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Secretary of Foreign Affairs








21 March (Friday) 2014, Ballroom, New World Hotel


Theme: “Asia’s Resurgence and America’s Role”







Thank you for the kind introduction, Mr. Rick Santos.


Honorable Gloria Steele, USAID Mission Director;

Honorable Governor Leopoldo Petilla (Leyte);

Mr. Steve Okun, APCAC Chair;

Mr. Rhicke Jennings, President, AmCham Philippines;

Mr. Ebb Hinchliffe, Executive Director, AmCham Philippines;

Distinguished AmCham Presidents, Executive Directors and Directors;

Ladies and gentlemen;


Good afternoon.

Thank you for your warm welcome. Congratulations to the leadership and members of the Asia-Pacific Council of American Chambers of Commerce and the American Chamber of Commerce of the Philippines for organizing another successful conference!

I understand that my fellow Cabinet Members, Finance Secretary Cesar Purisima and Trade Secretary Greg Domingo, spoke yesterday about the “Philippines’ great potential, and that of the ASEAN Economic Community, for US investors.” So today, and to complete the whole picture, I would like to focus on the importance of promoting regional peace and stability as these elements underpin the continued resurgence not only of the Philippines but also Asia’s most dynamic economies.

America has been a Pacific Power for more than a century. In keeping with the adage that trade follows the flag, American business has also had long-term presence all over the Asia-Pacific region. Indeed, the American Chamber of Commerce in the Philippines, incorporated in 1920, is the oldest American Chamber in Asia.

So I am very pleased to meet today, the APCAC members from 26 member economies.[1] I would like to humbly thank each and every one of you for sharing your valuable time with us today.

Let me also take this opportunity to thank your respective companies’ generous donations to the victims of Typhoon Yolanda, and for your solidarity with the Filipino people.


Asia’s Resurgence and American Interests

I realize, of course, that you are all Old Hands in our region. You have some frontline experience with the many economic miracles Asia has produced in the last 50 years.  These miracles started with Japan, then moved on through the Newly-Industrializing Economies[2] (NIEs), then the other emerging Asian economies including those in ASEAN, and then India and China. 

As a result of these economic achievements, Asia has accounted for more and more of global growth, development, trade, production and consumption. The Asian Development Bank (ADB) forecasts that “Asia will make up half the world’s economic output by 2050, and another three billion people will have joined the ranks of the affluent, their incomes matching those of Europe today.”[3]

Moreover, it is reported that “2014 should see Asia-Pacific become the world’s fastest-growing region for the 10th consecutive year,”[4] a clear indication of the consistent track record and bright prospects of the region.

Ladies and Gentlemen, this is not small change. The future of the United States will depend on connecting, therefore, with this Asian economic powerhouse. American interests are now increasingly and inextricably linked to the future of Asia.

The nations of Asia worked hard, invested in education and infrastructure, sharpened their competitive advantages, climbed the technology ladder, embraced greater foreign trade and investment and hauled themselves out of poverty.


Shared Aspirations: ASEAN and APEC

Asia's stellar economic performance, however, is nurtured and strengthened by regional diplomacy.  ASEAN, of which the Philippines was a founding member, overcame the old Cold War barriers that had divided the region. ASEAN eventually brought together the whole region under one roof.  Today, ASEAN aims for even greater integration as a regional community by 2015.

ASEAN also knew it could not do everything by itself.  The Association, therefore, reached out to its many friends to build the regional structures on development, growth, peace and progress we have today.

On the basis of ASEAN centrality, we now have a dense network of ASEAN Dialogue Partnerships, the ASEAN Plus Three, the ASEAN Regional Forum (ARF) and the East Asia Summit (EAS) as inclusive mechanisms where we can bring together diverse interests, inside and outside the region, for the purpose of dialogue and cooperation.  Avoidance of conflict and mutuality of progress were the guideposts in securing a stable regional environment conducive to growth and development.

APEC, which the Philippines will chair in 2015, provides an even broader platform for collaboration to support strong growth and deeper integration in the Asia-Pacific.

In these efforts, we recognize the vast contribution of the United States.  By extending its security umbrella to the Western Pacific, by promoting freer trade and investment flows, and by fostering the ideals of democracy and open societies, the United States provided certainty and confidence for Asia's continued advance. As conveyed by the Secretary of State John Kerry, the US must continue building the regional and bilateral partnerships at the heart of a more stable, prosperous, and democratic Asia-Pacific so that the U.S. can continue to grow and prosper in the 21st Century.[5]  

It is in the nature of things, however, that the world never actually stands still.  Recent events remind us that we cannot rest on our laurels. Our decades-long economic progress always rested on a broad consensus that countries would resolve their differences peacefully and pragmatically in pursuit of shared interests.  This old consensus is now coming under mounting pressure.


