Thank you for coming to Washington again to visit us here at CSIS. It's a real pleasure to have such good friends from Manila here in Washington. I'm Murray Bauer. I'm the chair for Southeast Asia Studies here at CSIS, and it's a real honor to work with Ambassador Joey Quechua and the Philippine Embassy and the U.S. Philippine Society Ambassador John Negroponte, the chairman, Hank Hendrickson, and the team there in organizing this event. We're going to look at today at the dynamic Philippine economy, growth, reform, and a look ahead. As you probably know, the team who's visiting here today includes the secretaries in the cabinet who manage the Philippine economy. These gentlemen are doing an incredible job as you'll hear today. I won't steal the thunder from them, but the Philippines has become a very important place to do business in Southeast Asia. It always was, but it's become even better and really leading the Southeast Asian countries in terms of its market performance, and that's because of the leadership of the president and the reforms that the people that you're going to talk to today have put into place. I'd like to quickly recognize Carla Hills. Ambassador Hills is a leader here on the CSIS Board. Carla, thank you for joining us today. It's really good to see you in the audience. My job is to introduce a man who's really put us all together in this room, a good friend, a real leader of the U.S.-Philippine relationship, a tireless worker, whether it's in the halls of the White House or Capitol Hill, and that is Ambassador Joey Cuisca. Joey, please join us. Excellencies Secretary Greg Domingo, Secretary of the Industry, Secretary Rohed Yusinsan, Secretary of Public Works and Highways, Ambassador John Negroponte, co-chair of the U.S.-Philippine Society, Mr. Ernie Bauer, Sumitra Chair here at CSIS, Ambassador Carla Hills, and other distinguished guests, friends, ladies and gentlemen, good morning to all of you. It is my honor and pleasure to welcome you to this conference, Dynamic Philippine Economy, Growth, Reform, and Looking Ahead. First of all, I'd like to thank Finance Secretary Sassapurisima who will be joining us later as he came in quite late last night, Trade Secretary Greg Domingo and Public Works Secretary Babesin Son, and the rest of the Public Sector delegation for taking time to be with us today. I also want to express our appreciation to the private sector delegation led by Mr. Bill Luce, co-chair of the National Competitiveness Council. Of course, I'd like to thank CSIS, Secretary Ernie Bauer, and his team for organizing this very important conference together with the U.S.-Philippine Society, who I also wish to express our gratitude to for their support for this conference. And on behalf of my government and the secretaries, I want to express our appreciation to Commerce Undersecretary Stefan Selig for joining us today, and we look forward to hearing his remarks in a few minutes. Your participation, Mr. Undersecretary, and I understand Commerce Deputy Secretary Bruce Andrews will join us at lunch, clearly reaffirm the vitality of the Philippine-American economic relationship, which we hope can only deepen and strengthen as the United States pursues its people to Asia. Friends, ladies and gentlemen, in a little over a year, the Philippine electorate will return to the polls to choose their next president. Many of you are perhaps wondering on what to expect in the post-Aquino administration. This conference is a great opportunity for us to look back at the incredible performance of the Philippine economy that was made possible by our exciting reform story, as well as to look towards the future. Strong macroeconomic fundamentals, prudent public finance management, and good governance have led to the improvements in the Philippine's business environment and competitiveness, as well as greater overall investor confidence. In fact, the International Monetary Fund has upgraded the Philippines in its most updated forecast and stated that the country will lead the Southeast Asian region with its robust GDP growth of 6.7 percent, upgraded from 6.6 percent in 2015, and 6.3 percent for 2016. Concurrent with these economic developments, the Philippine Stock Exchange Composite Index has risen from record high to record high. This strategic gains in economic competitiveness and transparency have been validated by a positive and improved ratings under a number of institutional indices. The bottom line, therefore, is this. We are reaping what we now call the good governance dividends, thanks to the leadership of the president and to the steady and prudent economic management of Secretary Policeman, Secretary Domingo, and the hard work and leadership of the likes of Secretary Singson. In order to ensure the sustainability of our good governance dividends, the Philippine government is now focusing on a menu of crucial policy areas in the remaining months and days of the Kino administration. The importance of preserving the gains of the good governance reforms that have been put in place cannot be overemphasized. The administration is firmly determined to achieve the completion of priority programs in all five pillars of the Philippine Development Plan to ensure that reforms will be sustained by strengthened public institutions, that the righteous path will be followed, that good governance becomes the norm at all levels of government, and that the gains from the transformation of mindsets and institutions will be sustained and permanent. There is also deep consciousness about the impending realization of the ASEAN economic community, which is expected to strengthen deep and further this year. ASEAN is a formidable economic force. This is precisely why, as ASEAN integration takes full effect, the Philippines is taking every possible measure to enhance its competitiveness and take on a more dynamic economic role in the region. ASEAN economic integration and the regional comprehensive economic partnership could certainly unleash a massive amount of economic potential, which the Philippines should be well poised to take opportunity off. We're also seriously considering joining the negotiations or exceeding to the Trans-Pacific Partnership soon after it is concluded. The Philippines appreciates strategic importance of potentially being a participant in what would be significantly an important regional free trade arrangement. Infrastructure investments will also be vital. We aimed to attain the level of infrastructure spending of 5 percent of GDP by 2016. We're also pursuing infrastructure development in the Philippines to public-private partnership programs, and in line with this, the Philippines and the U.S. recently signed a memorandum of cooperation and infrastructure collaboration, which we signed in New York last February together with Under Secretary Stefan Selig. We're also working hard for the passage of the Bank-Somoro Basic Law, now pending in Congress, which will hope will create a regime of economic opportunity, genuine development and inclusive growth. The economic impact of the Mindanao peace process is undeniable. Peace is the missing link to harness the full potential of Mindanao and achieve full economic development and inclusive growth. Finally, ladies and gentlemen, as you pondered investment opportunities in the Philippines today and post 2016, I only wish to emphasize that the Filipino people have always been the greatest resource of my country, whether in the Philippines or overseas, whether in the boardrooms of top corporations or in the rural hinterlands of the provinces. This is why we continue to make critical investments in healthcare, social services and education in order to empower our people to become greater participants and stakeholders in growing the Philippine economy. Before I conclude, let me return to the theme which I began these brief remarks. What is the likely post 2016 scenario? Let me assure you today that the Filipinos will choose wisely. They will choose someone who will continue walking the straight path, or the Daang Matuit, as we call it, and I'm confident that no matter who succeeds President Aquino in June of 2016, the pace and the substance of reforms of good governance can no longer be reversed. Thank you. Thank you very much, Mr. Ambassador. It's now my pleasure to introduce a very talented executive who is recruited by President Obama and Secretary Pritzker to be a leader in the Commerce Department. We're lucky to have him. He's a very experienced banker, investment banker. He knows the world's markets very well. If you haven't met Stefan Selleck, he joined as Undersecretary of International Trade at the Commerce Department about a year ago, and as Ambassador Quisha had mentioned, he has already been involved in pushing the U.S.-Philippine economic relationship forward. It's been a pleasure to get to know him a little bit. I think you will enjoy his remarks. Please join me in welcoming Undersecretary Stefan Selleck. Good morning. How did I do? That was the hardest part of the remarks. I've been in this job for one year, and I'm still learning the languages of these 17 countries I've already visited, so I'm trying. So first off, let me thank my new friend Ernie and CSIS for the invitation and the opportunity to speak with all of you this morning. And I would also like to congratulate CSIS on its recent launch of the U.S.-Philippine Strategic Initiative. I think this initiative is a perfect example of how important the bilateral relationship between our two countries has become. As head of the International Trade Administration, an agency whose mandate it is to create opportunities for U.S. businesses by promoting international trade, attracting foreign direct investment, and fostering a level playing field for U.S. businesses, we are looking forward to working with CSIS through the initiative to optimize the commercial relationship between our two countries. I would also like to take a moment to acknowledge the Philippine Embassy and the U.S.-Philippine Society for hosting this great event, and to thank you as well for the invitation to join you this morning. Ambassador Quisha, Secretaries Domingo, and Singsan, welcome to our nation's capital. The last time I saw both of you was at the signing of the Infrastructure Memorandum of Collaboration this past February in my hometown in New York. And as I said then, the MOC goes beyond infrastructure and economic growth. It reflects the deepening of a relationship that is more than 70 years young. Finally, I want to extend a warm welcome to the members of the high-level Philippine Trade and Investment mission who are joining us here today. Your participation in this Trade and Investment mission demonstrates that our bilateral commercial relationship has produced and will continue to produce two-way benefits for our nation. So welcome, Abu Hai. I would like to begin my remarks today by reflecting on a panel I participated in back in April on the West Coast. The panel was part of the Milken Global Conference and the title was, Is the Pacific Future Happening Now? Obviously, a major reason for the increased attention on this part of the world is the President's Rebalance to Asia. And the reason I chose to start my remarks today here is because the U.S.-Philippines commercial relationship reflects precisely why the U.S. Pacific, by the Pacific future, is indeed happening and why this administration is so invested in the rebalance. I think this becomes clear when we take a look at the ties between our markets, our public sectors, and our populations. So first, our market to market ties. Over the past 15 years or so, we have collectively faced some tough challenges, a profoundly more competitive global economy, a series of natural disasters suffered by your country, and of course the worst economic crisis since the Great Depression. But over time, our market ties have emerged bearing real strength. This is evidenced by GDP growth in the Philippines estimated to exceed 6 percent in 2015, far ahead of the global growth rate. We also see this strength in the fact that the two-way trade in goods last year was at its highest peak since 2001 at $18.5 billion. That U.S. goods exports reached their highest level since the year 2000 and that our current FDI position in the Philippines is just under $4.5 billion. The importance of strengthening these ties is precisely why Secretary Pritzker led a delegation of American business leaders to Manila around this time last year and why we organized a healthcare and medical trade mission this past February and why we are going to increase the size of our commercial service presence in Manila. Finally, as we work to reach a conclusion to the negotiations of the Trans-Pacific Partnership, I should emphasize that this is an open agreement. There will be opportunities for interested countries that are committed to meeting the high standards of TPP to join in the future and that of course includes the Philippines. Second, our government to government ties. That includes the MOC I mentioned earlier, which will make it easier than it has ever been before for U.S. firms to be made aware of infrastructure project tenders, particularly SMEs. Our G2G ties also include the Partnership for Growth or PFG. Under PFG, our governments are working together to help the Philippines achieve sustained inclusive economic growth and to place the country where it deserves to be amongst the highest performing emerging markets in the world. And the gains we have made under PFG have been remarkable and real. They include considerable progress on workers' rights as well as actions to strengthen and