Proceedings of the Standing Senate Committee on
Foreign Affairs and International Trade
Issue 14 - Evidence - Meeting of June 18, 2014
OTTAWA, Wednesday, June 18, 2014
The Standing Senate Committee on Foreign Affairs and International Trade met this day, at 4:33 p.m., to study security conditions and economic developments in the Asia-Pacific region, the implications for Canadian policy and interests in the region, and other related matters.
Senator A. Raynell Andreychuk (Chair) in the chair.
[English]
The Chair: Honourable senators, I see a quorum. We are a little late due to the vote in the chamber.
Today, the Standing Senate Committee on Foreign Affairs and International Trade is continuing its study on security conditions and economic developments in the Asia-Pacific region, the implications for Canadian policy and interests in the region, and other related matters.
In our session this afternoon, we are pleased to welcome Mr. Eric Gerardo Tamayo, Chargé d'Affaires and Minister and Consul General at the Embassy of the Republic of the Philippines to Canada. Accompanying him are Mr. Porfirio Mayo, Jr., First Secretary and Consul at the embassy; and Ms. Flerida Ann Camille P. Mayo, Minister and Consul.
I apologize that we were late, but as you understand, the duties in the chamber and the votes are a command performance. Thank you for being patient.
As I indicated to you earlier, we're very pleased that you have come here to bring us some information and some of your perspectives on our study of the Asia-Pacific, in particular with your country, the Philippines. Welcome to the committee. I know you have an opening statement, and then we will go to questions. Please proceed.
Eric Gerardo Tamayo, Chargé d'Affaires, Minister and Consul General, Embassy of the Republic of the Philippines to Canada: To the Honourable Senator Raynell Andreychuk, Chair of the Standing Senate Committee on Foreign Affairs and International Trade, to the honourable members of the Standing Senate Committee on Foreign Affairs and International Trade, good afternoon.
As I begin, allow me again to manifest the presence of my colleagues from our mission here in Ottawa. To my right is Flerida Ann Camille P. Mayo, Minister and Consul, and to my left is Porfirio Mayo, Jr., First Secretary and Consul. Amongst ourselves, we divide various political and economic-related tasks and activities at the embassy.
Thank you very much for your kind welcome. It is truly an honour and privilege for us to come before you today and to provide you with security and economic developments in the Philippines as they pertain to bilateral relations with Canada and our broader linkages with our international partners. The time and privilege you have granted us is quite opportune, at a time when the Filipino nation just recently marked the one hundred and sixteenth anniversary of the Proclamation of Philippine Independence. Allow me to elaborate further on how such a milestone provides significant context to the current thrusts and pursuits of the Philippines in this day and age.
Not many know that after our first president, General Emilio Aguinaldo, had formed his government, he sent out the first Filipino diplomatic emissary, a man by the name of Felipe Agoncillo, to seek international support for the young republic. Mr. Agoncillo travelled to the United States and traversed Canada, passing through Montreal and Halifax and, perhaps presaging challenges in the conduct of diplomacy, even surviving a shipwreck from Halifax to Scotland to reach Europe, all in an effort to forestall the Treaty of Paris, which would have Spain cede the Philippines to the United States. However, global realities at that time would have the waning empire of Spain turn over the Philippines to the United States under that country's emerging expansionist foreign policy agenda.
The forefathers of the Philippine revolution imbue in Filipinos today a sense of mission and responsibility to uphold the principles of peace, freedom, liberty, democracy and the rule of law. This resonates within the august halls of this chamber, for these are the very same principles and advocacy of Canada, and the Philippine government today is following through on a commitment for far-reaching and lasting reform that stays true to such noble aspirations.
The Philippines is pursuing a definitive reform agenda. Our quest for freedom is a continuing undertaking, with the battle for freedom now being waged more on winning for the majority of our people true freedom from poverty and want.
The social contract of President Benigno S. Aquino III with the Filipino people has spurred the government to embark upon a transformative economic and political mission. That contract revolves around five action areas: good governance, poverty alleviation, sustained economic growth, justice and human rights and environmental protection, and climate change mitigation and adaptation.
