Oleh/By : DATO' SERI DR. MAHATHIR BIN MOHAMAD
Tempat/Venue : MANILA, PHILIPPINES
Tarikh/Date : 04/02/94
Tajuk/Title : A LUNCHEON HOSTED BY THE
PHILIPPINES CHAMBER OF COMMERCE
AND INDUSTRY
Distinguished Guests;
Ladies and Gentlemen,
I wish to thank the Philippines Chamber of Commerce
and Industry (PCCI) for the opportunity given to me to
address this distinguished gathering of members of the
Philippine business community and to share with you some
thoughts on the prospects for greater two-way trade and
economic cooperation between the Philippines and Malaysia.
2. When I met H.E. President Ramos during his official
visit to Malaysia last year, we had had very useful
exchanges of views on the whole spectrum of our bilateral
relations as well as regional and international issues of
mutual concern. We paid particular attention to matters on
trade and economic relations between our two countries so
that a more conducive framework could be worked out to
enhance cooperation in the economic sector.
3. Malaysian and Filipino entrepreneurs have been quite
responsive to the opportunities arising from liberalisation
measures undertaken unilaterally by both countries and
through the Common Effective Preferential Tariff (CEPT)
mechanism towards the creation of the ASEAN Free Trade Area
(AFTA). Several major Malaysian corporate groups such as
the Kuok Properties, Genting, Berjaya Group, Tanjung Group
and others have already established their presence in the
Philippines through joint ventures and participation in the
development of the Subic Bay area. This evidence of growing
confidence in the Philippines is obviously the result of the
pragmatic economic policy being pursued by your current
administration.
4. The level of two-way trade between the Philippines and
Malaysia currently stands at about RM1.83 billion (US$0.72
billion), with Malaysian exports to your country amounting
to RM1.22 billion (US$0.47 billion) and our imports at
RM610.7 million (US$239 million). While our bilateral trade
has certainly grown, the close proximity of our two
countries should have generated a higher volume of trade
than is currently happening. In many ways our two countries
have the same economic goals and aspirations and this could
certainly provide us with the basis for cooperation in all
economic sectors. Political differences are still with us
but both the Malaysian and the Philippines Governments have
decided not to let these differences stand in the way of
economic cooperation.
5. In ASEAN we both have a strong base and viable models
for the economic development of our countries. There is no
doubt that we have all learned from each other's mistakes
and strategies. In fact the ASEAN framework of cooperation
enables us to achieve greater efficiency in manufacturing
and production, in addition to making our producers more
competitive in the world market. The creation of a free
trade area in ASEAN would make the ASEAN countries more
attractive for foreign direct investment. The particular
comparative advantages of each country will no doubt play a
role in the choice of investors.
6. Our commitment to the creation of AFTA must be
reflected in our readiness to meet the deadlines set for
tariff reduction and trade liberalisation measures envisaged
over the time frame that we have set for ourselves. In fact
the current thinking among ASEAN leaders points to the need
to accelerate the pace of liberalisation in order that AFTA
can be achieved five years ahead of the original 15-year
time frame.
7. The creation of AFTA means that businesses must make
the necessary adjustments to meet the challenges associated
with free trade. With reduced tariffs, there will be less
protection for practices which cannot withstand open
competition. While governments can provide the environment
conducive for trade and commerce to flourish, it is the
private sector which must be more responsive to the
challenges and opportunities arising from the AFTA.
Competing with each other will result in our being more
competitive in the rest of the world. While trade within
AFTA is important, more important still is the trade with
countries outside AFTA.
8. In the context of ASEAN economic cooperation, the
Philippines together with Malaysia, Indonesia and Brunei are
now making efforts to develop the East ASEAN Growth Area
covering the Southern Philippines, Kalimantan and Sulawesi
in Indonesia, Brunei, Sabah and Sarawak in Malaysia. We
need to develop the area so that the benefits of economic
progress are diffused to regions outside our major urban
centres. While the development of cross-border trade will
be the thrust of the trilateral initiative, other economic
sectors such as tourism, shipping and land development can
be tapped to further enhance the growth of the area. As a
start we could try to develop the communication links
between the regions, as the current lack of communication
infrastructure has impeded trade and development of the
area.