expand bilateral agricultural trade, notably for our meat and vegetable exports and your fruit exports. But maybe the best example is in our collective work under the banner of APEC. We of course look forward to what will be an important and fruitful CEO forum in Manila this November and it is clear that the Philippines has utilized their host country status to fully embrace a leadership role under the APEC banner. Perhaps the clearest example of that leadership is the Philippines efforts to integrate SMEs into the regional and global economy. And a strong example of that leadership was the Barakai Action Agenda that emerged just last month. This action plan is not a list of lofty principles. It is a roadmap comprising clear priorities, policies and specific deliverables, whether it is advocating for streamlined customs and rules or automated solutions to increase efficiencies. Promoting finance mechanisms and increased institutional support for SMEs or exploring concrete ways to increase the number of female-led SMEs. This is precisely the type of action plan or roadmap that leads to an environment for growth and prosperity. And it is a roadmap that is guiding our G-G collaboration currently. That includes the APEC global supply chain that we recently held in Atlanta with participants representing all 21 APEC countries, economies and panels addressing supply chain management, cold chain storage and related technical regulations. This was both a successful convening and an achieved deliverable under the Barakai Action Agenda. Within the APEC SME working group, our two economies have also worked on advancing business ethics among SMEs. That work led to 19 new industry ethical codes across nine separate economies. And we have also worked together to reduce barriers to digital trade. At our working group meeting in Atlanta this month, the Commerce Department proposed the development of a digital economy action agenda. We believe this framework will help SMEs utilize e-commerce platforms, internet-based systems and other aspects of the digital economy to globalize their businesses. The comments period in fact closes tomorrow, so we are all looking forward to working with the Philippines on our next steps together. Finally, our G-G work was also seen in the effort to bring about a successful conclusion of the trade facilitation agreement negotiations. This was an essential goal since the OECD estimates that for every 1% reduction in global trade costs, global incomes increase by $40 billion. Of course, the Philippines is currently chairing the WTO Preparatory Committee on Trade Facilitation. So this is just another example of our two countries working together with the Philippines taking on an essential leadership role. But leadership requires more than being a change agent for the region your nation is part of. Leadership also requires being a change agent for constructive progress within your own country as well. That is why we applaud the Philippines in making the important advances in IPR protection and enforcement, which led to removal from the special 301 watch list. But there are still opportunities for the Philippines to show this kind of leadership. Prior to coming to Congress, as was mentioned, to lead the ITA, I spent almost 30 years in the private sector building and guiding a successful investment bank in New York. At the core of my work was identifying attractive market opportunities for my clients. And having worked with a large and diverse set of clients in my career, I can tell you that all investors look for the very same things, ease in doing business, a clear commitment to rule of law, sound IPR protection that secures and incentivizes innovation, transparent and predictable markets, and public sectors that act as engines for growth and prosperity. That is why we are ready to work with you on the progress you have already made. That includes helping establish a regulatory framework that encourages and incentivize foreign private sector participation, and working to establish value-based procurement practices that utilize lifecycle cost analysis and best value determinations. Finally, there are the people-to-people ties. Just yesterday, I attended a meeting of the U.S.-China Strategic and Economic Dialogue where our Vice President delivered remarks, and I think his words say it best. 7,632 miles of our shoreline breaks on the Pacific Ocean. We are a Pacific nation. Last year, President Obama extended that sentiment with regard to the Philippines. He said that between our peoples, we feel a spirit of Kalaoban that expresses itself in so many ways. That spirit makes sense given the way our people mutually enrich each other's lives every day. 350,000 Americans reside in the Philippines today, while roughly 600,000 U.S. citizens visit the country each year. On the U.S. side, approximately 4 million people of Philippine descent reside here, and more than 160,000 Filipino-owned businesses produce growth and prosperity in our economy every day. The depth of those ties is also reflected in how we have lifted each other during the worst of times. In the beginning of my remarks, I stated that the relationship between the U.S. and Philippines is now 70 years young. And as the delegations here today know, that number was not chosen randomly. As President Obama and Aquino acknowledged last year marked the 70th anniversary of the battle of Leyte, which signaled our collective fighting in World War II. Americans and Filipinos fought side by side to stave off the scourge of global fascism and to liberate the Philippines. And today, American and Filipino World War II soldiers share the same burial ground on the same island nation. And so you can draw a clear, bright line between the battle of Leyte 70 years ago and our work to help the Philippines recover from Typhoon Yolanda. The $90 million in humanitarian aid, the 55 metric tons of food assistance, the emergency shelter materials for 560,000 families, or the restored functionality of the Tacoban municipal water system that brought clean water to 200,000 people. All of this is to say that our commercial partnership reflects more than the convergence of our markets and our public sectors. It represents the culmination and continuation of a deep and profound people-to-people relationship. Given all this, it makes sense that discussing the U.S.-Philippines commercial relationship invites a larger discussion on the rebalance. Our commercial relationship has meant more than the exchange of goods, services, and financing between our two countries. It has been an engine for and a product of a partnership that has resulted in mutual prosperity, increased security, and diplomatic strength. So in fact, the U.S.-Philippine relationship is more than a building block for the rebalance. It can be seen as the predecessor for this very rebalance. Our commercial relationship proves that the U.S. engagement with our Pacific partners can help Pacific nations secure our mutual interests, our commercial, diplomatic, and strategic interests. I look forward personally to continuing this in this tradition, and I look forward in working with all of you to do just that. Thank you for having me, and thank you for listening. Thank you very much, Mr. Undersecretary. Great opening to our conference. I'd now like to introduce our keynote speaker, the honorable Greg Domingo, the Secretary of Trade and Industry of the Philippines. Now, just to date myself a little bit, I think I first visited the Philippines in 1986. There was a lot going on in that year. Even then, I knew about a young leader, Wharton trained. I think you're an Ateneo. I better get that right, because if I'm wrong about the Ateneo graduate, who was a leader then in many Philippine companies, he worked also in the United States, in our financial sector, everywhere from Philadelphia, Pittsburgh to New York in leading investment companies and in banks. Then he went back to his country and started to take an active leadership role in economic management of the Philippines, much like Ambassador Cuichu did when he led the country's central bank. But Greg Domingo is a real patriot. If you think about leadership in the Philippines, he led the Board of Investments. He served as DTI or Department of Trade and Industry Undersecretary for the industry and investments group. Anyone who's had anything to do with understanding where the Philippines journey has been and come on the economic side knows that this man was exactly the right choice to lead the Department of Trade and Industry. I would say the results that we've heard about already show that. That's my true honor to introduce our keynote speaker, Greg Domingo. Mr. Secretary. This is a tall mic for me. Thank you very much, Ernie, for that wonderful introduction. Let me just greet my Ambassador, Ambassador Cuichu. Of course, Ernie Bauer from CSIS. We have Secretary Singson of the Department of Public Works and Highways, Ms. Karla Hills, ex-USDR, a good friend, Matt Bond of the Millennium Challenge Corporation, and other members of the Philippine delegation, the Executive Director of the PPP Center, COSET. Where are you, COSET? Okay. And Undersecretary Tia Milam Cauca on the Department of Transportation and Communications. Ladies and gentlemen, good morning. I arrived here yesterday afternoon. I was met with a hot blast of air as I got out of the train station. And then afterwards, thunderstorms, and I said, that feels like home. I'm here today really to present to you this morning some of the wonderful things that are happening in the Philippines, in particular our growth story. But since Undersecretary Selig, who had to leave already, mentioned a little bit about APEC. I wasn't planning to discuss APEC. I just want to start it off by saying a few words about our efforts on SMEs and APEC because this is one of the core issues and topics that Philippines, as chairman of APEC this year, is pushing for. And Undersecretary Selig mentioned the Barakai Action Agenda for SMEs. Actually, it's MSMEs because we inserted the word micro. So it's micro, small, medium enterprises, which we called for short MSMEs. We coined that term at Barakai, which was held in the Ministry Responsible for Trade, was concluded last May. And the Philippines presented an action plan for MSMEs. It's not a dream. It's very specific things, action steps that we want to push through. And we Philippines presented this as a skeleton to the body and there was broad and deep support for it. And I'm very happy to hear that the Department of Commerce fully supports this initiative. The logic behind this is that for the longest time, for decades really, that we have progressed on the global trade agenda. But a lot of the policies, the rules and regulations that govern global trade today, whether it's WTO, ASEAN, or the other regional trade agreements, the benefit has mostly been directly been addressed to the large companies. And that's not by design. It's by default. Just because in the discussions that have ensued in the global trade fora, a lot of these small guys were not represented, in particular the micro and small. So what has happened is that global trade, in terms of pushing forward the liberalization agenda, has been basically stopped because there's significant opposition now to furtherance of liberalization, trade liberalization. And because aside from the traditional opposition for global trade, which are, we're coming from the farmers first, then of course you have the domestic vested interest that's always there. But now, adding to this is a growing voice from the micro and small enterprises. And you cannot blame them because the micro and small basically say they see the entry of products from other countries, but they themselves cannot avail of the FDAs because of the very cumbersome rules and regulations that make it difficult for micro and small enterprises to participate, talk about rules of origin and customs regulations, et cetera. So the Boracay Action Agenda is an attempt to make the benefits of free trade felt by the micro and small enterprises. Okay, so I'll stop there because I can go on for another hour discussing this topic. Let me go on now. From the time President Aquino took over the reins of government five years ago, our country has experienced remarkable growth. We have averaged over the last five years 6.3 percent GDP growth. And this performance assumes added significance when viewed against the backdrop, the global economic slowdown that has been seen during this same period. And this accomplishment was not due to chance, but really as a result of hard work and unity of purpose. Heading the call of President Aquino for Transparency and Good Governance, the government and the private sector were jointly together to create an enabling business environment in the country more competitive. These efforts together with other reforms did not go unrecognized. So during this period the Philippines improved its rankings on many fronts. And I will just mention a few. We improved 53 places in the World Bankies of Doing Business Rankings during this period. We improved 33 notches in the World Economic Forum's Global Competitiveness Report. We improved 49 levels in the Transparency International's Corruption Perception Index. We improved 39 steps in the Heritage Foundation's Economic Freedom Index. And during this period as well, all three major credit rating agencies, Fitch, Moody's and S&P's, have elevated the Philippines to investment grade status. The strong economic performance and improving competitiveness have been supported by many factors. One, tax reform. We've had tremendous