China Rising

The source of this pressure is largely due to actions being taken by China to assert what it believes to be its rightful interests more forcefully in the region. 

At this stage, let me make myself clear. The Philippines openly and fully acknowledges that China's emergence as an economic power has been of great benefit, not only for the Asia-Pacific, but for the world. China's growth promises to expand world trade, investment and tourism. 

We certainly appreciate the positive role that China has played in many areas. Encouraging economic development, expanding science and technology, undertaking functional cooperation, deepening cultural connections and enhancing people-to-people understanding have all been on China's international agenda.

The perception is that China’s economic and military power have combined with rising nationalism. This resulted in setting Beijing on a very different and difficult course with many of its neighbors and with the United States as well.

If this perception is valid, this will no doubt cast a shadow on China's self-proclaimed ‘Peaceful Rise’ and will lead to the question, “is China's progress going to be at the expense of others?”

The Philippines certainly hopes not, but Beijing's increasingly assertive behavior must be a cause of concern for everyone.

What is clear is that Beijing has embarked on a determined course to change the prevailing status quo all along its coastline, from the East China Sea down to the South China Sea. Analysts interpret China’s assertive actions as part of its expansionist strategy, as demonstrated, for example, by its nine-dash line claim, to support its position of indisputable sovereignty over nearly the entire South China Sea.

Without regard for the rights of its neighbors, China has employed its naval and maritime vessels in a coercive manner, in gross violation of international law, to drive away fishermen from their traditional fishing grounds, to intimidate its neighbors, to prevent exploitation of resources, and to prevent us from enforcing our laws within our own exclusive economic zones or EEZs.

China's basic blueprint is to unilaterally impose its so-called nine-dash line as a basis for claiming sovereignty over virtually the whole of the South China Sea.  If Beijing succeeds, it will turn one of the most strategically vital international bodies of water into a Chinese lake.


We acknowledge China’s role in world affairs and support its peaceful rise. To be truly viewed as a positive force and a responsible power, China must manifest its adherence to and respect for the rule of law.


‘’What is Ours is Ours’’

Ladies and Gentlemen,

Let me tell you what this expansionist Chinese strategy, through its nine-dash line claim,  would do to the Philippines and other countries.  We would, in the South China Sea, lose our EEZs and our Continental Shelves which have been provided for our benefit by UNCLOS.

Beijing has accelerated provocative actions to project its sovereignty into the East China and South China Seas.  These include the proclamation of an Air Defense Identification Zone (ADIZ) in the East China Sea with the same threat for the South China Sea, the enactment of exclusionary fisheries regulations in the South China Sea, and its continuing maritime presence in our own EEZ.

Our response to the evolving, complex situation in the South China Sea is driven by values that are at the core of our principled foreign policy – freedom, democracy, the rule of law, and the peaceful settlement of disputes.  We seek not just any kind of resolution, but a just and durable solution, grounded on international law. 

This principled stance of doing what is right has been consistently articulated by President Benigno S. Aquino III in five succinct words, “What is ours is ours.”

The issue of the South China Sea has never figured prominently in international media and on the agenda of regional and international forums as it does now. More and more international scholars and experts have acknowledged the merits of the Philippine advocacy.


The Rules-Based Approach

From the Philippine perspective, the rules-based approach contains two elements:

·         the first is the full and effective implementation of the ASEAN Declaration on the Conduct of Parties in the South China Sea (DOC) and the expeditious conclusion of a Code of Conduct (COC) on the South China Sea between ASEAN and China towards the management of tensions; and


·         the second is the third-party arbitration towards resolution of maritime disputes, in accordance with the universally recognized principles of international law, specifically UNCLOS.

The Philippines initiated arbitral proceedings in January last year. Upon invitation, China refused to participate. We see arbitration as an open, friendly, and durable solution to the dispute. We believe that arbitration benefits everyone.

For China, arbitration will define and clarify its maritime entitlements. For the Philippines, arbitration will clarify what is ours, specifically our fishing rights, rights to resources and rights to enforce laws within our EEZ. For the rest of the international community, the clarification of maritime entitlements will assure peace, security, stability and freedom of navigation in the South China Sea.

There is a view that continuing delays in the expeditious conclusion of the COC will allow China to buy time to complete its perceived expansionist agenda in the South China Sea.

On the part of the Philippines, we are fully committed to submitting our Memorial or written pleading to the Arbitral Tribunal by 30 March 2014, in about nine (9) days, and pushing the arbitration to its logical conclusion.


America’s Role and the Rebalance Strategy

Ladies and Gentlemen,

As we move forward, the United States must remain an active player in bolstering the regional architecture for stability, security and development.  Through the regional institutions in place, such as ASEAN, the ASEAN Defense Ministers Meeting Plus, the ASEAN Regional Forum, and the East Asia Summit, America can continue to play a positive role. This role is bolstered by all elements of American power, including “strong and principled diplomacy.”[6]

We welcome Washington's rebalance strategy to refocus and reinforce America's presence in and engagement with the region.  Despite budgetary constraints and the pull of other global commitments, it is here in the Asia-Pacific where America must clearly advance its interests and priorities. As Asia is becoming more prosperous, security tensions must be addressed.

