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.