tax reform in the Philippines, which has resulted really in the growth of our tax revenues, double-digit growth of our tax revenues since the administration started. This growth is every year, okay, double-digit growth. We're resulting in a deficit to GDP of less than 2%. Our target is actually 2%, but we're having a difficult time spending all those additional tax revenues that are being generated every year. And then we had tremendous reforms in the government procurement, especially in the area of Secretary Singson, who does all the roads and bridges in the Philippines. And tremendous savings have been realized because we have shifted basically to public bidding for all of the projects of government. And this has resulted in tremendous savings. We've continued to liberalize in a very big way. And just last year, as may have been mentioned, is that we, or you may already know, is we liberalized banking again, so opening it up to foreign banks to enter the Philippines. We are in the process now, final stages of allowing foreign contractors to be 100% owned, I mean to have 100% owned operations in the Philippines. We have just released the foreign investment negative list, and we've reduced the list drastically, particularly in the practice of professions. We are about to pass a revised cabotage law that will allow foreign ships to call on multiple ports in the Philippines to so that we can lower our logistics costs. Philippines no longer really has a state-owned enterprise problem because we've sold off, privatized most of that, starting in the mid-90s. And then we continue to push for our economic zones. In particular, the economic zones in the Philippines are very business-friendly. So 80% of our manufactured exports actually come from the economic zones because it is very easy to do business in our economic zones. It's first-world type of schemes and practices there. The economic zones, you do not even have to deal with the local government if you operate in economic zones, you just deal with the administrator. But really our greatest asset is our human resources. We have a population of about 100 million with the median age of 23 years. So half of our population is 23 years old and below. And based on the list that I've seen, somebody has to check it because there might be a really small country with the lower. But based on a very comprehensive list I've seen, Philippines is the youngest in Asia. And these young people are well-educated, highly-trainable, hard-working, loyal, and English proficient. This has made possible the phenomenal growth of our outsourcing, business process outsourcing industry, which we started about 5,000 workers in 2000, about 15 years ago. Last year we surpassed a million direct jobs in this industry. And it's still growing at 15 to 20% per year. And this industry has provided the construction boom in the Philippines. It's one of the main reasons. Because each body that is hard by this industry, just imagine 1 million bodies over the last, workers over the last 15 years, that's 5 million square meters of office space. Plus all these new residential units that they have to purchase because these people are paid way above minimum wage. They're able to afford cars and houses and appliances. So car sales are up 27% in 2014. This industry accounted for $18 billion of revenues last year. Of course, we have a fair amount of Filipinos as well working abroad, about 10 million of them. It's about one-fourth of our workforce, works overseas. And they work as doctors, nurses, architects, engineers, accountants, teachers, mechanics, e-farers, and all sorts of service staff, providing cash remittances in excess of $25 billion in 2014. Now, these young people we have, right, to realize the demographic dividend from our young population over the next few decades. The Kino administration is heavily investing on education and infrastructure. So it's one of the ingredients to make sure that you have strong economic growth for decades to come, the young population. But that's not sufficient. It's necessary, but not sufficient. Those who are in mathematics can understand that. To make it sufficient, you need to educate them so that when they get to the working age, they can find good and steady jobs. And so the government has invested heavily in education. We have doubled the education budget from 2010 to 2015. So that classroom textbook and teacher shortages have been addressed. We have also restructured our primary and secondary education by passing a law that makes it from 10 to 12 years to align it to the international, general international practice. And we have aligned course offerings in higher education to industry needs. This trust has been complemented by a significant increase in the budget for technical vocational training, which is up over 80 percent over the last five years. The second component of ensuring long-term economic growth is investment in infrastructure. And the Kino administration has also done this. We have, from 2010 to 2015, the Kino administration has more than tripled the infrastructure budget. This is just the on-budget items. This does not include the PPP projects which are above or beyond the budget because they are privately funded. So it was mentioned already by Ambassador Quisha that we target from 2.5 percent of GDP infrastructure spending as a percentage of GDP, 2.5 percent in 2010. We're going to target 5 percent by next year. We're already at 4 percent this year. And more to come on this infrastructure. We're really spending, trying to devote a lot more spending on infrastructure. These are some of the primary factors contributing to the Philippines success. But that is not all. I will add some more. We have a diversifying manufacturing base. In fact, we used to be dominated by electronics products up to about 70 percent of our total exports were in electronics products before. Now it's down to 50 percent because we have increased the product range that we have offered. This would include, for example, our exposure now to the aerospace industry. I think very few people know this, that the Philippines actually is part of the aerospace supply chain. We have affirmed there that supplies flight control systems to the biggest manufacturers, the Airbus and the Boeing. We produce galleys in a very big way. One of the biggest suppliers in the world is based in the Philippines to supply the galleys and then the toilets. And now we're starting to supply the flooring. And then we now manufacture a lot of medical devices. We do a lot of projects now on large scale steel infrastructure. These are oil and gas platforms. These would be parts of petrochemical plants that are modularized, built in the Philippines, then shipped out and assembled to the final destination. We do bike parts, carburetors, anti-lock brakes for the world's biggest car companies. And then we also have a diversifying services base. Again, I think very few people know Philippines is becoming an MRO hub, maintenance repair operation for aircraft. We service up to the biggest aircraft like the A380s. And we have two big ones in the Philippines that are doing it. One is the Tansu technique, the other one's Singapore Airlines. But Airbus Helicopters has recently put up a servicing also for Airbus Helicopters in the Philippines and some more putting up as we speak. We are in our back office processing. We do service a lot of the global hedge funds in terms of their back office requirements. We do a lot of SAP programming. We're talking about tens of thousands of SAP programmers in the Philippines doing for the international market. We do global consolidation of financial statements for some of the world's biggest financial institutions. And we manage the logistics of a very big European oil company, global oil company, but their logistics operations in Europe are done out of the Philippines and more. The other development recent that I would like to just do a few more points and then I will conclude is Philippines was granted by the EU, by the European Union, GSP plus status last December 25. So it was a Christmas gift to the Philippines. Just like the GSP here in the U.S., which I hope will pass soon, Europe has a GSP and a GSP plus. The GSP status in Europe, in the EU, gives you about 2,000 plus product lines of duty-free access to the EU. The GSP plus status gives you 6,000 plus product lines of duty-free status, about two-thirds of all their product lines, and they don't ask anything in return for that. And in East Asia, Philippines is the only country that has the GSP plus status. So what does this mean? So for U.S. firms wanting to set up a manufacturing base in Asia that will service the ASEAN and the EU market, Philippines would be an ideal location to put it in place because we have duty-free access to ASEAN and the EU. So that's very unique to the Philippines. And then my second to the last point. There is a study by HSBC that was released two or three years ago that they project the top economies of the world by 2050. And in that study, they showed the Philippines basically improving from 38th place in at the time they did that study to 16th place, 16th. So they project that the Philippines will be the 16th largest economy by 2050. And if you look at the top 15, there is no other ASEAN country there. So they're saying that the Philippines will be the largest ASEAN country by 2050, bigger than Indonesia, Singapore, Malaysia, Vietnam. So I think that says a lot about the future of the Philippines. And then finally, I just want to state that yes, we are very much interested in joining the TPP. It seems like there's some confusion on where the Philippines stands on this issue. As early as 2011, I already issued a statement to the media that Philippines would like to join TPP. And since then, the president himself has issued several statements of the media saying we would like to join TPP. But for some reason, it's being filtered. So when it reaches here, it's not clear that we want to join TPP. So I want to state it clearly and equivocally that we want to join TPP. So I thank you for that and have a good morning. Whoever's live tweeting this has got that one because that's important. And the context is just right. We're, as you know, I think we'll have TPA passing in the Senate here today. And that will be very good news, I think for the United States and certainly for the Philippines and our TPP partners. I'd like to open up the floor to a couple questions in just a minute. My colleague Matt Goodman, who's our Simon chair for political economy at CSIS, and came to us from the White House where he was the Sherpa for APEC and EAS issues. So Matt knows these issues very well. Matt will bring a panel out. And Secretary, I think you're on that panel too. So people have another chance to ask questions. But I can take a couple of questions before we start. And if you're on this side of the room, raise your hand high so I can see you over the side. Right back here, I think that's my friend Butch, but I'm not sure. Here's a question for Secretary Domingo. Could you just identify yourself? Yes. My name is Patrick Ferraran. Oh, Patrick. Yes. I'm actually with the Bohol Reservation Group. My question is, while it is very ambitious to also be part of the TPP, the Philippine Constitution seems like it's an impediment to that directive. So how are you going to make that happen? And how soon do you think the Philippines could join the TPP? Thank you. Well, when it comes to constitutional amendments, it's very difficult to make a prediction. I think nobody really knows if and when that will happen. There was an attempt in Congress, actually, to modify it. But as of last week, the House Speaker said that they don't have enough votes right now to make it happen, but there will probably be another attempt later this year. But having said that, I think that the Philippines, if you look closely at the restrictions in the Philippines, it's actually, how would I say it? Relative to the SOE issue, state-owned enterprise issue, which some members actually of the TPP already have that problem, I think our problem in the Constitution is much less severe than the SOE issue. So I'm just saying that if SOE is acceptable and they're given a timeframe to solve it, then I think the Philippines should be also given that leeway to have time to try to remedy that situation, whether legally or, I mean, through law or through the constitutional change. Good question. This gentleman here in the green shirt. The microphone's coming to you, sir. Microphone there for you. Okay. Thank you. Good morning, Mr. DuLingo, Secretary DuLingo. Thank you for giving us the wonderful news about the Philippines economy. However, in all the reports I've been reading about economic growth and how to sustain it, nothing has been mentioned about this, the growth of the maritime industry in the Philippines. Dearing in mind that because of its geographical location, sustaining economic growth will go on and on, also with the growth of the maritime industry. Has there been a long-term strategic and plan for modernizing and creating more poor facilities in all over the islands? Yes. Actually, later in the session, the head of the PPP Center is here, as well as Secretary Singson of DPWH. I think they can provide you with the list of projects, in particular on the port side. But as I mentioned earlier, the, yeah, also a team, sorry, Yusek Lemcao is also here of the OTC. So they have a complete list of the airports and the port projects that are right now being considered or about to be bidded out. But we are addressing this issue. But I mentioned