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Permanent Mission of the Republic of the Philippines to the United Nations

Philippine Statement

Hon. Edgardo J. Angara
Senator of the Republic of the Philippines

UN High Level Dialogue on Financing for Development
New York, 23 October 2007

Mr. President,

On behalf of the Government of the Philippines, we welcome this important conference in preparation for the review of the Monterrey Consensus next year.

We commend the Secretary General’s report on the implementation of the Monterrey Consensus, its urgent call for donor countries to meet their aid commitments, and its emphasis on domestic resource mobilization and South-South cooperation.

My delegation associates itself with the statement of Pakistan on behalf of the Group of 77 and China.

We appreciate the rising GDP growth of developing countries in the last decade. This represents an enhanced capacity to mobilize financial resources for development. It further demonstrates that countries are able to grow with less dependence on foreign debts and resources.

As the Secretary General’s report highlights, while there has been an increase in ODA since the Monterrey Consensus, ODA flows are marked by selectivity and uncertainty. There are many low-income countries that receive very little aid. But a few have experienced surges in aid flows.

ODA to the Philippines, for instance, has steadily decreased for the past seven years. From US$13.3 billion in 2000, ODA loans decreased -- by 29 percent -- to US$9.5 billion in 2006.

Nevertheless, in the first quarter of 2007, the country’s GDP grew at a record high of 6.9 percent, the highest since 1990, outperforming other Asian economies such as Singapore, Malaysia, Indonesia, Thailand, and Korea.

Market interest rates are dropping, enabling the acceleration of bank-lending activities and stimulating investments.

Inflation is on the downtrend, registering 2.2 percent in March 2007, the lowest in two decades. The peso is appreciating, brought about by strong dollar inflows from portfolio and foreign direct investments.

Strong export earnings and overseas workers’ remittances have likewise contributed to a robust currency and to building up our international reserves.

Employment has been averaging over 91 percent for the last three years compared to 89.7 percent in the past six years.

The budget deficit decreased from US$4.8 billion in 2002 to US$1.5 billion in 2006.  This year, we hope to lower it further to US$1.4 billion.

These economic gains are primarily accounted for by our own bootstrap efforts at raising domestic revenues through fiscal and financial reforms.

With strong macroeconomic fundamentals in place, we initiated policy reforms – through legislation -- on mobilizing domestic resources and strengthening the capital market.

The anticipated passage in Congress of the Credit Information System Act, Real Estate Investment Trust, amendments to the Insurance Code and the Central Bank charter, among others, will generate long-term local financing for development.

But we cannot afford to be complacent.

We have to sustain this accelerating growth and improve our competitiveness. More important, we have to translate our financial gains into higher investments, more jobs, increased incomes, and reduced poverty rates.

Thus, we are investing in social services, particularly health and education; infrastructure; and good governance, specifically, anti-corruption measures.

The government’s top priority is education. We are working towards meeting the second MDG -- to ensure that all boys and girls complete a full course of primary schooling. We support the Basic Education Madrasah for Muslim Mindanao and promote science, technology and engineering.

In health, MDG 5, maternal mortality reduction, is our flagship program. Child mortality is declining but we continue to ensure that immunization coverage is universal.

To improve our infrastructure, we will invest US $37.8 billion over the next three years in power and electrification programs as well as in roads, bridges, railways, air, and water transport.

The sustained benefits from our efforts in education, health, and infrastructure, as with other aspects of the development agenda, will depend on good governance and anti-corruption efforts.

In this regard, the international community took note of the Philippine initiative, Debt for Equity in MDG Projects, during the past two sessions of the UN General Assembly in its resolutions A/60/187 and A/61/188.

This is an alternative modality where the creditors may chose to convert up to 50% of their debt-stock holding into equities channeled to MDG projects such as reforestation, mass, housing, water system, hospitals, infrastructures, or micro financing, etc.

It is now espoused by a number of developing countries .

Mr. President,

Noteworthy are improvements in the Ombudsman’s capacities in investigation and prosecution, in adopting continuous trials in the Sandiganbayan (anti-graft court), and in installing electronic case management and information system.

Civil society participation in public procurement activities is increasing. The recently passed electoral automation legislation provides an opportunity to improve the transparency of the electoral process. There are pending bills in Congress that will institute campaign finance reforms.

Our economic performance has given us opportunities to deepen our growth. But we face challenges that we need to respond to.

Consistent with the Secretary General’s report, the Philippines will continue to:

  • Improve the incomes and savings that provide the domestic resource base to finance human, social, and physical investments;
  • Work on more equitable sharing of wealth and income through reforms in access to financial resources, housing, and social services;
  • Increase foreign exchange earnings capacity through diversifying and improving our exports and attracting quality foreign investments;
  • Implement fiscal reforms that mobilize taxes, shrink fiscal deficits, and reduce dependence on debts;
  • Mobilize external development assistance from the domestic business sector and civil society in public-private and global partnerships;
  • Expand the use of instruments such as debt-to-development or debt-to-nature swaps; and
  • Sustain budget reform initiatives by shifting the focus of the budget process from inputs to results, and by promoting greater flexibility, transparency, and accountability.

We urge, however, that the UN, the International Financial Institutions, and developed countries continue to:

  • uphold the principles of the Paris Declaration that would do away with tied aid and donor-driven projects such as those we continue to witness in the Philippines;
  • re-visit the concept of debt sustainability and change this from the traditional capacity-to-pay to the concept of preventing debt payments from hindering countries to meet the MDGs; and
  • support South-South Cooperation in partnership with emerging economies and developed countries
  • urge multilateral agencies in coordination with donor countries to increase ODA commitments to developing countries who sign and ratify the UN Convention Against Corruption

We hope to see the principles of the Paris Declaration upheld up to our review of the Monterrey Consensus in Doha next year.

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