I deeply appreciate the generosity of your invitation, but I must confess to some misgivings about your choice of guest and TOPIC FOR this occasion. 

            The topic you have chosen---“Prospects for the Philippines: The Rough Road to Change”---is a formidable one, and the subtopics you want highlighted on the economy, national security and foreign policy  make it even more so. 

            The most authoritative official statement on this subject can only come from the President himself or, in his absence, THE CABINET.  Obviously I am neither. 

            So WHILE I am pleased to place myself at your disposal, I hope the Foreign Correspondents Association of the Philippines (FOCAP) will not be faulted for CHOOSING SOMEONE with less than perfect credentials for this important forum.

            As Vice President, I sit  in the Cabinet as chairman of the Housing and Urban Development Coordinating Council (HUDCC), presidential adviser on Overseas Filipino Workers Concerns, chairman emeritus of the Inter-Agency Committee Against Trafficking (IACAT), and head of the task force against illegal recruitment. 

            It is a 24/7 job that leaves me very little time for anything else. 

            I hope I have responded and continue to respond adequately to the multi-faceted and ever-growing demands of the public.   But outside of my specific areas of responsibility, my views on anything else must admit of very serious limitations. 

            Any idea or insight which I may have on any issue not germane to my official duties can only have a persuasive effect on the crafting  of  policy and the general conduct of government.  

            With that understanding, I now put myself in your hands.

            What are the decisions that President Aquino and his administration must grapple with to harness the Philippines’ potential amid the political, economic and security upheavals around the world?   This is your first big question.

            The global economic breakdown, which began in 2008 in the United States and Europe, has caused an irresistible shift of economic power—soft power---from the West to the East, from the Atlantic to the Asia Pacific.  We MUST BENEFIT from that shift. 

            The unchallenged consensus is that by the year 2050, China will become the world’s undisputed economic leader, surpassing the United States. India will overtake Japan and Germany, falling just a little behind the United States.  The global research department of HSBC predicts that the Philippines will leapfrog 27 places to become the world’s 16th largest economy.  

            This forecast cannot possibly be based on future policy decisions, which nobody knows today.  It can only be based on certain basic country strengths which, if sustained, can only bring about the predicted results. 

            What may these be? The first things that instantly come to mind are demography and democracy.   I will say something about demography first, and about democracy later. 

            Demography is destiny, to quote an online website.  By 2050, there will be more sixty-five year olds and above than fifteen year olds and below in the developed world. The demographic winter will have become a full-blown AND UNDENIABLE reality in all of Europe, Russia, Japan and most of the developed world.  

            The Philippines, with ITS YOUNGER work force and its dynamic and still self-renewing population, equipped with knowledge and technical skill, will have every unimpeded opportunity to forge ahead, without the demographic problems of the West. 

            But this opportunity  needs to be nourished and sustained by the correct political, economic and social policies in the next forty years.  And this nourishing and sustaining  begins today. 

            We need to protect and safeguard our population against the dangers  that brought about the irreversible decline of the West.  We need to  invest in our families, in the education, training, and health care  especially of our youth and women; we need to  equip them with sufficient skills and work habits to give them a big competitive edge in the global market. 

            We have the resources to make the country a leading center of information technology and knowledge, and a favored destination for investments and tourism.   We must exploit those resources to the fullest.

            Tourism and information technology are only two of the primary industries we must develop to sustain our development and growth. But these two alone can create enough new and highly paying jobs to keep  our best men and women with their families here  rather than abroad, and put us head to head with our neighbors who are already far ahead of us in these fields. We only  need to be single-minded in creating our own advantage. 

            We need to spend enough on the future.  If we do not have the basic resources, we must have the will to create  those resources that will ultimately generate development and growth.  The human being is our first and last resource; we must invest in our human population, as a matter of first  priority.  We must learn to focus on our priorities. 

            We must learn not only to start projects, but above all to finish what we start and to maintain what we finish,  according to the highest standards.

            This entails not only a plan or program with implementing details. It entails above all  a specific ethic, without which no plan or program or project could have any meaningful or lasting effect.

            The forecast for 2050 should not blind us to the reality of our present situation.  Crisis persists, and it is a global crisis. It covers  everything----climate and the environment, energy, persistent poverty, increasing inequality, deficiencies in governance and accountability in a wide range of organizations and activities, from local to international. 

            Each of these global problems has a domestic dimension, if not origin.  Thus, it stands to reason that while our policies must be rooted firmly on the local earth, they must be framed from a global perspective. 

            Future cooperation between and among nations will be forged, and future inter-state conflicts and wars  will most likely be fought over  the most basic resources---basic metals, energy, food and water. As of now, hundreds of billions of dollars are being expended in Asia, Eurasia and the Middle East on the construction of long pipelines to transport oil, gas and probably eventually water, from one country to another.

            The debate on what energy source should dominate the future has become open-ended. But the attempt of the major players to control the supply of gas and oil, not to mention nuclear energy, persists. 

            Our policy planners must be particularly sensitive  to this development. There is a distinct possibility that what we once knew as the global war on terror (GWOT) could morph fully into  a global energy war.  We cannot escape this.  Wittingly or unwittingly, we shall find ourselves part of it.  This requires a comprehensive  energy development program that looks to our mineral and energy resources on land and offshore as the foundation of  our strategy for national defense and development.

            How can we cushion the impact of the euro-zone debt crisis and the weak US economy on local industries and Overseas Filipino workers?   That is your next big question.

            I will not want to  usurp the authority of the Central Bank governor or our economic managers by  responding to the monetary and financial aspect of this question.