earlier that also the Cabotage Law actually is, our bill, is about to become law, I think, because if I'm not mistaken, it already probably passed the bi-cam. So it will be soon submitted to the president for his signature. I have to check whether it passed the bi-cam, but the last, when I left the Philippines, it was being, it wasn't bi-cam already. So that will allow foreign vessels to call on multiple ports. So that will drastically improve the efficiency of logistics in the inter-island shipping. Other questions for Secretary Domingo? I just wanted to ask one more before we switch to the panel. And that it's sort of the link between economics and security. And I wondered if you mentioned the TPP very clearly, without no doubt about the without, no doubt about that. But there's another agreement that the U.S. and the Philippines have that's sort of in the Supreme Court now called the Enhanced Defense Cooperation Agreement, or EDCA. I know you're the trade and industry secretary, but I wondered if you could tell us where you think the EDCA stands and how do you think about it from an economic manager's perspective? I was asked a similar question in the South China Sea two years ago at the World Economic Forum in Davos. And my response was you're asking a trade minister to talk about foreign policy. So I hope my foreign minister doesn't talk about trade policy. But actually it's very hard for me to comment. Maybe we can ask Ambassador Kuisha to provide us an update. Fair enough, I'll ask him there. Thanks very much. So Ben, I think we'll take a short break here and we'll ask our panel to come up. So please join me in thanking Secretary Domingo for his remarks. My name is Matthew Goodman. I hold the Simon Chair in Political Economy here at CSAS, work on international economic policy, particularly in Asia. So this is a conference that is, I'm not in charge of, but I'm very interested in. Philippines is obviously a very important economy in the Asia Pacific and one that I'm looking forward to learning even more about today. We have a terrific panel this morning to deepen the discussion that you've already heard about the Philippines economy and investment opportunities in the Philippines. We're later going to have another panel diving more into the infrastructure questions, but no doubt we're going to touch on those here as well. I am not going to introduce our panelists in depth because I think you're more interested in hearing from them than from me. You have biographical packages so you can study their backgrounds in more detail. You've already met Secretary Domingo and I'm going to give him the floor after the other panelists have talked to see if he wants to add anything to elaborate on things that have been said by other panelists. But I'm going to move through the other panelists. On your right of me, my left is Bill Luz. Guillermo Luz, it's listed here, but he prefers to be called Bill. He is the Co-Chairman of the Philippines National Competitiveness Council and you're going to hear more about what that is and what it does and its mission in a minute. So Bill will go next. And then Andres Glusky, who is the President and CEO of AES Corporation, which is, as everybody knows, a leading IPP, an independent power producer, which has a big investment in the Philippines. And so we're going to hear about AES's experience on the ground in the Philippines. And then Matt Bond, who is a Vice President at the Millennium Challenge Corporation, he is the just returned or recently returned Philippines Country Director for the Millennium Challenge Corporation, the compact that MCC did in the Philippines, which is still underway. And so we'll hear more about that. And so with that, I will let the panelists speak. I may ask a question or two, and then I want to open up the floor to discussion. So with that, Bill. Thank you. Thank you, Matt. And good morning, ladies and gentlemen. My name is Bill Luz. I'm the Private Sector Co-Chairman for the National Competitiveness Council. And just to give you a brief introduction of the Council, it's a government-created Council, but half of whose members come from the government, and the other half from the private sector. Secretary Domingo is the Chairman of the Council, and I serve as the Private Sector Co-Chairman for the Council. And as the Secretary already mentioned, well, our job is to build up the global competitiveness, ranking and position of the Philippines across global tables, which measure anywhere from 145 to 190 economies around the world. So that's pretty well 99.9 percent of global GDP measured in these reports. And we track 12 different competitiveness indices, all of them global, and we use that to benchmark the country, to use it as our diagnostic tool for figuring out what to fix within the country and to improve the country's overall competitiveness and its environment for doing business. So as the Secretary mentioned, we've already moved up in a big way through many of these global rankings. In the IFC ease of doing business report, we're up 53 positions in the last four years. In the World Economic Forum Global Competitiveness Index, we're up 33. For the Transparency International Corruption Perceptions Index, we're up 49. For the Economic Freedom Index of Heritage Foundation, we're up 39. For the Global IT Report, under the World Economic Forum, we're up 10. For the Travel and Tourism Report, also under the World Economic Forum, we're up 20. And for the Global Enabling Trade Index, we're up 28.  So my main message is really how did this happen and why do I think it's going to continue to happen beyond this administration? The first is that there's been a great deal of public-private collaboration as far as the Council is concerned. We work closely public and private sector with through all our working groups and all our regional competitiveness committees, which are the sub-national level committees, and through all our task forces. Each of our groups are chaired by public and private sector representatives, and the membership is roughly 50 percent public and 50 percent private. So there's a great deal of interaction and collaboration that happens all of the time. So I think that's the first characteristic that has brought us some success. The second is that we work across the national agencies, a wide range of them. So as an interagency body, we work across all agencies of government, including the Office of the Ombudsman and the Supreme Court for issues that concern judiciary and governance, for instance. And governance is a big part of what we do. We also happen to work through local government units, because we view local government units, the cities and municipalities as the building blocks of national competitiveness. So we work across many local government units. And finally, we focus a lot on governance and performance metrics and benchmarking across all the indicators and comparing against groups of countries, but mainly against ASEAN, which is the arena we work in, and which happens to be one of the most competitive regions in the world. So it is a particularly tough region for us to operate in, and we had a lot catching up to do. When we started work together in 2011, when the current council was reorganized, we were in the bottom third of the world across most of these rankings, and we were dropping. We've moved up into just above the median, and our goal is to move to the top third by 2016, by the end of this administration. So we are in the right trajectory, and we should be in the top third by next year. Some of the projects are focused on things like the ease of doing business. So this is important. If you want to attract investments and to build up small and medium-scale enterprises and micro enterprises and startups, we needed to smoothen out and streamline ease of doing business, so that we have done. On the governance front, we've worked with national and local agencies to put them on balance scorecards, so management tools that make them more effective agencies, delivering their strategic plans and operating plans, and making them a reality. This year, about 15 of these agencies, including the Department of Public Works, will be externally audited by audit firms that the NCC will be engaging for this purpose. So it's no longer self-disclosure, but they will be audited. Department of Trade, Department of Public Works, Department of Health, Department of Education, are just among the agencies that will undergo some of these audits. And finally, I want to stress that those of you who know the Philippines might think normally of just Metro Manila or maybe Cebu, but we felt that we needed to have a lot of local government engines working here. So we've created a ranking system for city and municipality index. Three years ago, we ranked 285 cities and municipalities. Last year, we ranked 535 cities and municipalities. This year in July, we're going to announce our ranking for 1,098 cities and municipalities. So now businesses will have a better basis for determining where they want to locate their businesses, because we're not judging them based on perception or survey, but we've collected a massive amount of data on each of these places. So we have the metrics on each of these cities and municipalities, and now we'll be able to rank cities, municipalities, and provinces. So let me stop there and answer a few questions later on. Thanks. Thanks so much, Bill. Really very clear, very concise, very concrete and helpful to those of us who aren't following those issues as closely, and I think really an impressive series of data to work with. So really appreciate that. We'll come back to that. Andres. Well, it's really a pleasure for me to be here today and be able to share AES's successful experience in the Philippines. To give you a little background, AES is a Fortune 200 company. We have about $17 billion in revenues a year. And when I came in as CEO, we were in 30 countries. And one of the things I decided was that we really had to focus on those markets which were really most attractive for us. So today we're in 18 markets. And those markets where we're in today, we want to grow and deepen this relationship. So one of those countries we decided we chose to stay in and to grow was the Philippines, because we think it had a very attractive set of circumstances. The first, as a U.S. company, I don't think there's a more welcoming country for U.S. investment than the Philippines. And there's a lot of shared cultural norms and perceptions. So it's an easy place for us to do business. So our first big investment in the Philippines was a thermal plant in Luzon. And we invested about $1 billion in this plant. And it was a privatization. And it needed a lot of fixing up. And it took us about a year to really get this plant fixed up. But what it tells you about the quality of the Philippine labor force, because we did this mostly with Philippine labor, it won a number of awards. It won the, in the U.S. we have one award we give a year from the Edison Electric Institute. From all international companies which had the sort of most improvement and best performance. And our Philippine operation won this in 2011. And it went on to win three or four more awards in Asia as well for excellence of operations. Then furthermore, we were happy with the experience. We moved our headquarters, our Asian headquarters from Singapore to Manila. And we were able to find the very skilled people that we needed. I mean, U.S. gap and local gap and all the translations, sophisticated financings. And we're very happy with that. With having moved our headquarters to the Philippines. And it's interesting. When we first went into the Philippines, and it was privatizations, and this was back in 2008, they were liberalizing the electric sector. Not all the reforms had happened. So part of this was betting on that the reforms would happen to liberalize the sector. And I'm happy to say that most of the reforms took place. And that's very important for us. Now, this I think is the energy is a very important component of the economy. It's a leading indicator. The Philippines really needs probably to grow about five to, could be higher, eight to 10 percent of energy per year. One of the things that, so this is an excellent market for us. So we're thinking actually of doubling our investment in the Philippines in the thermal side to be able to meet this demand. And there have been some comments about the banking sector. We've been able to find ample financing in the local banking sector. We also get multilateral loans from people like the Asian Development Bank and the IFC. But you do have a healthy and vibrant banking sector in the Philippines. Now, we're also looking at doing more renewables into the Philippines, in line with the government's policy. And we're the world leader in the use of lithium ion batteries. You may have seen the announcement by Tesla in the last couple of months. But we've actually been doing this for eight years successfully. We've been doing it in the U.S. We've been doing it in Chile. And using these lithium ion batteries, what it permits you to do is put more renewables on the grid. And this works particularly well than islands or, let's say, isolated grids. So this would be perfect for the Philippines. And that's one of the things that we very much like to do it. Because given just natural geography, Philippines could be one of the world leader in this. And it could have more renewables and more stable grids on the separate islands and more resilient to storms and the like. So I think that, again, this has been a very happy relationship with