Opening of the Korean-ASEAN FTA Support Center
25 June 2019; Makati Shangri-la
[As delivered]


Good morning, ladies and gentlemen. Annyeong haseyo.

On behalf of the Department of Trade and Industry, I would like to thank our friends from KOTRA Manila for inviting us here at the Opening Ceremony of the Korea-ASEAN FTA Support Center.

The opening of the Support Center comes at an auspicious time when the Philippines has just started negotiations with South Korea for a free trade agreement (FTA) early this month. We were in Korea — in Seoul last June 3 & 4, right? After the president’s visit for the NIKKIE Conference in Japan. The opening of this Support Center here in Manila is a testament of the strong bonds of friendship and partnership that ties both our countries. In fact, our good ambassador mention that this is the 70 years of good relationship between the Philippines and Korea. And also my direct uncle was also a veteran of the Korean war where the Philippines sent about 7,000 troops to Korea. And so we grew up hearing about this story as a young officer of the Philippine army then, and that’s story of our Korean war.

The start of FTA negotiations between our two countries ushers in a new chapter in the Philippine-Korea relationship. In 2018, South Korea was the country’s fourth major trading partner. It is our eighth export market, and send top import supplier. In other words, we import more than the export in Korea and I appreciate the efforts right from the Ambassador to the Philippines from Korea himself, saying that in order to prosper the two countries there should be a win-win and a neutrally beneficial trading relationship. So as we try to grow our two-way trade there is suppose to be a consciousness on balancing the trade between our two countries. With the prospect of concluding an FTA by the latter part of this year. Because of that we have the signing of the FTA, we started this June that we hope to sign by November. Hopefully with the President visits Korea in November, celebrating the 70th year of our bilateral trade relationship. We are confident that trade in our country with the signing of the FTA will further expand.

The importance of this FTA to the Philippines cannot be overstated, as this will open a new and enhanced market for Philippine products. The Ambassador mentioned specifically bananas and other tropical fruits. On the other hand, Korea equally benefits, especially gain more markets access in their automative parts and manufactured products.

Overall, the proposed FTA enhances our two countries’ advantages towards mutual beneficial arrangements. Both the Philippine and Korean teams are hopeful that we can complete negotiations by September, just in time for the signing in November this year.

KOTRA Manila and the Korea-ASEAN FTA Support Center will play important roles in the realization of these plans.

Of this center, I would like to invite our friends from the Korean Business Community to expand their investment in the Philippines and take advantage of the country’s economic breakthrough. The Philippines is still the second fastest growing economy in ASEAN ranking next to Vietnam. The GDP growth still at 6.2% in 2018 and 5.6 in the first quarter of 2019 that we hope to catch up and go back to the 6% growth by the end of this year. We thus still robust stable economic fundamentals, as manifested by recent upgrade BBB+ by the credit rating groups under Standards & Poor.

Further the Philippines is a demographic sweet spot, discovery of 108 million Filipinos averaging 24 years old and equivalent to a fresh graduate and younger compared to the rest of the world. Although this is a relatively young and large population which serves as a good consumer based in the market for many of the investors in the country considering the very low unemployment rate. We suggest that we have a consumer market, a large population that is basically employed and therefore have better courtesy power. And we see that we are growing for many more years to come as we are coming from a relatively young population age.

The human capital in the Philippines is also a good source even at young and vibrant and big population. It is also a good source for manpower requirement of many investors. Which are now 700,000 graduates and about 75,000 are in the Science and Technology field. They are friendly, hardworking, honest, with integrity, trainable, fast learner and is well-versed in English.

Aside from many strong economic fundamentals and a high speed workforce, the Philippine government has enacted several reform measures to ensure the protection of investments from foreign investors.

In the last year, the President Rodrigo Roa Duterte push for the enactment of Republic Act No. 11032 or the EODB law, which enhances the existing Anti-Red Tape Act of 2007 and that law is actually in effect right now as we speak.

For the second half of the Duterte Administration, we are focused on passing key reforms to complete the economic narrative.

There are at least six key economic reforms, number one the TRABAHO Bill or the Second Tranche of the Tax Reform. Of course, we’ve been trying to have a better transition period especially those who have concern on existing of foreign companies especially the eco zones. So we are working now on smoother transition or some adjustment on the proposal. I think that is some concern mostly raised by Korean Chambers and together with the other business Chambers. Also, the Passage of the Public Service Act, which liberalize sector in the public service sector. The Amendments to the Foreign Investment Negative List or the Foreign Investment Act which will shorten further the sectors included in the FINL. And also, the Amendments to the Retail Trade Liberalization Act that shall enable many more foreign investors to come in as we adjust the threshold for the retail trade to come in especially to foreign investors who want in the retail trade sector. So coming from 2.5 million dollars we intend to bring it down to about 200 or 300 thousand dollars to make it more liberal, leaving a bit of protection still to the micro and small retailers. And then the enactment of the new law hopefully to be passed, the Innovation Act and also the Innovative Startup Bill.

In pushing for the enactment of the Innovation Act and Innovative Startup Bill, this will close the loop in our various policies to harness the Fourth Industrial Revolution and its key characteristics like AI, financial technology, and Internet of Things in bringing about changes to our businesses. Let me also add that in our recent visit the early part of this month, we were also talking about how can we support the e-vehicle industry. And we were together with the e-vehicle industry in Korea and they were of course making some suggestions on how else can we promote the development of e-vehicle in the Philippines so that we can start this new industry and hopefully to be a major player to this industry together with our Korean partners.

In conclusion, I want to reiterate that the government is fiercely committed in its support for our free trade agreement with Korea, and the continuing good relations between our two economies. Our continued collaboration will result in inclusive growth and shared prosperity for both our peoples.

Kamsahamnida. Thank you. Mabuhay kayong lahat!