Investing in a closer relationship
Australia and the Philippines are steadfast friends and close neighbors and by leveraging our respective strengths we can capitalize on the enormous opportunities in the region around us.
As Australia’s minister for trade and investment, I am marking this week my second official visit here to meet leaders from government and business and to participate in the Apec (Asia-Pacific Economic Cooperation) meetings.
Some of Australia’s leading infrastructure specialists, including representatives of the engineering, construction, legal and design industries, have also traveled with me to Manila.
They are looking for opportunities to share their experience and expertise with potential business partners here in the Philippines, who are aiming to help get important infrastructure projects built which are critical to continued economic growth.
Australia has emerged as the world’s 12th largest economy off the back of 24 consecutive years of uninterrupted economic growth, while the Philippines is also experiencing a period of very strong growth.
Ongoing reform, including probusiness policies and new investment, are all critical if we are to keep our economies growing in a sustainable way.
A key challenge for Australia, for instance, is readjusting to a substantial fall in commodity prices—namely coal and iron ore—which are our major exports. While Australia is a world power in resources and energy, we are keen to diversify our economy so that we are not overly reliant on any one sector regardless of how strong.
Consequently, over the past 18 months we have made a serious effort to reduce costs for business and to increase their competitiveness. We have, for instance, removed damaging mining and carbon taxes along with large swaths of regulation, we have accelerated and streamlined project approval processes, and we are planning record levels of investment in infrastructure.
Australia has also concluded landmark free trade agreements with Korea, Japan and China, which open new doors for goods, services and investment in the major economies of North Asia. Along with resources and energy, agriculture is a major part of our economy along with services, particularly in areas like tourism and hospitality and international education, our major services exports.
Having the right core infrastructure in the right places is fundamental to ensuring the productivity of our economies. The Aquino administration has already made great strides forward in this regard, lifting investment in infrastructure from around 3 percent of GDP to a predicted 5 percent.
The Philippines’ public-private partnership (PPP) program is making a significant contribution to this effort. The Australian government is pleased to be providing P1 billion worth of technical assistance to the PPP Center in Manila to strengthen the overall PPP framework.
PPPs now account for around 10 percent of all infrastructure projects in Australia, including highways, airports, power plants, prisons, hospitals and Rand D facilities. We welcome foreign investment in PPPs. Indeed, a Philippine-owned corporation, International Container Terminal Services Inc., is leading the development of Melbourne’s new P19.5-billion international container terminal.
Australian companies stand to make a strong contribution to the Philippines’ PPP investments, too. We have a successful track record of 30 years of PPP investment, so our infrastructure companies have accumulated considerable experience and expertise.
Both Australia and the Philippines are situated in a region of the world which, according to the OECD (Organization for Economic Cooperation and Development), will see the middle class of the Asia-Pacific surge from 600 million to more than three billion over the next 25-30 years. Yes, this provides considerable challenges, but also enormous opportunities for our countries to marshal our respective strengths, in helping to meet extraordinary levels of future demand and to increase the living standards of our own people at the same time.
This is why it is so important that our region continues working to provide the most conducive environment possible for international trade and investment to prosper.
Already, the Asean-Australia-New Zealand Free Trade Agreement has given a real boost to trade between Australia and the Philippines. We are also working closely with Asean countries to move the Regional Comprehensive Economic Partnership agreement forward. And the Philippines’ hosting of the Apec meetings this year is a strong indication of how seriously this country is taking trade liberalization.
Australia and the Philippines have a great future together. We each have our own challenges but we are also ready to face them. The Australian government, supported by an experienced and capable business community, stands ready to work with the Philippines in what we regard as a partnership for development.
We look forward to a very productive trade and investment relationship with the Philippines in the years and decades ahead.
Andrew Robb is Australia’s minister for trade and investment.
