of GDP
by next year. In fact, now we have to contend with a very different problem compared to
what I encountered in Congress. I am told that a lot of times we are nearing the
absorptive capacity of the government to implement these infrastructure projects, which
means that we need more engineers, more qualified contractors, particularly in far-flung
areas, and more building materials, among others, to build the roads, airports, and
seaports necessary to give rise to the connectivity we need to allow everyone to
participate in our growing economy.
Indeed, our entire growth strategy hinges on the idea of empowerment. Empowered
citizens, after all, are empowered consumers, whose income will go to the goods and

services produced by companies. The end result: Instead of having many big fish in a
very small pond, we are moving our economic ecosystem into a bigger pond, where
everybody can grow and reach their full potential.
Ladies and gentlemen, I believe this is the most critical element of sustainable growth:
inclusivity. If we can include our people in public life, in determining the path to our
future, and in building our economy, it redounds to a more stable environment and to
greater economic prosperity. In other words, it boosts our potential to levels never
before seen. You have seen the transformation of our countryfrom being known as
the Sick Man of Asia to becoming Asias New Darling. You have seen how our economy
has become one of the fastest growing in the world, and how we have quickly risen in
global measures of competitiveness. You may have even noticed the change in our
peoples attitude, from being apathetic to perhaps being a little too demanding, which
we believe to be healthy in a democracy, since it gives government motivation to be
even more efficient. Perhaps our peoples increased participation is not too surprising,
given that they have likewise seen this transformation in their lives. The initial results of
our Department of Social Welfare and Developments most recent assessment reveal
that at least 1.09 million households have been lifted from poverty, which is roughly
equivalent to 5.45 million Filipinos.
I share our story with you today because I believe we can do this on a regional scale; I
believe if we work with each others economies, and if we harness the strengths of all
our peoples, we can give rise not only to inclusive national economies, but to an AsiaPacific where our citizens truly know what we talk about when we say growth.
I am aware that this will neither be easy nor quick, but we have reason for optimism.
The more that people gain the first freedomwhich is freedom from hungerwe set an
environment that nurtures the growth of all the other freedoms. The leaders of our
economies have gathered here under the banner of building inclusive economies, and
by so doing building an inclusive world. And I believe that, if we can fully engage the
private sector in this mission, offering the many benefits brought about by inclusivity, we
can achieve this sooner rather than later. Together, I am confident we can author the
next great chapter in the history of human civilization; as a connected, synergized AsiaPacific, we can bring about the advent of a regionand a worldwhere no one is left
behind.
Thank you. Good day.