RAMOS TO AUSTRALIA: JOIN US IN ASEAN
From ERIC ELLIS AFR Correspondent In Manila

02/23/1994
ASIA'S basket-case economy, The Philippines, is on its way up, and President Fidel Ramos wants Australian investors to participate in the revival.
In an interview with The Australian Financial Review at Manila's Malacanang Palace, Mr Ramos claimed that his country was heading for "Asian tiger" status by the end of the century.

He also joined a growing band of Asian leaders to welcome Australia's increasing economic presence in the region - even agreeing that Australia could one day join the Association of South-East Asian Nations.
"I say by all means join us," Mr Ramos said of the Australian Government's diplomatic efforts to forge an Asian profile. "When we talk about Asia-Pacific we want to make sure that we are also including Australia and New Zealand."

The Philippines, Asia's richest nation before the Marcos kleptocracy made it one of its poorest, now largely lives in poverty, prone to power shortages and still adjusting to the economic impact of the US military withdrawal in 1992.

Its economic links with Australia are characterised by a massive trade imbalance rooted in the Philippines' lack of manufacturing competitiveness. Manila is Australia's ninth most important trading partner, taking just under$600 million dollars worth of imports in 1992-93 and exporting less than $200 million to Australia.

President Ramos called on Australian consumers to correct the imbalance. But he has a giant task ahead of him.

The Philippines' relative uncompetitiveness is only intensified by the emergence of Vietnam as a source of cheap labour. It is significant that Australian firms pushing into Asia have chosen Vietnam ahead of the Philippines.

As a senior diplomat at the Australian Embassy in Manila noted, "there are only so many cane chairs we can buy".

Mr Ramos was asked if he could see Australia becoming an ASEAN member (the grouping of the Philippines, Malaysia, Indonesia, Brunei, Singapore and Thailand). He said: "I don't think they (ASEAN) ever close the door but there is a process of accession. That kind of thing could be encouraged."

ASEAN is an institution close to the president's heart. His father, a former Filipino Foreign Minister, signed Manila into the group in 1967.

While the Prime Minister of Malaysia, Dr Mahathir Mohamad, has poured scorn on Australia's Asian identity and worked to sideline the emerging Asia Pacific Economic Co-operation forum, other ASEAN leaders have been more welcoming.

The Ramos vision for a so-called New Philippines is exemplified by the vast former US Navy base at Subic Bay, 138 kilometres north of Manila.

Here, where some 40,000 US Marines and 60,000 Filipinos once manned a mighty US military installation, Mr Ramos is vigorously marketing its transformation into a regional free port. He believes that one day it will rival Hong Kong and Singapore.

He recently escorted Dr Mahathir and the Taiwanese President, Mr Lee Teng-hui, on a tour of the vast complex, where much of the $US8 billion($11.26 billion) the US spent on infrastructure is still in place.

The pull-out in 1992 made jobless as many as 400,000 Filipinos who had directly and indirectly depended on the US military for a living, from the 2,500 prostitutes to drivers, suppliers and clerks keeping the Pentagon's books.

Two Australian companies have operations at Subic. One is the Tasmanian-owned textile manufacturer Dasuna Ltd, and the Sydney-based engineer Ectec Ltd is one of the base's biggest investors, making port cranes.

"This is a classic swords to ploughshares story," says the chairman of Ectec, Mr Peter Cannon. "It's a sensational site. You couldn't get better than this anywhere in the world."

Eighteen months into the Ramos presidency, it's clear that the foreign investment community has staked more on him than in the six years and nine coup attempts that marked the transitional Aquino Administration.

With a rise of 150 per cent over that period, the Filipino stockmarket was Asia's best performer - third in the world after Poland and Turkey.

After hitting economic rock-bottom in the wake of the US departure -military spending was estimated to have contributed five per cent of the Philippines' GDP - Mr Ramos is determined to bring Manila into the Asian mainstream.

Working within the confines of a strict International Monetary Fund regime, the Philippines is expected to post growth of 4-4.5 per cent this year. Morgan Stanley sees capital formation and new infrastructure contributing 25 per cent of GDP this year.

The volatile peso has stabilised at around 27 to the $US and inflation has settled at around 7-8 per cent.

Most importantly for foreign investors, political stability is returning.

Mr Ramos, the West Point-trained former chief of the Armed Forces who carried the People's Power Revolution for Mrs Corazon Aquino, is warming to his new role as statesman- salesman.

"If you are looking for a quick profit go to other places," he said. "If you are looking for continuity, predictability, democracy, you come here. You don't need an interpreter here."