The Philippines continues to make progress in many areas it has identified, and I shall highlight some of the noteworthy instances where our international partners, especially Canada, have come in to provide key assistance, share insights, best practices and perspectives in support of the initiatives of the government and in furtherance of our bilateral relations.
On the Philippine economy, our economic fundamentals are sound. In 2013, despite being in the pathway of the most powerful typhoon ever recorded in modern history that year, the Philippine economy actually grew by 7.3 per cent, far greater than the expectations even before the super-typhoon struck.
The International Monetary Fund ranked the Philippine economy the fortieth largest in the world, and according to the Hongkong and Shanghai Bank, our economy is on track to boast the sixteenth largest GDP in the world by 2050.
The World Economic Forum, which held its East Asia Summit in Manila last month, dramatically revised upward its outlook for the Philippines. In the past three years, the Philippines moved up in the competitiveness rankings of the International Institute for Management Development World Competitiveness surveys, and the World Bank has noted great strides made in the ease of doing business in the country. The Heritage Foundation notes how the Philippines has improved its standing in the Index of Economic Freedom. Moreover, the three major credit rating agencies of Moody's, Standard & Poor's and Fitch have all upgraded the investment grade status of the Philippine economy.
Many seasoned and astute analysts see a new dawn breaking for the Philippines, and they marvel at what they refer to as the "Philippine phenomenon," thus positioning the economy as a veritable dark horse for investment.
The economy is essentially paced by the services sector, now comprising about 57 per cent of GDP. Our manufacturing sector is seeing a resurgence, and we continue to increase our infrastructure spending, more than doubling it from around $5 billion in 2011 to more than $10 billion in 2014 for this year.
The Philippines' ability to build up $92 billion in foreign reserves in 2013, buffered by more than $22 billion in remittances from nationals overseas, covers our short-term external debt, helps weather global disturbances and even contributes to global rebuilding and recovery efforts to alleviate the lingering effects of global financial shocks elsewhere.
Our economic managers have managed to tame inflation, which was at a six-year low as at the end of 2013, at 3 per cent. Moreover, our public deficit was less than expected at the end of last year, at $4 billion from an expected $5.7 billion. The country ended the year with a current account surplus of $9.4 billion, or the equivalent of 3.5 per cent of our gross domestic product.
Among stakeholders and international partners from the public and private sectors, much bullishness surrounds growth in agri-business, business process outsourcing, the creative industries, and various infrastructure projects covering airports, power, roads and rail, seaports, telecommunications and water. We have also identified manufacturing and logistics, mining, tourism, medical travel and retirement as key growth areas. Meanwhile, our public-private partnership program seeks to build and renew the infrastructure backbone of the country.
In fact, with an average population age of 22 and above, the Philippines finds itself at the cusp of what they call a demographic sweet spot that is forecast to span the next 50 years, spurring greater productivity and consumption. Moreover, the Philippines now ranks fifth overall in gender equality, with women taking a significant stake in the economy.
Education and social services are given priority in the national budget. Functional literacy in the Philippines is at 86.4 per cent, with simple literacy rates applying to 92.3 per cent of the population. A shift to K-12 education harmonizes our educational system with the rest of the world and enables better skills matching and credentials recognition for the next generation of Filipinos. A conditional cash transfer program is added incentive that 2.2 million Filipino children stay in school.
The Philippines is one of the most mineral-rich nations on the planet, with a potential mining wealth of over $840 billion. The country ranks third in gold reserves, fourth in copper, fifth in nickel and sixth in chromite.
The inherent investment attractiveness of the Philippine revolves around the hospitable and westernized lifestyle conditions in the country and by having one of the biggest consumer markets in the world, 100 million population and counting.
The Philippines became the world's fourth largest shipbuilder in the world, and it is now a major global electronics assembly hub, a manufacturing centre for automotive components, a reliable logistic support service centre and among the best global business process outsourcing destinations in the globe.
