By Edwin Cordevilla
The Swiss Alps is terra incognita for most Filipino tourists, particularly during the dead of winter when the temperature drops to below zero—and teeth-chattering—levels, requiring several layers of clothing that we're all unaccustomed to. But Davos high up in the Swiss Alps beckoned, and beguilingly so, because it is here where, after an interregnum of three years due to the Covid-19 pandemic since March 2020, the World Economic Forum (WEF) resumed its face-to-face meetings from January 15 to 20. This forum brought together representatives from more than 100 countries to discuss what Wikipedia described as “some of the biggest issues facing the world."
President Ferdinand ‘Bongbong' Marcos Jr. was invited to the annual meeting by WEF last year. He immediately accepted the invitation from founder Klaus Schwab. But he later had second thoughts, saying that he had done so many trips abroad since taking his oath of office on June 30 last year.
When the new year started, however, he retracted his earlier statement, apparently seeing the opportunity to make his voice heard amid the Babel of tongues at the gathering—and instead ‘sell’ the country to a gathering of government and business leaders from the four corners of the world. He apparently wanted to convince the participants that, well, they had everything to gain and nothing to lose if they chose to take part in the country's march towards sustained and dynamic growth.
Marcos was the lone ASEAN leader, and one of the only two leaders from Asia, attending this year’s forum.
What Marcos pitched to Davos
Right at the start of the 2023 WEF, Marcos gave a detailed presentation on the current state of the Philippine economy. He said that while the International Monetary Fund (IMF) projected only a 2.7 percent growth for the global economy in 2023, slower than the 3.2 percent posted last year, the Philippines expects the to grow by around 7.0 percent in 2023.
He attributed this to our strong macroeconomic fundamentals, fiscal discipline, structural reforms and liberalization of key sectors over the years. These enabled the country to withstand the negative shocks caused by the pandemic and succeeding economic downturns and chart a route toward a strong recovery.
The Philippines, Marcos said, will continue to focus on sustaining recovery, promoting a local environment that will nurture businesses by helping them maximize their competitiveness and facilitate their entry into the global market. In fact, the Philippines’ development plan is geared toward inclusive and resilient development.
The government also recognizes the importance of digitalization as a vital cog for long-term economic growth and as a tool for economic transformation. He promised to empower and enable micro, small and medium enterprises (MSMEs) to participate in the digital economy.
The President also underscored the importance of education, skills development and lifelong learning to enhance the employability of workers as he emphasized the need to address the current social vulnerabilities.
Government interventions and public-private partnerships (PPPs), he pointed out, must be strengthened to improve access to employment opportunities. Health systems and social protection must also be enhanced to mitigate current and future risks.
During a one-on-one dialogue with the president, WEF President Børge Brende hailed the Philippines for its high gross domestic product (GDP) growth, describing it as the "fastest growing" economy among member-countries of the ASEAN.
Marcos told Brende that the Philippine government had been concentrating on helping micro, small and medium enterprises because they comprise a large part of the economy, similar to most Southeast Asian countries.
"And I think that's where the growth is coming from," Marcos said as he noted that the government kept monitoring the country's unemployment rate amid reports of a recession last year.
What Marcos gained from Davos
What is clear from media coverage of our participation in the World Economic Forum 2023 is that this effectively showcased the country as a premier investment hub, with multinational companies expressing keen interest in putting up shop here.
Among the nine companies interested in investing in the Philippines is Astranis, a US provider of low-orbit satellites used for Internet access. It seeks to provide connectivity to areas that are not yet connected through the main telecommunications providers.
The chairman for Asia -Pacific of Morgan Stanley, a leading global investment bank, told President Marcos that they intend to set up an office in Manila. He conceded that the President had taken the right step in involving the private sector in accelerating the country’s infrastructure development.
Meanwhile, DP World, a Dubai-based multinational logistics company, is considering setting up an industrial park in Clark Field, Pampanga. According to Sultan Ahmed bin Sulayem, group chairperson and CEO, the logistics company has been developing industrial parks in a number of countries and is interested in investment opportunities in the Philippines.
The President also met with officials of Glencore, a multinational mining company. They indicated willingness to invest in the mining industry in the Philippines.
House Speaker Martin G. Romualdez, who joined the President in the delegation, said the President did an excellent job at the WEF by driving more investments to the Philippines to boost the momentum of economic growth.
“I think the delegation that came to Davos actually impressed the Davos attendees. We actually demonstrated how the Philippines, the President, his official family, the economic managers, alongside the top businessmen and women, showed a united front to the entire world… People took notice of it and said that it’s obvious that the Philippines is back. We are open for business, we are here listening and we are inviting everyone to see why the Philippines would be the best destination to invest in,” the lawmaker enthused.
Other participants in the WEF, such as Finance Secretary Benjamin Diokno, were just as enthusiastic about the country’s participation in Davos: “We’ve accomplished much. We had meetings with various top leaders and businessmen. The purpose was really to sell the country.”
For his part, Socio-Economic Planning Secretary Arsenio Balisacan said potential investors want to be assured that the country can sustain its economic growth before they can do business in the Philippines.