the Philippines. Like all relationship nothing, it's always 100% perfect. They're issues to overcome. But certainly the movement's in the right place. Philippines has been a very welcoming place. The government and the embassy here has been extremely helpful whenever we've encountered problems. And again, coming from a company which has worked probably in 50 countries, I can think of very few examples where it's been more welcoming. And also I think what the country needs fits us very well. But also we found it very receptive to sort of corporate social responsibility programs. We have programs that go from potable water to rescuing reefs, etc. And we found very good organizations in the country from which to work. So that's really where I'd like to sort of leave the remarks that we're very happy that we went to the Philippines in 2008. We're very interested in investing more in the Philippines. And continue to contribute to its development and progress. Thanks. Excellent. Thank you, Andres. And I'm really pleased our panelists are following the instructions of keeping brief because it's really, it's actually important for all of you to join in this conversation. And I appreciate the brevity, but also the clarity of all these comments because you're getting a very rich sense of what it's like on the ground, particularly for a company like AES. So I appreciate that. Matt. Good morning. Very nice to be here this morning. Good to see Ambassador Cuisia. I had the privilege of being in the Philippines for about four years, returning last year. And I was reflecting a little bit on bridging some of the public and private sector comments here. So Millennium Challenge Corporation is a U.S. government foreign aid agency. But we have a very laser focus, and that's on reducing poverty through economic growth. And you're going to hear me talk a little bit about what we're doing in the Philippines. And instead of using the term aid, I'm going to talk about it as an investment, an investment in the future of the Philippines. It is grant assistance. It does come from the American taxpayer. But as a government, we very much cherish and view this relationship in partnership with the Philippines as a key part of accelerating growth, reducing poverty. I wanted to focus on three things. So in 2010, we had signed a compact. A compact is a five-year partnership that outlines a series of interventions or investments in areas to unlock growth and to reduce poverty and to achieve, hopefully, inclusive growth. So our model is very unique in that, number one, we only work with countries that are committed and dedicated to good policies and to developing an enabling environment for the private sector. So just to underscore, you've heard all of this fabulous movement on the data. For MCC, we have a scorecard that we release every year. And just to give you a sense, the Philippines, in fiscal year 2012, moved from being a lower income country in our pool of measurement to a lower middle income country. So think about it, moving up boxing weight classes. So it gets a little bit harder. The punches are a little bit tougher. But what's interesting is, is despite this movement into a tougher group, peer group, the Philippines has showed dramatic improvement. And I want to highlight one particular area, and that is control of corruption. And I really want to applaud our colleagues here and the leaders here. Bill, Secretary Singsong, Secretary Domingo, Ambassador Quecian, lay over here. Because it's remarkable to see that since 2012, they were ranked as in the 24th percentile on control of corruption. And over the last three years, they have moved to 61 percentile. So it's one of the most dramatic improvements that we've seen in our portfolio of a country committed to control of corruption. And we all know that without a transparent, open market, it's very difficult to achieve the kind of growth, sustained growth. So I congratulate the Philippines and the leadership for that. To me, that is an important area. We signed a compact, it was $434 million over five years. And it had three interventions. And back to this first comment about the enabling environment, the first one was about reforming, doing tax administration reform. So expanding fiscal space. And I was glad to hear Secretary Domingo's comments about the additional revenue collection that's happening. And so we've been very pleased over the last five years to see tax administration be more effective, more efficient, and at the end of the day, generating more fiscal space to make investments in infrastructure and social services. The second area is infrastructure quality. I had the very humbling experience to fly into Taclovan two days after Typhoon Haiyan struck. And to witness the devastation, half of our $434 million are focused on that region. But what was most striking to me were the months that followed to see the resilience of the local governments, of the local economies, of the micro and SME, and the big partners and investors to rally around and rebuild. We are constructing 222 kilometers of road in that area. And just to give you a sense, partnering with Secretary Singson and his group, we put a real focus in climate resilient design. And so it's not that more infrastructure, not only is more infrastructure being built, but the quality of infrastructure is going up. In a country that has 30 typhoons a year, this is critical. So we were pleased to see that because of the great partnership with Secretary Singson and his team, very little of our road was actually damaged, some of which was under 10 feet of water, if you can imagine. And so that's a great highlight and an area of focus. The last area, while Philippines continues to grow, which is remarkable and the private sector grows, I know that the government and both the Philippine government and the U.S. government is focused on making sure that growth is inclusive. And so we undertook a project with the Department of Social Welfare and Development funding, which was also something that the World Bank was working on called Kalahi SIDS, which is basically going out to local communities and working with them to teach them how to identify, design, and implement small-scale infrastructure projects on their own. So not only are we working with the Philippine government and will actually leave behind approximately 3,000 small-scale infrastructure projects, but to me that's the gravy. The real power is leaving behind local communities and local governments who understand how to transparently and efficiently manage public resources so that we can, at the end of the day, work ourselves out of a job, which is MCC's focus. We hope to be a spark for the country and then eventually go away and reduce the need for foreign aid and let the private sector take its role. So I think it's a great story on the policy reform enabling environment, on improving infrastructure quality, and then hopefully decentralizing some of the capture of the private sector and government resources so that growth can be inclusive and sustainable over the long term. And just thrilled to see Philippines has been one of our best partners, I'm glad to say, and we are actually currently working on a subsequent partnership that we'll look at some other areas where there are constraints to growth and poverty reduction. Thank you. Excellent. Thank you, Matt, again, for a very clear and concise presentation and, again, lots of food for thought. So Secretary Domingo, would you like to say anything to supplement or comment on anything anyone else has said here? You're okay, so you'll be willing to take that in question. Well, let me ask you a question then to get started. I said I want to bring the audience in, but I can't resist asking a couple of questions. I mean, again, I have worked on the Philippines on and off in my career at the U.S. Treasury and the White House and coming back to it and sort of preparing for this conference and realizing how incredibly how much progress has been made. I ask myself sort of what do you think is the key factor? If you could point to one thing that is responsible for the improvements across the board in the Philippines economy and your growth rate and your investment climate and any of the things that we've been talking about, what do you think is the key? So that other people interested in development, interested in other parts of Asia that are struggling with some of the same issues, what do you think is the key to success? Well, it was started by good governance. Yeah, hello. Yeah, there we go. Yeah, it was started by good governance, but really the key is our human resources. It's all these young people who speak English are quite well educated and very loyal. That's why it's no accident that a big part of our workforce, about one-fourth, they work overseas because the Filipinos can communicate and adapt very well and they integrate into the societies where they are hosted. So that really is the key to the growth that we've seen. Okay, excellent. I'm going to let you think about a question about TPP, but I'm going to come back to that in a second. But let me ask Andres, you mentioned in passing that it's not a perfect relationship and there are issues, put it in a positive way. What would, in your view, make the Philippines an even more attractive investment destination for you or other companies? I think some of the things that have been mentioned, I think what Bill is working on in terms of streamlining procedures and what Secretary Domingo mentioned as well, there's room for improvement there. I mean, for example, to build a new power plant, you need 110 permits. So that takes time. And by world standards, that's world-class too. I mean, most places it's more like in the range of 50. So some streamlining of the, to, for example, finalize liberalizing the energy markets. But some of the very positive things, for example, have been the anti-monopoly law. You have a more level playing field. So they have more competitors. That's very good. So I think that the other key is to have that, the kid continue to streamline it because it's, you know, you get there, but it could be faster. And in today's market, you have to move very quickly. I would like to add just about the sort of resilience that's been mentioned. One of the things that very pleasantly surprises about the Philippines was post-2008, when you had the global crisis, the fact that the remittances remained so strong and the currency remained strong and that helped the economy remain strong, which was not what we saw in a lot of other economies. So it was very interesting how resilient the Philippine economy showed itself. Excellent. Okay. Matt, let me ask you, because you mentioned those rather startling figures about corruption. And that has been an endemic problem in the Philippines and in other countries in Southeast Asia in particular. And I mean, what accounts for, how do you move from 24th percentile to, was it 61st in three years? What's the key there? I mean, I think the obvious is leadership, which is something that I think we all in 2009, 2010 were focusing on. So having a president committed to it, not just in word, but in action, and then having a cabinet that was fiercely focused on it, I think that's one. Two is, I think that it's getting beyond the higher level of commitment and pushing down into the bureaucracies themselves is the real challenge. It starts, for example, we were working in the Bureau of Internal Revenue and the Philippines has a fantastic tax commissioner, Kim Hinaras, who is great, but preceding her, the average tenure of the tax commissioner was something like 18 months. She's going on, I think, four years now, roughly. And so finding a way to get the right leadership and then have enough sustainability pushed down in the organizations and bureaucracies, both in the processes and procedures and really in the culture. I think changing the incentive structure, looking at pay in civil service, I think is a challenge in all governments and certainly in the Philippines, something that needs to be looked at. And I also know there are several things underway, a great anecdote with Secretary Singson is when he set out in his leadership, it was to look at the bidding processes, which is where a lot of, obviously, corruption happens in most cases is in procurement and really focusing on those panels, the technical evaluation panels, making sure that they're independent, making sure that the individual sitting on them are not in positions of decision so that there's conflict of interest.  