In fact, shared service centres have grown by leaps and bounds. Many Fortune 500 companies make the Philippines the call centre capital of the world, as the overall global business process outsourcing industry grows among the Philippines, India and Canada.
Challenges do persist. The damage wrought by the approximately 20 typhoons that visit the Philippines yearly comprise the bulk of the economic costs the government perennially faces. Nevertheless, the Philippines demonstrates an uncanny knack for remarkable resilience. Beyond force majeure, the government continues to make headway on issues of primary concern.
President Aquino affirms that the Philippines is in the midst of a dramatic turnaround in every sector, and the government is intent on continuing this trend and making certain that each and every Filipino enjoys the full dividends of progress and brings down the unemployment rate, which stood at 7.3 per cent at the end of 2013.
Foremost on the agenda is the promotion of transparency by stamping out corruption, the goal of making the investment environment more attractive, helping industries become more competitive and exercising prudent fiscal management by increasing revenue and calibrating public expenditure. This growing momentum brings about a strong public consensus behind the president's reform agenda.
The government believes that many things can be done, especially with help from our friends in the international community, especially a true friend such as Canada.
The past three years have especially been significant in relations between the Philippines and Canada. A 2012 agreement forming the Joint Commission on Bilateral Cooperation, JCBC, builds on previous key agreements in investment protection and avoidance of double taxation and expands the collaborative agenda to cover a wider scope of various aspect of relations.
High-level visits and exchanges have taken place as well. President Aquino welcomed Prime Minister Stephen Harper to Manila in November 2012. Visits have also been undertaken by Foreign Minister John Baird, International Trade Minister Ed Fast, then Environment Minister Joe Oliver, Development Minister Christian Paradis and Parliamentary Secretary to the Foreign Minister Deepak Obhrai. Provincial premiers such as Christy Clark of British Columbia, Brad Wall of Saskatchewan and Greg Selinger of Manitoba have also led missions to the Philippines.
This year, we hope that a visit by President Aquino himself to Canada would materialize.
The economic relationship between the Philippines and Canada has come a long way since the establishment of formal diplomatic relations in 1949, and much longer, ever since Sun Life Financial set up shop in Manila in 1895, followed by Manulife in 1907. In the past few years, Canadian companies such as TELUS and CAE have established a presence in the Philippines.
Meanwhile, early this year, we inaugurated the special tourism program to be scheduled annually during the winter for Canadian snowbirds, which holds promise for further tourism flows.
Canada is one of the top 10 tourism markets for the Philippines. It ranked eighth overall in 2013, with a 3 per cent share of tourism arrivals for that year. About 131,381 tourists from Canada visited the Philippines in 2013, while about 65,000 tourists from the Philippines came to Canada as of 2012.
Canada, through various development aid initiatives, has helped enhance capacities for local government units, eased remittance flows, facilitated disaster mitigation measures and provided timely calamity response and relief.
Quite significantly, Canada has stepped up in facilitating peace and stability in the country, as it took an active and significant role in the recent success of the peace process in the southern Philippines and the breakthrough peace agreement between the Philippine government and the Moro Islamic Liberation Front.
On March 27, 2014, after more than 20 years of negotiations and an even extended period of animosity and conflict in areas on the island of Mindanao, south of the Philippine archipelago, the parties signed in Manila the Comprehensive Agreement on the Bangsamoro.
Canada was instrumental in making the process and of letting this agreement come to fruition. President Aquino noted the roles played by Canada as a member of the Independent Commission on Policing and Canada's contributions to the Mindanao Trust Fund.
Having been active in making the agreement a reality, Canada expressed its readiness to continue to assist the Philippines as it called on all Filipinos to continue to work together to ensure the success of the agreement, to implement it in good faith and to overcome the legacy of conflict.
Having come to a discussion point involving conflict and tension, honourable senators would be well aware of the recent developments in the West Philippine Sea, otherwise known as the South China Sea. The Philippines is taking a page from Canada's initiatives in the developing situation in that region.