            But I am prepared to learn from the recommendations of the 2010 UN Commission of Financial Experts headed by the Nobel Prize laureate in economics Josef E. Stiglitz, and tasked to propose reforms of the international monetary and financial systems in the wake of the global crisis. 

            The Stiglitz report talks of the causes of the crisis. It  could serve as a helpful guide in avoiding the full impact of the global turbulence.

            The report points out that because poor countries have almost no say in designing the rules of the game, many rules that are supposedly intended to benefit them eventually end up harming them instead. 

            The Report  also notes that the unregulated financial sector has systematically failed to perform its key role of allocating capital and managing risk at low transaction cost. 

            One major problem is that economic globalization has outpaced the development of political institutions required to manage it well.  The Report’s net verdict is that neither globalization nor financial markets have performed well.

            One apparent advantage in our favor is that because we have not been fully  globalized, the globalization of unregulated markets and financial instruments has failed to affect us as much as it has harmed  others.

            The challenge to us now is how to protect our economy not only from the external policies that brought about the global crisis, but also from the policies that some countries have adopted or will adopt in order to get out of the crisis easier and faster.  

            These could include policies that breed unfair competition, and create unfair subsidies and regulations that  allow their exports to beat all competition. 

            What do we do then? 

            The global crisis gives us lead time to do better than Europe,  the US, and all those who have been hit the hardest.  We have to do more, and at a faster rate, of the things we have been doing well,  knowing that the rest of the world will not be in a crisis forever. We have to have a holistic approach to development, with the end in view of giving the world a surprise about what we can do beyond what the experts predict. 

            We need to transform our nation in every way---from its  physical appearance to its  spirit and substance---and this we can begin to do by  giving everyone a chance to own a home and a livelihood and making them real part-owners of the economy, as we are trying to do at HUDCC.

            We must put everyone  to work, build a strong entrepreneurial class, and turn the nation into a nation of producers and consumers. 

            We have to create an educated, highly skilled, and dependable work  force,   so that wherever our workers go,  they would be prepared to compete with the best  and make a genuine contribution to the economy.

            We have to build a cosmopolitan country where agriculture is not pursued at the expense of  industry nor the countryside completely obliterated by the city, and foreign capital and workers are welcome to participate in every possible undertaking except perhaps those directly related to national security. 

            We have to transmit to the future a working constitutional democracy that has permanently outlawed corruption not only by going after the corrupt but above all by eliminating bad laws and bad structures that had given  corruption a nearly permanent  refuge. 

            As a nation, democracy should be the most significant item in our resume.  It must survive all challenges and pitfalls.  But we must all realize it is under serious stress today.  Writing in the January-February 2012 issue of Foreign Policy,  Zbigniew Brzezinski, national security advisor under US President Jimmy Carter and author of the forthcoming book, STRATEGIC VISION: AMERICA AND THE CRISIS OF GLOBAL POWER, says that with the decline of American power, democracy everywhere  will be on trial. A Hobbesian world of enhanced national security based on varying fusions of authoritarianism, nationalism and religion could ensue. Weaker countries will be more susceptible to the assertive influence of major regional powers. The potential for regional conflict is real. Global reality will be characterized by the survival of the strongest.

            This necessarily raises questions about OUR FUTURE security, in the face of our territorial dispute with China AND OUR still unliquidated national insurgencies.  There is still no substitute for diplomacy in resolving these issues, AND greater patience and resolve are still our best options to adopt, AFTER INITIAL peace efforts have failed to end the insurgencies.  We just have to keep on trying until we succeed.

            But for democracy to work, we need democrats who will make its institutions work.  Even as we meet here today, THIS THESIS is being tested in the Senate, where the impeachment trial of Chief Justice Renato Corona is taking place. 

            This is the second time in 12 years that we are witnessing such a process. In 2000, the first Senate impeachment trial was held against a sitting president, Joseph Ejercito Estrada.  That trial, however, was not completed.  The prosecution had wanted the impeachment court to admit certain evidence volunteered by outside parties without a court subpoena, and intended to prove a charge which, in the judgment of the majority of the Senator-Judges, was not in the original Articles of Impeachment. When the impeachment court refused to admit the “evidence,” the prosecutors walked out, and the issue was finally decided against Estrada by the fiercely anti-Estrada crowd at EDSA. 

            Many of us were euphoric about that decision. But it took the rest of the Gloria Macapagal Arroyo presidency to make everyone realize that the constitutional shortcut was a ruinous mistake.  It was wrong to have allowed enraged public opinion, rather than due process and the rule of law, to take control of the constitutional process, and to HAVE ALLOWED the impeachment trial to be aborted because of pressure from the streets. 

            The fact that former president Estrada today appears TO ENJOY WIDER PUBLIC support than former president Arroyo IS FURTHER confirmation of that painful mistake.  It seems, therefore, obvious that if there is anything we could learn from that first impeachment trial, it is that we should not repeat any of its mistakes. 

            Our common objective and desire should be to make sure that due process and the rule of law are observed, that justice is served and our democratic institutions preserved, and that at the end of the day, our people stand united in supporting the just outcome of the process, and in forging ahead. 

            Thus, UNLESS WE SEE A serious breach in the proceedings, OUR common task is to LEND TO the Senate trial our attentive and respectful silence.  It is in our highest national interest that whatever the outcome of THIS IMPEACHMENT trial, it should succeed as a fair and just constitutional process. that would define our maturity as a democracy and our right and fitness to forge ahead as an independent AND SOVEREIGN state.

            Thank you and good morning.