And I can't remember, Secretary Singsong, how many billions of pesos you accomplished, what was the number? Forty. Forty, four zero. Forty. Forty eight. Forty eight, so 48 billion pesos in savings. Now, the bigger challenge is now mobilizing and executing those resources. So, obviously, his challenge was, he solved one problem and then created a new challenge of having to spend it out. But I think those are some ways, again, leadership, pushing it down in the bureaucracies and the practical day-to-day, changing the incentive structures and then focusing on open and transparent and public procurements. I think Bill has done a great job in developing a balanced scorecard where they have people stand up every six months and report out on the quality of this, which was a little bit related to the MCC scorecard effort. I was going to ask Bill about that. Can you elaborate on that a little more because how does that work? Yeah, one of the problems, of course, for the Philippines was governance and could you trust agencies? So, one of the working groups we had within the MCC set up this performance governance system and deployed the scorecard, the balanced scorecard system on agencies and they came in on a voluntary basis, starting with national government agencies. Now it includes government-owned corporations and government financial institutions. Includes also the armed forces, so Army, Navy, Air Force, and has moved into the Philippine National Police and into the local governments. And it's a four-stage process by which they have to really spell out not only the strategic plan but the operating plan, make it public. And as they move up the four stages, eventually they had to also organize a governance, a multi-sectoral governance board, an advisory board. So think of it as a board of independent directors working directly with the head of the agency. And twice a year, we organize a forum where both Matt and I have sat on panels where we recruit a lot of CEOs to question the plans and the programs. And once you hit the third and fourth stage, the end of the stage, now we begin to get the external auditors on it, so it's not just the regular panels. And I must say there's a direct correlation in my mind between the star performers in the balance core card system and the way they deliver projects and register savings. And I think Secretary Sincson, DPWH, his agency is a regular top performer among the many agencies that have come to us. So I think it's an effective system. And this year, as I said, by the time we get the external auditors, this is a very new practice, I think, in the government and something that we'd like to see continue. Now, going back to what Matt said, leadership does matter. This government ran on a platform of good governance and on good governance leads to good economics. And so a lot of the effort was really focused on cleaning up these processes, procurement, budget reform, lots of transparency. So you see it, the results. And I think that that's why the numbers have moved up across a broad set of indicators. And the biggest move has actually been in the governance and counter-corruption efforts. And I think Millennium Challenge captures it, but so do many others. Okay. Very helpful. Let me just ask you one more question that I'm going to ask Secretary Domingo. Then I'm going to open it up. Of the indicators that you're tracking, which one sort of worries you the most? I mean, where do you think there is the biggest challenge for improving competitiveness and what needs to be done to address that? I would say right now it would be on science, technology, and innovation. It's the, I believe, the under-invested area for the country, only because we had to focus early on on education and improving our educational system, basic, secondary, and all the way to tertiary. And I think those basic fixes have been put in place. We've added two years of schooling, which takes effect this year and next year. So we have a full K-12 program. There are now a greater focus as well on vocational education for those who opt to get into the vocational track. So I think the next step really is going to be how to focus on science, technology, and innovation. And I think the way to do that is to not only focus on the educational system, but focus on the business sector to encourage more businesses to enter that sphere and stay in that sphere in the Philippines. Otherwise, we will train people who will just end up leaving the country. We have to provide them the career opportunity to pursue that career in innovation and technology within the Philippines. The minute we do that, then we will enter that virtual cycle. I think that is the next great challenge for us. Okay. I'm Secretary Domingo. One different shifting gears a little bit in asking about your trade policy and your integration with other markets. So you're involved, the Philippines is involved in a number of different regional economic integration efforts, APEC, which I know you addressed. And by the way, you may have addressed some of this in your remarks. I'm afraid I missed the second half because I was greeting our other panelists, but so I apologize if I'm asking a question you've already addressed. But APEC, the Transmissive Partnership you're interested in, you're in the RCEP, the Regional Comprehensive Economic Partnership. And of course, within ASEAN, you're working towards an ASEAN economic community. How do you prioritize these things?  They can all, I think, exist together. But which ones do you think are most important for Philippines continued economic progress? And in particular, obviously, I think we're interested this year in APEC. I'm a fan of APEC. There are not too many people in Washington who pay a lot of attention to APEC, but I think it's a very important forum and delighted to see the Philippines' leadership. But then moving into TPP, how do you see that as a priority for the Philippines? Okay, I think you missed the last part of my speech. I'm sorry. Where I declared that we definitely would like to join TPP. Okay. But let me... Okay, let me just describe the Philippines' trade agreements. We are members of, obviously, the WTO. We are members of APEC. Although APEC is a non-binding trade forum, basically it's a lobby group. We decide on particular issues that we'd like to have a common position, and then we lobby it at the WTO or another trade forum. We are members of ASEAN, and we only have one bilateral agreement. We've been very thrifty with bilateral agreements, and that is with Japan. Obviously, US is a very important trade partner for the Philippines. US consistently ranks either first, second, or third in both as our export market and as our import source. So it behooves for the Philippines to really have a trade agreement with the US in one way or another. And right now, based on US policy, the only way to do that is to really join TPP. And that's really where our strong interest in TPP lies, is, aside from the smaller countries, the big one there is really the United States. So now, having said that, Philippines actually is engaging now in various trade agreements. We have an ongoing negotiation with EFTA. EFTA is the European agreement that is composed of the four small countries, well, not so small. In some cases, Switzerland, Iceland, Norway, and, wait, who's the fourth? Switzerland, Norway, Iceland, and Liechtenstein. Yeah, Liechtenstein. And then we have been approached already by at least six other countries that want to do bilateral agreements with the Philippines. So we are considering that. But our primary limitation is the number of trade negotiators we have. Because between ASEAN and, well, just in ASEAN alone and APEC, that kind of occupies a lot of our resources already. So we're actually recruiting people now to be able to engage in more FDAs. But Philippines actually is, I would say, one of the most liberalized countries in Asia. If you look, we have probably the fewest non-tariff barriers. We also have been very liberal in both trade, especially in trade and goods. We're trying to liberalize trade and services as well in a big way. So we'd like really to engage more. Philippines is a very big provider of services to the global community. So we are pushing very hard on liberalizing services in all the fora that we participate in. Good. Okay, excellent. All right. I will invite questions and comments from the floor. Please wait for the microphone, which I think we have a couple of circulating. Please identify yourself and do either make a short comment or question. Yes, sir, right there. Thanks. Hi. Prashan Parmaswarn from the Diplomat Magazine. Thanks a lot for all your insights and really great diversity of perspectives. I wanted to ask how we might think about the sustainability question that Ambassador Quisha and a few others touched on a little earlier. So despite the advances that we've seen given the elections and what that might look like, I realize there's a lot of uncertainty about what's going to happen, who's going to win the election, but how might we think about what we're hearing from the various candidates or what might we expect or not expect? Thanks. That may be difficult for you, but you want to try. That's okay. Obviously, leadership matters, and so any nation will be susceptible to leadership changes, but I'll share with you a tongue-in-cheek type of comment. If we have a good leader, Philippines will grow at 7 percent. If we have a bad leader, we'll grow at 5 percent. But I don't know how true that is, but that seems to be general sentiment. No, but I think if you look at the Philippines, even compared to 10 years ago and today, there's really a big change in many ways. One is, of course, people are better educated today. People are more politically mature. They have higher income levels, and so all of those factors create a more vigilant type of citizenry that watch political actions very closely, and then you couple that with the introduction of technology in particular, access to the web, where you have all these blog sites and instant feedback on certain actions that politicians make, and it kind of has changed permanently the behavior of politicians for the better.  And so that's not going to change. That's there, and that is all well and good. Second, a lot of the reforms that have been put in place have been instituted already in terms of changes in law and regulations. So even if somebody wanted to turn them around, let's say a really bad leader gets elected, it will take time for them to do that. But I think that's not so easy to reverse for the reasons I previously mentioned. Third, I'm very hopeful that the choices for next year will be quite good. We still have to see, I think we'll know in about three months' time who these candidates are going to be. But I think you're seeing now a new generation of leadership emerging, and I think we'll get some quite good choices. Good. Okay, Bill, you wanted to make a comment? Yeah, sure. I would just like to add to what Secretary Domingo said. First, we've been asked a lot with the run-up to elections, will things slow down or speed up? My feeling is they will, first of all, they will speed up. The reason is that under Philippine law, we have certain prohibitions from entering into new contracts and procurement within a certain number of days before the election. So that means everything will need to be prepared and bid out. Those that are ready for bidding out would happen. So expect, I think, a speed up for some of these projects. Second, there's been a concerted effort for creating conditions for what we call irreversibility of reforms. That has to do with institutionalization, setting up of rules and regulations, laws, executive orders, which put things in place, which make it difficult to reverse. But part of that is also creating a constituency for change, meaning people who want to keep that change in place. So if I take a look at people today, I think there are higher aspirations, greater expectations, and social media does make, you know, enable people to react more quickly, positively or negatively. Do situations. So I think those conditions will have a great impact on how leadership will surface and evolve. And if I take a look at the surveys that have come up, there's been a big change. If you take a look at the surveys over the last 12 months, just how public opinion has begun to shift in their preferences. It's nothing final, but there's definitely a change is in the air. Okay, thanks. And Andres, you wanted to add. Yes, I think that's a great question. If you're investing in the infrastructure space, you don't invest for an electoral cycle. And if you build a hydro plant, it lasts 100 years, thermal plant 40 years, a wind farm 30. So you have to think a little bit, what's the trajectory that you see in the country? So certainly in our case, we like what we see. And we think that a lot of the reforms will be sustainable. Quite frankly, that the changes will continue, and maybe even accelerate in the future. So we're making a bet on the Philippines. And quite frankly, when we don't feel that way, we get out. And I think we have a very good record over the last couple of years of getting out of places ahead of thermal, whether it be a Venezuela or Ukraine, etc. So we feel very good about the Philippines. Okay. Yes, sir, back there. Hello, I'm Dane Hansen with the IATMO Group, we're an international trade association that does and crafts construction and building codes internationally. We've done a lot of work in Southeast Asia in particular, as a member of APEC and ASEAN. We have done a lot of work in Philippines, Indonesia, and others. And what we've found is that businesses, and a lot of our members in international businesses, are a little less, are more apprehensive to move into regions where there's lack of uniform construction codes or building codes that are actually enforced and kept up. And the reason why I say that is that, as we've seen in other areas that, if there's not enforced standards or construction codes, a lot of unsafe products are being shipped in through other means, and they can't, at a very strong discount, can't be met or competed with. So what is the Philippines doing to try to not only update standards and codes, but also try to bring it up to enforcement levels? So not just having it on the books, but actually enforcing the products that are being brought into the market, because that'll drive more commerce into the region as well. Okay, he's not up here, though, so can we ask him to address it later? Yeah, maybe we can ask him to pass the microphone. Can you pass the microphone to the secretary? Secretary of Public