As the situation stands of late, a major claimant party has taken increasingly assertive actions to consolidate its administrative jurisdiction and enhance its military presence in this important body of water. Contrary to the spirit of a regional declaration on the conduct of parties in the South China Sea, the unilateral actions of this claimant party are raising concerns in the region by its attempts to uphold and legitimatize dubious territorial claims based on arbitrary lines, which would be a palpable violation of the 1982 UN Convention on the Law of the Sea.
In the 1990s, Canada supported Track II initiatives centred on supporting maritime security initiatives in Southeast Asia. These dialogues may have wound down, but we underscore the continuing and pressing need for multilateral and multi-stakeholder approaches, as pursued then by Canada and relevant to the recent tensions of late.
At this point, the Philippines has exhausted the usefulness of the modality of bilateral negotiations in trying to achieve the objective of attaining a resolution of the maritime, and if possible, even the territorial dispute.
Moreover, with multiple claimants, a multilateral solution is required for the full resolution of any dispute. Accordingly, with this realization, we have recognized the necessity of going to arbitration as one way of resolving the dispute.
There is strong domestic and international support for the Philippine advocacy for peaceful and rules-based settlement of disputes in accordance with the universally recognized principles of international law. The operational application of a rules-based approach in the resolution and the management of disputes in the South China Sea involves the complementary components of the arbitration of maritime disputes under UNCLOS and the expeditious conclusion of a regional code of conduct.
The peaceful clarification of maritime entitlements in the South China Sea by way of third-party arbitration under UNCLOS promotes the primacy of the rule of law in interstate relations. The Philippines continues to exert efforts to move forward and enhance its relations with other parties on the basis of mutual respect and sovereign equality.
President Aquino has recently reiterated a call for broader support from the international community for the Philippines on this advocacy. The engagement of important and friendly countries in the region is critical, as this issue has fundamental repercussions on the peace and security of the Asia-Pacific, freedom and safety of navigation and commerce, and the long-term economic prospects and stability of the region.
This multilateral, rules-based approach is also consistent with what the G7 leaders in a meeting in Brussels, Belgium, earlier this month called for. The leaders expressed their deep concern over tensions in the East and South China Sea. The G7 nations will oppose any unilateral attempt by any party to assert its territorial or maritime claims through the use of intimidation, coercion or force, as they called on all parties to clarify and pursue their territorial and maritime claims in accordance with international law.
In light of these developments, Canada is well situated to leverage its position as a maritime country and promote peace and the rule of law in the region through multilateral engagements.
Moving outside of the internal and external conflict scenarios and into the dynamics of nature and climate change, Canada has stood by the Philippines. The generosity and kind-heartedness of Canada is indelibly etched in the hearts and minds of Filipinos. The federal and provincial governments of Canada and the Canadian people moved swiftly to come to our aid in the wake of Typhoon Haiyan. As the Disaster Assistance Response Team raced to save lives, Canadians themselves raised — and the Canadian government matched dollar for dollar — donations to a special matching fund that has now swelled to over $170 million. It bears noting that Canada had already committed to a disaster mitigation fund for the ASEAN region a few years back.
This brings to the fore one aspect of the Philippines-Canada relationship that stands out: the increasing people-to- people exchanges between our two countries.
The Philippines became the largest source of new migrants to Canada, as Filipinos now comprise the third largest foreign ethnic community in the country. Tagalog became the fastest growing language in the country. Canada's unparalleled openness, its emphasis on multiculturalism and diversity, and its overall welcoming environment provide an enabling backdrop for Filipino migrants who now call Canada their home and who have now taken on the role as proactive, caring and responsible citizens and stakeholders in Canadian society.
Apart from the regular migration streams, the Philippines also became a significant source country for the Temporary Foreign Worker Program in Canada, under a program defined and implemented by the Canadian government over the past few years. As such, we have put forth manifestations to continue working on and strengthening labour cooperation with one another at the provincial and federal levels.
After all, remittances by Filipinos in Canada registered the highest per capita remittances among the top 10 destination countries of overseas Filipinos in 2012, with total remittances of $1.97 billion.
