amando m tetangco, jr : the philippine economy : developments and prospects speech by mr amando m tetangco, jr, governor of the central bank of the philippines, at the 4th national convention, chinese – filipino business club inc, manila, 9 february 2006. * * * the officers and members of the chinese - filipino business club, inc. led by president rufino ko pio, special guests, ladies and gentlemen, good afternoon. thank you for inviting me to join you at your 4th national convention. i am truly glad for this opportunity to be with you. chinese - filipino businessmen represent a very important segment of the philippine economy. you have a unique place in our economy as you personify the convergence of the best from two cultures : the highly admired chinese work ethic combined with filipino ingenuity. this formidable combination has given wings to a strong entrepreneurial spirit that has helped strengthen the backbone of the philippine economy. i am pleased therefore to give you an overview of how our economy performed in 2005, the developments that can affect your business and how we at the bangko sentral ng pilipinas see the prospects for the philippine economy. later, we can have a discussion on economic issues of particular interest to you. recent economic developments i will now give you a brief overview of recent economic developments. we had to deal with many challenges in 2005. among others : we had to grapple with the impact of record high oil prices ; slower growth in exports ; the el nino weather phenomenon which stunted the growth of agricultural output ; credit ratings downgrade ; and domestic political concerns. and yet, in the face of all these, our economy proved its resilience and fundamental strength. our domestic economy, as measured by gross domestic product, continued to expand and managed to grow by 5. 1 %. as businessmen, you know that achieving such growth, in a year marked with challenges, did not happen by chance ; it resulted from the continuous implementation of a comprehensive economic reform program involving both the government and the private sector. part of this reform program is fiscal consolidation, which is now generating benefits for the country. the combined effects of government ’ s cost cutting programs, improved tax collection efforts, and higher revenues from sin taxes and the evat, brought down the government ’ s fiscal deficit in 2005 to p146. 5 billion, substantially lower than the programmed deficit of p180 billion. this has led government to say that it is now possible for

concluding remarks ladies and gentlemen of the chinese - filipino business club, there is no doubt, we have made solid economic gains ; even foreign media have taken notice. for instance, the international herald tribune noted that investors are now looking to the philippines, often shunned in the past for being " the sick man of asia. " and while there is still much that we need to fix in our economy, we can do this better and faster if the government and the private sector will cooperate and work more closely together in making our economy efficient and more globally competitive. the success of policymakers ’ efforts to sustain economic growth ultimately depends on the support of the private sector ; you and i know, government cannot do everything on its own. in this regard, i commend the tireless efforts of industry groups such as the chinese - filipino business club for its role in keeping the economy healthy and buzzing with activity. moreover, i congratulate your organization for its spirit of volunteerism in supporting community projects. may your tribe increase. it is my hope that you will become even more proactive in ensuring the long - term growth of our economy. finally, i wish the leadership and members of the cfbci good health, wealth and good fortune, at all times. marami pong salamat.