Ladies and Gentlemen,
9. Malaysia adopts a liberal approach to economic
management and development. We maintain an open economy,
and coupled with sound trade and investment policies we have
endeared ourselves to foreign investors. We have managed to
sustain a relatively high growth of around eight to nine
percent per annum. While foreign direct investment in
Malaysia is an important factor in our economic development,
Malaysia also adopts a liberal attitude towards reverse
investments. It is for this reason that our private sector
is now in Iran, Fiji, Papua New Guinea, China, Vietnam,
Cambodia, Myanmar, and a host of other countries. Nearer
home Malaysian investments are also seen in our ASEAN
neighbours of Thailand, Singapore and Indonesia and in your
country.
10. The Philippines is important to Malaysia's hopes for
greater intra-ASEAN trade and investment. Malaysian
investment interests in the Philippines have increased over
the years and can certainly be expected to increase further
in the coming years as projects under the Memoranda of
Understandings signed in 1993 come onstream. Our
investments here, especially in Subic Bay, are expected to
run to millions of dollars. They include investments in
manufacturing, hotels, resorts, food processing,
construction of highways, automotive assembly and
recreational facilities, among others.
11. Likewise Malaysia would like to extend our invitation
to the Philippine businessmen to invest in joint-ventures
with Malaysian counterparts in all sectors of our economy.
I note that total Philippine investments in Malaysia for the
period 1980-1993 cover a total of 25 industrial projects.
The total proposed Philippine equity and capital investments
in these projects amounted to RM68.3 million (US$26.7
million) and RM168.6 million (US$66.1 million) respectively.
The bulk of these investments is in the manufacturing sector
and in joint ventures in food manufacturing, textiles,
industrial and chemical products and non-metallic products.
12. The level of Philippine investment in Malaysia can of
course be very much more than the present level. Both our
countries have in fact paved the way for greater joint
economic cooperation with the signing of the Double
Taxation Agreement on April 1982 as well as by the
Multilateral Investment Guarantee Agreement of ASEAN
concluded on 12th December, 1987.
Ladies and Gentlemen,
13. The growth of bilateral trade has been mutually
beneficial as both imports and exports have expanded. At
the same time, the composition of trade has also
diversified.
14. The Malaysian economy is expected to grow more than
eight percent this year. There will therefore be a lot
of opportunities for the importation of Philippine products
into Malaysia, more so because of our desire to diversify
our import sources and reduce dependence on our traditional
trading partners. At the same time, the Philippines with
its large population and expanding economy is a country with
potential for import of a variety of Malaysian goods.
Perhaps we should accord greater attention to the
development of infrastructure that would directly
facilitate trade.
15. Malaysian entrepreneurs have also acquired expertise
in certain sectors such as in plantation and mining, and the
manufacturing industry, particularly those involving rubber,
palm oil and textile products. In the services sector, such
as engineering consultancy, construction and tourism,
Malaysians are looking for opportunities in the Philippines,
in collaboration with local entrepreneurs.
Ladies and Gentlemen,
16. The purpose of my visit here with a large delegation
is to meet with political and business leaders and to
identify and pursue common areas of interest. I am
confident that we can all succeed in this effort in view of
the common goals that we share. We also have common
aspirations, that is to achieve and accelerate economic
development in the context of a liberal trading
environment so as to give our people a higher standard of
living and a better quality of life.
17. I am heartened by the response and interest by the
private sector in the Philippines to step up commercial
relations with Malaysia. I am confident that there will be
concrete discussions on business opportunities among the
business leaders of both countries, and that follow-up
action will be taken to translate business potentials into
actual business transactions.
18. As we look to the future with hope and confidence, let
us continue to strengthen the foundation of our relations
so that we will mutually benefit from this development.
Thank you.
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