Now more than ever, Filipinos in Canada are enriching the social and cultural fabric of Canadian society. It is quite evident that the shared values between both peoples of the Philippines and Canada facilitate such seamless people-to- people interactions and relations.
In his message to the growing community, Prime Minister Harper praised how the growing Filipino community continues to make enormous contributions to Canada in many areas of endeavour, helping to build a stronger and more prosperous Canada while further improving our bilateral relationship with the two countries. In a nutshell, Filipinos in Canada help their fellow Canadians and their employers build better lives. Suffice it to say, Filipinos in Canada help enterprises create jobs, increase productivity and enhance the quality of life of Canadians themselves.
It is clear that the Philippines and Canada are in an upward economic trajectory and undergoing significant transformation, and much of this development is primarily founded on the very people — hardworking, compassionate and determined — who make such growth and opportunity possible and attainable for the benefit of all.
For Canada, much of the stellar and remarkable economic growth has been due to the foresight in recent years to adopt an outward-looking, more global economic agenda, to create jobs, and to promote a better quality of life for Canadian families. Now, many Canadian enterprises look to Asia and ASEAN for value and growth.
ASEAN has been identified as a key market in the new global market access plan of Canada. The ASEAN economic community, or AEC, is just around the corner, as ASEAN realizes the dream of a common market at the end of 2015.
Earlier this month, a significant milestone was achieved in ASEAN-Canada relations when Minister Ed Fast personally welcomed and cultivated close friendships with his counterpart trade and economic ministers among all 10 of the ASEAN member countries. The minister's message was very clear: Canada wants to be a preferred partner of ASEAN, and Canada intends ASEAN to be one as well.
Certainly, nurturing partnerships with the Philippines would be strategic and critical in the dawning era of the AEC, and Canadian companies may do well to look at establishing their respective beachheads in ASEAN through the Philippines, whether pitching their products and services to the country or the region as a whole. In the end, a highly educated, highly adaptable, English-speaking workforce in the country lends itself well to good labour-employer relations and providing unbeatable value for any enterprise and economic endeavour.
The excellent relations between the Philippines and Canada provide the impetus to a robust socio-cultural and entrepreneurial partnership, and we look forward to accomplishing more together towards creating value and improving the quality of life for Canadians and Filipinos alike. Thank you very much and good afternoon.
The Chair: Thank you for that very extensive statement. I think you've virtually covered every area that could possibly be of concern to us.
I do have a list of senators who wish to ask questions. We now have a limited time, so I'll ask you to be as short as you can in your questions.
Senator Housakos: Thank you, chair, and thank you to our witnesses for being with us.
Indeed, Canada does value the good relationship we have with the Philippines, and we also value the great pluralistic, multicultural and bilingual society we've managed to build in this country with the people who come to our shores from all over the world, including the hundreds of thousands of Filipinos that have made great contributions to our country.
One of my questions is with regard to religious diversity, tolerance and mutual respect. The Philippines, like the whole Southeast Asia-Pacific region, currently has a multitude of growing religious groups, and at times there are tensions that do fester.
I was wondering, what is the current state of that issue in the Philippines? What is the state doing to promote multi- faith existence within the country?
Mr. Tamayo: Thank you for that question. Certainly, one very tangible manifestation of promoting diversity and tolerance is that the Philippines of late has enacted laws to mainstream religious holidays in the country in recognition of these important milestones in the faith of our non-Christian communities, especially south of Mindanao.
Much interfaith activity is also taking place, especially at the level of civil society, where there is an increasing awareness of the need to help in mainstreaming and integrating the values of minority and indigenous groups in the Philippines. We certainly are looking at how Canada has successfully integrated in the mainstream its minority in the First Nations groups and how it is implementing this policy of diversity and multi-ethnicity. We would like to take a page from that as well.
[Translation]
Senator Fortin-Duplessis: Welcome, Mr. Tamayo. I have a brief comment to make, but that is not what my question will be about. The trade and investments between Canada and the Philippines total close to $1.7 billion. However, our trade balance with your country is largely unfavourable. Perhaps there are avenues that have not been explored up till now that could bring our trade balance into line. Could you tell us more on that topic? I will also have another question for you.