America’s rebalance strategy that addresses political, security and economic concerns will greatly enhance our collective confidence in a peaceful and progressive future. Such a strategy must also focus on closer ties and cooperative endeavors with allies in the region.

The Philippines is America's oldest treaty ally in Southeast Asia.  The United States is the only treaty ally of the Philippines. Together, we have weathered decades of regional

conflicts and have contributed to regional stability.  We have done so in great part because of our shared democratic principles and values. 


Broadening and Deepening of PH-US Relations

In a few weeks, US President Barack Obama will undertake his first Visit to the Philippines, the 8th by an American President. In my two meetings last year, Secretary of State John Kerry said that the “relations between the US and the Philippines have never been better.”

President Obama’s Visit in late April will reaffirm the strong economic, people-to-people and security links between our countries. Indeed, we are witnessing a broadening and deepening of the Philippines-US relations, viewed positively in the context of the US pivot or rebalance towards Asia, and as demonstrated by Bilateral Strategic Dialogues, high-level visits, increased funding whether in the Foreign Military Financing or the new Global Security Contingency Fund.

Now, we are working on a Enhanced Defense Cooperation Agreement or EDCA, the implementation of which is expected to further enhance our security alliance. Last January, we began fresh discussions on the EDCA, premised on mutuality of benefits and in full accord with the Philippine Constitution.

The agreement will ultimately support the Philippines’ efforts to modernize its military and build a minimum credible defense posture.

The scope of the agreement will include, among others, improving interoperability, addressing short-term gaps, promoting long-term modernization, reinforcing maritime security, deepening maritime domain awareness, and strengthening humanitarian assistance and disaster relief capabilities. Thus far, we have completed six negotiating rounds.

The US pivot or rebalance to Asia is not only limited to defense and security cooperation but also encompasses economic arrangements and greater people-to-people exchanges.

For instance, under the Partnership for Growth (PFG), the Philippines was selected as one of the four (4) pilot countries and the only country in Asia, in recognition of our track record in partnering with the US government and our potential for continued economic growth. In this program, the US Government has committed an estimated $170 million to pursue three (3) key areas of policy engagement: (i) improving the regulatory environment; (ii) strengthening the rule of law and anti-corruption measures; and (iii) improving fiscal space. 

The Philippines has consistently conveyed its keen interest in becoming a member of the Trans-Pacific Partnership and is currently working to address critical paths towards joining the TPP, consistent with the Philippine Constitution.  As we speak, a bilateral Technical Working Group is now discussing it in Washington, DC.


Clarion Call for the Chambers

Ladies and gentlemen,

The Asia Pacific Council of American Chambers and the American Chamber of Commerce – Philippines have significant roles to play in all of these challenging developments.

You have the choice of either sitting on the sidelines, or continue being part of Asia’s and the Philippines’ economic resurgence.

I, therefore, enjoin APCAC and AmCham to fully support our independent and principled Foreign Policy and encourage discussions on the same, knowing fully well that the ripples of tension in one small part of the South China Sea reverberates throughout and can affect the economies and business environment of the entire Asia-Pacific region.

I enjoin the Chambers to fully support the Philippine Government’s work towards inclusive growth, combating corruption, promoting transparency and accountability, improving global competitiveness, achieving just and lasting peace, and upholding the rule of law.


And finally, I enjoin the Chambers to invest more in and do business with the Philippines, where you are considered not just ordinary business associates, and thank you for being here, but as valued friends, partners and allies.


I invite you to further broaden and deepen our partnership.


Thank you very much. Good afternoon.


[1] Member Economies: Australia, Bangladesh, Cambodia, China (Beijing), Guam, Hong Kong, India, Indonesia, Japan, Korea, Macau, Malaysia, Mongolia, New Zealand, Okinawa, Pakistan, Philippines, Shanghai, Saipan, Singapore, South China, Sri Lanka, Taiwan (Chinese Taipeh), Thailand, Viet Nam (Hanoi), and Viet Nam (HCMC).

[2] Hong Kong, Korea, Singapore, Taiwan

[3] “ADB warns of bumpy road into ‘Asian Century;’ / www.globalenergy

[4] “Asia-Pacific: Set to Become the World’s Fastest-Growing Region for 10 Years Running;” Economic and Consumer Insight with Sarah Boumphrey; 17 March 2014.

[5] US Secretary of State John F. Kerry Budget Speech (State and USAID); 04 March 2014.

[6] POTUS State of the Nation Address, 28 January 2014.