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A Peace with Freedom

Joseph Ejercito Estrada (

Joseph Ejercito Estrada (

The report attributed the creditable performance of the Philippines during and in the aftermath of the crisis to "favorable starting conditions" and sound economic policies and management.

The first refers to the fact that, compared to our neighbors, the Philippines had less time to enjoy the Asian boom - and therefore less time to overload on cheap foreign credit and its other excesses - before the crisis struck. It is the second, however, the sound economic policies and management, which is the more interesting story but which, unfortunately, is often brushed aside.

The Philippines is one of the most open economies, a result of a series of market-oriented reforms to liberalize, deregulate and restructure the economy that our government started putting in place since 1986, and a legacy that my administration continued. These reforms and policies had the effect of making the economy more resilient to cope with the crisis when it came.

Specifically, barriers to investment were removed in key industries such as power, telecommunications, banking, insurance, domestic aviation, oil and mining, foreign exchange controls were lifted after 40 years of a regulated regime. The entry of foreign equity and investors was facilitated. Import restrictions were lifted and tariffs reduced.

Despite the many calls to resort to protectionist measures during the crisis, my administration continued to uphold these policy and structural reforms. The alternative would have seen a reversal of the gains from deregulation and liberalization.

Beyond those basic macro-economic reforms I have just mentioned are other areas that have received the priority attention of my administration.

I am happy to inform you that in recent months we had several home-runs with the Philippine Congress, and we anticipate more in the next few months.

Last March, I signed into law the new General Banking Act, which, among other things - enables the adoption of internationally accepted banking supervision and regulation standards. In the same month, we enacted the Retail Trade Law, which opened our retail trade to foreign companies after a century of protection.

Last June, about two weeks before the US Congress was able to do the same, our Congress passed a landmark E-Commerce Act. This Act provides the legal framework governing both commercial and non-commercial transactions through the Internet. It provides penalties for computer crimes.

Finally, just two weeks ago, I affixed my signature to a new Securities Act, which aligns the regulation of capital markets with international practices on full disclosure. The Act is a milestone in our efforts to reform and deepen Philippine Capital Markets.