Works. Yeah. Yeah, I'm sorry. I might, those off there, I'm just a long, long trip from the Philippines. Anyway, I did mention that the National Building Code is being implemented by the DPWH. We are the National Building Official, and part of our program is the National Sewerage and Sanitation Master Plan for the whole country. And in fact, we're aggressively implementing projects that will improve coverage of both potable water and sanitation services. So we definitely would like to, we would welcome trade associations helping us do the upgrading of building codes. We just finished the upgrading of our National Building Code to make it adaptable to more resilient structures. We have recently approved the National Building Green Code. So we will be launching that very soon so that the new structures will have to adapt certain standards on green buildings. So as I said, as far as sanitation and sewerage, definitely that's an alley that would like to work with the industry associations. Great. Well, Secretary Singson, thank you for that spontaneous response. I think he will be speaking this afternoon and maybe you will hear more about this or have another chance to question him. Let me also say, since you mentioned building standards and this building you're in, if you didn't know, is one of the first platinum leads buildings in Washington. So we're very proud of our record there on environmental design. Yes, ma'am. Just a second. Could you wait for the microphone? I'm Gloria Federiga. Thank you CIS, U.S. Philippine Society and Philippine Embassy for having this event. You have provided us with some rosy current scenarios and projected scenarios of the Philippines. We appreciate that. Many of us are American citizens, but because of patrimony from the Philippines, we have deep affection for the Philippines and the Filipinos. We want to help. Some of us individually or as part of Philippine organizations provide donations, assistance to some individuals and some parties in the Philippines. I know my question will be will not be about official development, whether bilateral or multilateral. How can ordinary Americans like Filipino Americans that would like to invest in the Philippines, apart from what they invest in local companies or real estate, is there any listing or information of American companies doing business in the Philippines that will welcome very small investors? I'd appreciate if you have a comment on that. Well, I think it's quite difficult to be investing directly in companies, but what you can do is there are a lot of actually funds that invest in the Philippines. There's some Philippine funds, they know the exchange traded funds, the ETFs. So I think that may be the best way to do it. Now, there are some funds as well that are being set up in the Philippines itself, so you can invest directly into those funds. But it would be difficult to advise for the retail investor to invest directly in companies, unless you want to do it through the Philippine Stock Exchange or through the Stock Exchange in New York, NYSE, through those exchange traded funds. The embassy might be able to help with that. Yeah. Ambassador Queci is signaling himself. So I think if you contact the Philippines Embassy, which is right across the street, I'm sure they can be helpful. They're commercial or economic counselors, I'm sure would be able to help you. Thank you very much. Is that helpful? Okay, yes, sir. And then I'm going to turn this direction. So if anybody over there, I'm there. This gentleman here and then the woman there. Good afternoon. I'm Dan Lau. There have been reports or factual reports about Chinese illegal workers in the Philippines. And number two is the Black Sand Magnetite Mining in the Philippines. On the illegal workers, how did they get there? And two, it's not just Black Sand, but other Philippine natural resources being exported out to China, for example. Okay, yeah. Well, I think the illegal worker problem is not unique to the Philippines. We do have our fair share. It's also present here, I guess, and in many other countries. And yes, we do have reports of illegal workers. I guess a lot of them come from China. And so the immigration authorities are dealing with that. And again, Philippines on the other question about the harvesting of our natural resources and being brought elsewhere. Again, Philippines being an archipelagic nation. We have 7,000 islands. It's really very hard to protect, in particular, the marine resources. So we see a number of nations that are in violation of this, but again, that problem is not unique to us. Indonesia faces the same thing. Vietnam faces the same problem. Malaysia. So that's being addressed by the Coast Guard. But again, I think we have 35,000 kilometers of coastlines and not that many ships. It's very hard for us to really patrol all of our coastlines. Yes, ma'am. Good morning. I'm Mitsy Picard of US Filipinos for Good Governance, formerly of Asia Society. I have a question for Bill, since you're not a politician. Well, because Secretary Dominguez said he doesn't answer politically inclined questions. But anyway, Bill, you mentioned about municipalities and other parts of the Philippines. How is the economic picture looking in Mindanao? And what happens if the Bangsamora law doesn't pass? My question for the Millennium Challenge and Mr. Gluski, because I want to include all of you, is how is your investment looking in Mindanao and how do you look upon it in the future if or without the Bangsamora? And the Millennium Challenge, how is the poverty rate is it increasing or diminishing in Mindanao? Thank you. Okay, that's everybody guessed it. Okay, thank you. Yeah, well, I guess if you look at Mindanao, it's been punching below its weight relative to its size and potential for the country. It has some vibrant areas in Mindanao. If you take a look at the Kagean de Oro to Iligan Corridor, if you take a look at the General Santos area, Davao area. But there are obviously some other problem areas. I would say that one disadvantage Mindanao faces is in the area of just a simple issuance of travel advisories where if something happens in one area of Mindanao, a travel advisory tends to sort of blanket the entire area so that affects areas which otherwise are quite peaceful and progressive. So that's something that would be great if we could address that issue. What should happen if Bansamoto Basic Law doesn't get passed? I think that would be unfortunate. I think that is the best chance. Whatever problems people might have might see with it. I think that is still the best chance we've seen in decades to bring peace to Mindanao and prosperity. And it's been really difficult, I think, to attract businesses and investments to an area that they feel is not stable or safe. So one of the things we're trying to do at NCC is to try to bring in more data about cities and municipalities within that area so they can be measured. And one of the things I've told people in Mindanao is that you can't wait for BBL. At least get listed on the index so people know what it's like to do business in your area. So slowly I'll be able to fill that gap and project more information about what it's like to do business in Mindanao. I think it's maybe still just one of the areas that is so low-profile in terms of business activity. People don't really advertise what's going on out there, but I think there's great potential for Mindanao. Okay, I understood. I'll take that on your next question. My arm, right? Yep, sure. Well, right now all of our activities are in Luzon and our big expansions we're thinking about is Luzon. But as we get more into using new technologies like the lithium-ion batteries, you have to put them on each island. So certainly Mindanao is not sort of blacklisted. It would depend where in Mindanao, honestly. And probably we would follow big clients like mining companies to provide power for them. But certainly a successful pacification program would open up more areas. Okay, and that? Sure, Millennium Challenge Corporation. We in particular were actually not focused on Mindanao. Part of that was because the U.S. government through USAID had a lot of focus on that area. And so we wanted to have some geographic complementarity. So I can't speak to the poverty rates in Mindanao. I will say that as you're right in the sense that there's a need to push out and decentralize a lot of the focus of development into some of these areas. And I think some of these efforts, working with the municipalities and local governments, should have impact on that. Okay. Yes, sir, there. And then that gentleman there. Hello, I'm Greg Rushford. I publish the Rushford report on trade politics. My question would be for Secretary Domingo. Could you just talk a minute or two about how the South China Sea issues have affected the Philippines' trading relationship with China? Hi, Greg. I like your name. Actually, he was just in the Philippines and it meant. Actually, in terms of our trade relationship with China, it hasn't affected, that hasn't been affected at all. In fact, that grew by double digits from 2013 to 2014. So we continue to have very good two-way trade relationship with China. Now, from an investment's perspective, we were also not affected by it because China never invested big in the Philippines in the first place. So when we counted it, I think four years ago, investments of China into the Philippines was really mini-skill. It was around $600 million, total cumulative. So very small investment in the Philippines. And in fact, the Philippine investments to China were much bigger. It was about $2.8 billion. So even with the South China Sea issue, we haven't seen really a significant change on the investment side. But on the trade side, it's very robust and healthy. Can I just ask a follow-up question? My understanding is that in their infrastructure series of initiatives in the Asia Pacific region, China, the so-called One Belt, One Road initiative, that China has indicated that it may not include the Philippines in this package of initiatives. Is that correct? And if so, what do you think about that? Well, since we haven't seen that share happen in the past, I think we will not feel it in the sense that it will not be a loss because it was never there in the first place. But to the extent that maybe we're missing out on an opportunity, well, then that's a lost opportunity. I see. Okay. It was that gentleman I recognized, and there was a gentleman here and a lady there. Good morning, Ryan Jacobson, Global Federation Councils. My question primarily is for Secretary Domingo. This year, the Asian Economic Community is supposed to get into full effect. You talked about how the Philippines' primary resource is human capital. Do you think that with the full initiation of the AC, the human capital might have some problems? Like people talk about some jobs going to other ASEAN countries and some people from other ASEAN countries coming to the Philippines taking jobs. Whether that affects investment like the thermal plant that was all Filipinos, would that change other nations sending labor to the Philippines and vice versa? Okay. From an ASEAN perspective, the Big Bang for ASEAN happened in July, January 1, 2010. That's when the trade and goods agreement took full effect, which meant that over 99 percent of the goods traded among at least the original six were the duties were reduced to zero, January 1, 2010. So from a trade and goods perspective, we've been competing already full blast since 2010. So from a trade and goods, the ASEAN Economic Community will have very little impact. Now, when you talk about the trade and services component and the other components, there was this target of about 500 plus action steps that have to be completed by December 31 of this year. Now, the ASEAN way is not Big Bang. It's by doing things little by little. So as of today, most of the ASEAN members have already complied with about 80 percent of that 500 plus list. We're trying to get to 90 percent by the end of the year. That is the target. And so again, by the end of the year, it's not going to be Big Bang because 80 percent already has been accomplished. So there's another 10 percent that we're trying to accomplish between now and the end of the year. So I think we'll wake up January 1, 2016, not feeling really a Big Bang in effect. Okay. Sir? Nelson Garcia from WIPG. We're a professional networking organization here in Washington that whose members work in the U.S. Congress, federal agencies and private sector, and work very closely with the embassies here in Washington on international policy. The question I have is not too long ago. Many Western companies were moving some of their presence away from countries like the Philippines into mainland China in order to penetrate the market share over there. And the one company that comes into my mind is what happened with FedEx at Subic Bay, moving their hub operations out of Subic into Guangzhou, China. But ever since the Chinese have begun to undertake a lot of business, less business-friendly policies and the cost of business in China has gone up somewhat. Have you detected any opportunities of recapturing some of that market and some of that presence back into the Philippines in order to utilize some of our resources there? We have seen, we have seen actually a fair amount of movement from China to the Philippines along with Vietnam and Indonesia in particular. I think these three countries are getting the bulk of the movement south from China, though, because a lot of firms now have a China plus one, plus two, plus three strategy. But China will