What are the main difficulties encountered by the Canadian companies and the other foreign companies that want to do business in the Philippines?
[English]
Mr. Tamayo: The common thread that we have received from investors lies in some restrictions found in law and based on our constitution, which lies primarily in areas that are restricted to foreign nationals, in which other countries are interested to come in.
Some of these are structural in nature and require some degree of change and amendment to our law and to our constitution. Our government is looking at this and seeking ways to alleviate these concerns, but certainly the solution that we see here is that there would be a need to amend certain laws in the constitution itself in order to open up some areas for investment.
That is what the analysts and observers have noted. We have made substantial headway in attracting businesses to do business with us, inasmuch as we have made quite a modest success in easing the activity of opening a business in the Philippines. So along these lines, we are, I think, getting some headway.
[Translation]
Senator Fortin-Duplessis: What are those impediments? Can you list them, or are they secret and known only to your country?
[English]
Mr. Tamayo: No, not at all. We can leave the committee with some information on the investment climate in the Philippines, which highlights the list where that would be confined to Filipinos and where foreigners can come in. This is what they call a "blacklist," and we can provide the committee with this.
[Translation]
Senator Fortin-Duplessis: I would still like to know what sectors are closed to Canadian investment.
[English]
Mr. Tamayo: First place, the retail industry. This is very much confined to Filipino businesses. Also the public services, those delivering energy, water and telecommunications, are pretty much confined to business in the Philippines. The retail is the Bay, Walmart or Target trying to get a foothold into the Philippines on their own. They would have to partner with Filipino companies in this regard.
Senator Jaffer: Thank you very much for your presentation. As Senator Housakos said, we have a very large diaspora from the Philippines and hold all the things you were saying close to our heart. You spoke about signing an agreement with the Moro Islamic Liberation Front. How successful has the government been in implementing the terms of the peace deal? More importantly, we know that where they have succeeded, the region is very poor. What steps are being taken to help get people out of a terrible poverty situation?
Mr. Tamayo: Thank you for that question. The agreement was signed in March of this year. The implementation will be monitored over the next couple of months, and we have invited our international partners to ensure that the provisions of the agreement will be implemented.
The tangible effects of the agreement, of course the first benefit of the agreement is establishing peace and stability in the region. You may share the view that establishing this very fundamental condition lends itself well for further economic activities in the region, and that part of the region is certainly among the more depressed and underdeveloped in the Philippines. There is an agreed apportioning of governance areas that will be devoted and reserved for the local governments there, in the areas that will be reserved to the national government, much like the federal law in Canada reserves certain activities at the federal level and reserves several initiatives under the provincial level. This includes taxation and the creation of government-owned and -controlled corporations, in order to provide the leaders in those regions the ability to act quickly and to implement programs directly that will benefit the local community. We hope to see them implement that in the next couple of months.
Senator Jaffer: My question was what support are they getting to get out of the very desperate poverty situation? The study we are doing is on security, and the concern is if they continue to have terrible conditions, are you not worried that they will return to violence if they're not supported financially to get out of the poor situation a lot of people in that region are in?
Mr. Tamayo: Certainly the agreement has raised hopes in the community for better outcomes and for better lives of the people concerned. We are certainly talking with our international partners. I think Canada is exploring ways to provide work on development initiatives in that part of the world; and that region is also a beneficiary of the conditional cash transfer program, which I referred to in my remarks.
They provide for specific areas where women and especially children will benefit. A part of the conditional cash transfer program concerns cash grants and also what we refer to as facilitating environmental protection activities and also micro-enterprise development and guaranteed employment tracks that would hopefully benefit thousands of beneficiaries in that part of the country.
It is part of this comprehensive poverty alleviation program undertaken by the government, which we hope will extend immediately to the stakeholders in the Bangsamoro region.
