Reach greater economic heights

Thank you very much for your very kind introduction.

Let me formally greet the Chairperson of the Securities and Exchange Commission Chairperson Teresita J. Herbosa, Chairman Jose Pardo of the Philippine Stock Exchange, and Mr. Datuk Ranjit Singh, Chairman of the Securities Commission of Malaysia. Let me also take this opportunity to greet Mr. James Nugent, Director-General of the Southeast Asia Department of the Asian Development Bank. I also see here my mentor in corporate governance, Mr. Jess Estanislao. Distinguished guests, friends, ladies and gentlemen, a very pleasant evening to all of you.

It is a great honor and pleasure to speak before you on this momentous occasion – the first ASEAN Corporate Governance Conference and Awards.

Not so long ago, corporate governance did not mean that much except to people in the academe. But two events in world history highlighted its extreme importance.

First, the 1997 Asian financial crises, which showed that the corporate sector’s unbridled pursuit of profits can severely affect economies. The  financial crisis that affected the major economies in the ASEAN region sadly underscored  the lack of corporate governance mechanisms in these  countries.

And second, the corporate governance scandals in the United States of America and Europe in the early part of the 21^st century that spurred some of the largest insolvencies in corporate history.

Today, everyone from the corporate world to bureaucrats and lawmakers recognize that corporate governance is important in macroeconomic development.

          

I commend the ASEAN Capital Markets Forum which, in partnership with the Asian Development Bank, initiated the ASEAN Corporate Governance Scorecard (ACGS), so as to raise the general corporate governance standards of ASEAN publicly listed companies. The scorecard will greatly help in increasing their attractiveness to investors, and promote the ASEAN as an asset class.

        

By actively participating in the ACGS initiative, the Philippines is manifesting its resolve to pursue corporate governance.

     

 It is heartwarming to note that eleven Philippine publicly listed corporations (PLCs) made it to the ASEAN Top 50 PLCs which will be honored tonight. My heart swells with pride knowing that in the ASEAN region, our country’s publicly listed corporations are making huge strides in corporate governance.

This is an opportune time to commend Chairperson Teresita Herbosa and the Securities and Exchange Commission for its fierce determination to improve the country’s corporate governance regime and to enable the Philippines to cope up with the forthcoming ASEAN economic integration. 

This evening, it is my honor and privilege to witness the launching of the Corporate Governance Blueprint for my country. This is the Security and Exchange Commission’s Corporate Governance roadmap for the next 5 years. I am confident that with this roadmap, our country will have an even stronger corporate governance regime. 

The pursuit of corporate governance is not for those with a faint heart. It requires nerves of steel and solid rock determination. 

If you recall, during the first SONA of President Benigno S. Aquino in 2010, he cited the excesses of the GOCCs, as in the case of the MWSS. I found it deplorable that GOCCs, or the state-owned enterprises posted a P3.46 trillion in liabilities, thus, placing a huge financial burden on the shoulders of the national government. And even more appalling were the extravagant allowances, questionable incentives and retirement benefits of GOCCs. 

It is lamentable that huge amount of money went to mismanaged and unproductive GOCCs. That money could have been spent for social services such as school buildings, hospitals, and scholarships for the poor but deserving students or even for the rehabilitation of areas damaged by natural or man-made calamities. 

In response, and on our own initiative, and with the help of ICD, Jess Estanislao’s group, we wrote and worked on the enactment of the GOCC Governance Act of 2011. The law is a major reform measure as state owned enterprises that were once milking cows of unscrupulous government officials and employees have now become instruments of national progress. 

Last year, 49 GOCCs in the government, the 49 of them remitted a total of P36.85 billion to the national coffers. In 2013, contributions were at P32.21 billion. Note that in 2010, only P12 billion was the programmed revenue from these government-owned and controlled corporations. In other words, in a short term of about four years, we tripled the income and contribution of the state-owned enterprises to the national coffers. 

Today, four years after the GOCC Governance Act of 2011, the law has been cited by credit rating agencies as a landmark piece of legislation that instills discipline among state-owned enterprises. 

With this law, we manifested the Philippine government's sincerity and commitment to improve corporate governance in the public sector. At least, I can boast that the public sector beat the private sector by four years insofar as corporate governance is concerned. 

Five years ago, President Benigno S. Aquino was elected on the platform of good governance. I threw my complete and total support to the President’s “daang matuwid” as I believe that this is the path that will propel our country to greater economic and social heights. 

Today, we can rightfully and collectively say that   the Aquino government has made huge inroads in the field of good governance. This evening, let us celebrate what we have achieved even as we build on our gains and continue traversing the path of good governance. 

Let me therefore again congratulate the Securities and Exchange Commission Chairperson Tess Herbosa on this occasion, and we assure you of our support in Congress of the initiatives that you may want to take in terms of good governance in the private sector.  

Thank you very much. ###