continue to have its share of manufacturing facilities just because there's a huge domestic demand in China. And it will be difficult for companies to operate in China without having some manufacturing or some big operational presence there. So that will continue to be. Now, if you're talking about, let's say, a hub of FedEx or UPS, China will make a lot of sense because they are the biggest consumer of goods. So it makes sense to locate your hub in the place where the most goods are being shipped to, in and out. Philippines can act as a secondary hub because in that part of East Asia, Philippines is the most centrally located. That's the reason why the U.S. Air Force base used to be there. The Seventh Fleet was also based there before because it's very central. It's the only country in that part of the world that can claim that you're within four hours flight of any major capital, whether it be Tokyo, Seoul, Beijing, Shanghai, Bangkok, Nampen, Hanoy, Jakarta, Singapore, KL. Okay. So Philippines that is right at the center of all of this. So we can act as a secondary hub, but not the primary hub just because of the volume. Volume will go to China in and out. The other reason why there's a big movement from China, and it's actually in their plan, it's deliberate, is they're really migrating their policies to a higher value added type of manufacturing game. And they're either pushing the companies inland or they're pushing the companies out. It's deliberate strategy on their part. And so what they've done is they've raised the wages in China. And in a general survey, generous the Japanese agency, they did a salary survey in manufacturing from 2009 to 2014, sorry 2009 to 2014. And they did the survey for Philippines, Indonesia, Vietnam, Thailand, Malaysia and China. For the workers, Philippines had an average wage growth rate of 2.2 percent over that period. China had a growth rate of 14.8 percent. So in absolute numbers, just to give you a comparison, in 2009, the average salary of the worker in the Philippines was $3,600 versus China's $4,100. So China was slightly more expensive than the Philippines in 2009. In 2014, Philippines was at $4,000 while China was at $8,200. So in 2014, China's wage cost was already more than double that of the Philippines. From a small premium in 2009, it's now more than double. And because of that, a lot of the lower value added manufacturing is moving out. They're maybe not totally moving out, but they're diversifying into lower costing countries like Philippines, Indonesia and Vietnam. So that's also the reason why you're seeing the average manufacturing growth in the Philippines register 8.8 percent per year over the last two years. So very strong manufacturing growth. And we see it. We see a lot of mega plants now being put up in the Philippines. And Apple CEO Mr. Cook announced last year that they will start producing Apple products in the Philippines. So that's one of the things that we're saying. Okay. Thank you. Yes, ma'am. And then this woman. And then I think we're going to wrap up. Matt Wong with the Maryland Governors' Commission in Asian Pacific. I have to question one for Secretary Domingo and the other one for Mr. Glesky. So with all the investments, Secretary Domingo, what's the current credit rating of the Philippines? And with Mr. Glesky, I understand, correct me if I'm wrong, AES is in the power call operation, which is in the province of Zambales. If so, how many beneficiary or how many areas is AES distributing in the area of the Philippines? Follow up on that. Is there something that you can do? There is a current existing power plant, which is being mud-balled or scrapped by the Philippine government. And I'm talking about the nuclear power plant built by Westinghouse in the past, which hasn't been operated many years now. And I happened, my husband, designed the HBAC, heating and cooling on that with the Westinghouse, and nothing happened on that. Okay. S&P, Moody, and Fitch have all rated us the Philippines investment grade. S&P in particular has rated us two levels investment grade, okay? We're one level above the basic investment grade level. And the Philippine banking system also is the only one in the world which has a positive outlook from one of the three. I forget which one. I think S&P. S&P is probably the one. So the only one in the world. Interesting. Okay. I think, yeah. In Luzon, a big power plant sells mostly to Moralco. So then it's distributed around the island of Luzon. But recently, you know, we won a bid for providing energy to the cooperatives that they banded together. And we wanted at the lowest price it's ever been bid in the Philippines. So we're very proud of that. And so we're trying to diversify and add new capacity. In terms of the nuclear plant, we do every type of energy except for nuclear. So, and that has to do a lot with, you know, the size of nuclear and the insurance issues, et cetera. So we can do any type of energy except for nuclear. Okay. Excellent. And yes, ma'am. And then one more in the back, and then we'll finish. Oh, thank you so much. Yes. My name is Rita Herana-Edkins. My question is, it has been mentioned that the United States has a very important relationship with the Philippines and vice versa. I think the business community in the Philippines would primarily agree with that. Now, President Obama is scheduled to go to Asia, the Pacific region, sometimes this fall. What would be the message that specifically the business community in the Philippines would want to stress to the American president considering that United States is pivoting to use the word towards Asia while the Philippines is not yet part of the TPP and maybe someday it will be. But what specifically would be the message of the business community in the Philippines to the American president, and particularly in exploring the market in the United States for whatever products in the Philippines that could be encouraged with infrastructure and business incentives, et cetera. Thank you. Sure. Yeah, well, we look forward to welcoming President Obama to the APEC leaders meeting in November. I think the key message really is to continue and aggressively move with the pivot to Asia. I think that's good for Asia Pacific, that's good for the U.S., that's where a lot of the growth in the markets are. So I think that would be the key message. The other thing is looking at the TPP and a second day Domingo mentioned, it's something that we would like to be part of. I think that we should take a look at what those so-called disqualifying elements would be for the Philippines and have a second look at them. It's difficult for us to change the constitution to be able to fit into that TPP context, but I think we are not the only economy in that TPP equation that has these disqualifying elements. So that's something I think we should look at it with some open eyes. And the third thing I think on TPP is that it's not just trade and goods, but if we could simultaneously have trade and services included, I think that would put some element or a push, a positive push for the Philippines. That's what we can contribute if not trade and goods. Trade and services certainly is an area where we could help and we could benefit. I mentioned that I like APEC and one of the reasons is there's a very good opportunity for the leaders to interact with the business community during the summit, both at the APEC, the APEC Business Advisory Committee, sessions that are built into the leaders' sessions, and then the CEO forum, which is also held during that time. So there's a good opportunity for that kind of dialogue with all the leaders, including President Obama. Okay, I'm going to take two more together. The gentleman in the back and the gentleman here. Thank you. My name is Peter Thiemann with the Denton's Law firm. I'm an energy partner here in D.C. We have the honor of working on a PPP project in the Philippines. But my question is to energy and Mr. Igluski, you'd mentioned renewable power, battery storage, capabilities. Are there incentive programs in the Philippines like there are here in the U.S. about production tax credits or investment tax credits that encourage outside investors to come in and put in wind power projects or solar projects? The other question related to that is to get that power from those islands to the grid, the grid reliability and the storms are very important. Are there opportunities there for hardening of the grid and the like for reliability? Okay. And then this gentleman will take it at the same time, could we? Thank you. I'm Roberto Yamas with the U.S. Philippines Society. And my question is to the Millennium Challenge Corporation. And, sir, I apologize. I didn't get your name earlier. But earlier you were talking about the intervention programs for the first compact granted to the Philippines. And there were three areas that you mentioned, and tax administration reform, infrastructure quality with strong emphasis on road infrastructure and climate resiliency design, as well as empowering LGUs to undertake small-scale infrastructure projects independently with PPP participation. My question is, you know, I understand that the first compact is about to expire. And if the Philippines is going to get a second compact, what kind of intervention programs would MCC be looking at for this? Okay. Thank you. The Philippines has renewable goals. And so recently they had two bids, one in solar and one in wind. And the wind bid was oversubscribed because the resources are very good in the Philippines. Solar on the other hand was undersubscribed, did not fill the whole amount. So they don't have specific tax credits per se. In terms of the batteries, the key that they could do is when you have a lot of renewables, they fluctuate. The wind, gusts, clouds pass over the solar farms. So with batteries, you can actually, with ancillary services, make the output mimic a hydro plant or a thermal plant. So that's really the key. Now, why hasn't this taken up? We're actually building one in the Philippines, but a small one, I think the potential is enormous. And basically it's that, like most regulators all over the world, the regulation tends to be backward looking, and it's important to have it sufficiently broad so you can introduce new technologies if it's very specific. So I hope that answers your question. Okay. Thanks, Matt. Sure. Very briefly, our first compact partnership actually ends next May. And so it's coming to a close. The way our model works, rather than talk about what we're going to do, maybe I'll emphasize the how for the second compact partnership. We're in the process of doing what we call constraints to growth analysis, together with Bill and a team there. So it's very much demand-driven. And the idea is to find what are the impediments to foreign direct investment, to economic growth, to distribution among the poor in terms of the poor participating in economic activities so that they can move. So we don't know yet what we're going to be focusing on. However, the how part is important. We are set up not to have a perpetual long-term relationship with countries. We really want to work ourselves out of a job. We really want to be a spark so that the private sector can take over. We can focus on some of the public goods. And as we look at our subsequent partnership, I think we're very interested in one, seeing opportunities to partner with the private sector so we can mobilize private capital around some of our interventions. And two, our expectation is that the government of the Philippines and civil society take a role both in terms of putting in resources, both financial and human capital resources, to help scale hopefully the impact of what we've accomplished. So it's still very early. Philippines was declared eligible for a second compact, which is a recognition of all of the good that's been happening over the next five years, but we'll have to wait and see what comes out of this constraints analysis. But I do suspect that it will be focused more on how do we mobilize private sector capital around what we're doing and how do we unlock that so that we can phase back and phase out eventually. Okay, thank you. I'm going to give Secretary Domingo one minute if you want to wrap up and make any final comments. Yes, my final comment is we're actually sorry. Yeah, we actually came here to the U.S. really to to spread the good word about the Philippines. The Philippine growth story is good. It's going to be there for many years to come. From a business perspective from the U.S., we see participation in the power sector. We see a lot of participation in the business process outsourcing sector, but we see very little in the manufacturing sector. We'd like to see more American firms really to look at the Philippines and see what we have to offer from the manufacturing side, because the rest of the world is there. The Japanese, the Taiwanese, the Europeans, they're all putting up new manufacturing plants in the Philippines. But unfortunately, for some reason, the U.S. firms are absent outside of the ones that are already there who are expanding. So we hope that with this presentation that we can convince some of you to start coming to the Philippines and participate. Thank you. Okay, with that final clarion call for U.S. investment in the Philippines, we'll wrap up this session. Great questions, terrific answers. I think I'm no question this was the most informative and insightful hour and a half I've spent this week. And so I very much appreciate the panelists. And please join me in thanking all the panelists for joining us. Thank you.