Senator Mark Villar agrees with the optimistic assessment of the country’s economic prospects, as he is convinced that the President’s trip to Switzerland will attract more investments in the country. “If we secure additional investments, there will be more job opportunities in our country which will pave the way for the further development of our economy.”
Sovereign wealth fund
The President’s ‘soft launch’ of the Maharlika Investment Fund (MIF) in Davos, which he promised to do before leaving for the WEF, drew substantial interest from global investors even as he wants to keep the doors open to suggestions on how to customize the proposed sovereign wealth fund to the country’s needs.
“The more we study it, the more it’s clear that although the sovereign wealth funds around the world have the same name, they’re all very different. They’re different in purpose, they’re different in methodology and of course, they operate in a different context of law.
So, we have to design it very specifically to the Philippine condition, and that’s what the legislators are trying to do now: to make sure that it is customized for us and it will be a good thing for us,” Marcos said.
Romualdez said the MIF became a “topic of discussion and interest” during their meetings with global investors.
“It is the vehicle that most countries, not just developed countries but developing countries, utilize to attract investments for development, for infrastructure projects that need a long gestation of capital investments into these ventures.”
Reacting to criticism that the soft launch was “premature,” the House leader said: “On the contrary, we’re late—we really were; we’re really far behind … You see the better-performing sovereign funds; they’ve been around for decades.”
Romualdez said lawmakers in the Philippine delegation to the WEF were “listening to the concerns and to the sensitivities” of potential investors to ensure the proposed sovereign wealth fund conforms with the best practices in the international investment environment.
House ways and means committee chair Joey Salceda suggests that the fund be private sector-driven instead of tapping dividends or assets from BSP, DBP, and Landbank. He proposed that the seed money should be sourced from the securitization of dividends from government-owned and -controlled corporations (GOCCs).
The lawmaker said that GOCC dividends, or “real surpluses,” should be used as initial funds for the MIF. These total to about PHP44.3 billion annually and would be securitized in 20 years and that amount could grow to PHP765.96 billion. An IPO would follow, which means that MIF Corp. will become a listed company in the Philippine stock market. He said the latest version would make the MIF more attractive to foreign investors and would allow more private-sector participation.
A new version of the proposed Maharlika Investment Fund (MIF) may eventually open it up to foreign investors, including reputable multilateral institutions, to make it more “private sector-driven,” according to the country’s chief economic manager.
Finance Secretary Benjamin Diokno said that once established, foreign investors could bring more funds into the MIF for crucial infrastructure projects of the administration. This was how Indonesia had grown its sovereign wealth fund, Indonesia Investment Authority (INA), Diokno said.
“That is really the nature of the fund. For example, Indonesia’s INA started with USD1 billion then grew as more investors came in,” Diokno explained. The Indonesian government jump-started INA with an initial capital of USD5 billion but it had raised USD25.5 billion since it was created in 2021. That could be a source of some important infra projects for the Philippines,” he added.
Towards the future
Marcos’ participation at the World Economic Forum in Davos, Switzerland from 16-20 January this year follows the trajectory of his past appearances in the global stage that began with his first foreign trip to Indonesia soon after his inauguration on June 30 last year.
It is part and parcel of an independent foreign policy as laid down in the 1987 Constitution that’s exemplified by his pronouncement right from the start that under his administration the Philippines will be a “friend to all, enemy to none”. This independent foreign policy is consistent with the Marcos administration’s efforts to maintain friendly relations with other counties with whom it can expand economic cooperation and two-way trade.
The President consistently cited the Philippines’ economic growth story before the United Nations General Assembly, the Association of Southeast Asian Nations (ASEAN) summits in Cambodia, the Asia-Pacific Economic Cooperation meeting in Bangkok, and his visit to China in early January this year. He managed to effectively convey the country’s determined bid to pursue its path to sustained economic development at Davos, and this is basically the same message he will deliver when he goes on state visits to Japan and the United States later this year.
Wit its highly successful campaign in Davos to enlist the support of the international community in our efforts to boost economic growth, reduce poverty and improve our standards of living, the Marcos administration is on the right track in ramping up its diplomatic offensive in other countries near and far to forge closer economic ties with them through enhanced trade and investments based on mutual trust and mutual benefit in the years to come.
Editor’s note: The opinions expressed in the foregoing article are solely the author’s and do not reflect the opinions and beliefs of the Philippine News Agency (PNA) or any other office under the Presidential Communications Office.
About the Columnist
Edwin M. Cordevilla is an Undersecretary of the Presidential Communications Office (PCO). He is a poet, journalist and author of several books such as Phoenix and Other Poems (2000), The Occasions of Air, Fire, Water, Earth (2012), and the non-traditional epic poem Ten Thousand Lines Project For World Peace (2013).
He was also named as the recipient of the Lifetime Achievement Award for Literature and the Golden Pen Award during the World Poetry Festival in 2017 in India and a two-time awardee of the Best Newspaper Opinion Columnist in Filipino award during the 16th and 18th Gawad Tanglaw in 2018 and 2020, respectively.