Senator Oh: Thank you for being here today. The Philippines has the fastest growing market in Southeast Asia, and I also understand that the Philippines has recently been described as the next Asia high-tech tiger, and more than 60 per cent of Filipinos own a smart phone. Can you talk about the leading industries in the Philippines where Canadian capital can be invested?
Mr. Tamayo: Certainly we would like to provide Canadian venture capitalists, financial institutions and even angel funders information on the opportunities that present themselves, especially in the information technology sector. The IT-enabled services in the Philippines have grown by leaps and bounds, and this development is fairly new; it just occurred in maybe the last 14 years when the Philippines invested heavily in IT-related infrastructure.
We're seeing the benefits of having done so by having a lot of the IT companies come to the Philippines and either outsource some of the services that they have or engage our experts and our specialists in providing key services all over the world.
That's on the services side. On the manufacturing side, the bulk of the exports of the Philippines, especially into Canada, have been the electronic components. A lot of these are OEM-type of components, but increasingly a lot of our OEM manufacturers are contemplating undertaking more mainstream activities that cater to consumer goods. These are probably good areas of investment for many Canadian venture capitalists and funders.
The opportunities are not confined to the IT sector, because even the various foreign chambers in the Philippines have identified at least seven sectors that foreigners can invest in.
The IT sector is just one of them. We have the agribusiness, the creative industries, the manufacturing and logistics operations, mining, tourism, medical travel and retirement. In the infrastructure, you have the airports, the seaports and the toll roads. These are certainly open, and we have embarked on the public-private partnership program, which can be likened to Canada's own 3P initiatives that seeks to draw investments into various projects that require a high level of funding and investment.
Senator Oh: Your telecommunication business is open to foreign investment?
Mr. Tamayo: The telecommunication sector itself is regarded as a public utility, which at the moment is restricted only to Filipino enterprises. Foreigners can come in if they partner with a Filipino enterprise.
The telecom industry is at the moment subject to the restrictions that are mandated by our law.
Senator Johnson: I am from Manitoba. Philippine immigration to my province in the 1970s was the biggest in the country and underpinned our province's textile industry, so thank you. How many more Filipino people do you expect to come to Canada in the next few years? Are they going to be doing the same kind of work that they have been doing? What are you looking at in the future with your immigration?
Mr. Tamayo: Thank you very much. Actually, because of the growth of the Filipino community in Manitoba, especially Winnipeg, Manitoba by far has the largest proportion of Filipinos of any province in Canada. I think 5 per cent of the population would be of Filipino origin. We have proposed putting up a consulate in Winnipeg.
Senator Johnson: That's a great idea.
Mr. Tamayo: And hopefully we will get to that. Manitoba is one of the provinces where we have a labour cooperation agreement. In fact, it is regarded as a model that we follow. If we're contemplating other agreements with other provincial governments, we hope to pattern that, should there be an opportune time to undertake a similar one at the federal level.
As to the flow of Filipinos, I take it Statistics Canada has projected or estimated that by 2020 there will be a million Filipinos in Canada. That's an increase of about 250,000 or 300,000 from current numbers based on the last census in 2011. Where those Filipinos will end up, we don't know. I guess it depends, in Canada, on how they implement their current migrant program and especially how they plan to enhance the other streams for how other foreign nationals can come into Canada.
So we will be monitoring and awaiting the decision of Canada on that matter.
Senator Johnson: Are there many Filipino students studying in Canada? Is it increasing or decreasing?
Mr. Tamayo: It is increasing. The numbers I have pale in comparison to other countries like China or Vietnam. It is almost a thousand as of 2012. It is certainly a number we would want to increase as well, and there are various modalities that may make themselves available for us, like the national exchange Canada program, or other youth mobility agreements that would perhaps be devoted to the student sector.
Senator Johnson: I know the model you have with Manitoba is your template for the future. When do you see it being implemented across the country or federally?
Mr. Tamayo: That is something we would want to continually engage the federal government in, but in the meantime, we are set to have a similar agreement with other provinces as well, and we are working on finalizing one or two other agreements in the near future.
Senator Ataullahjan: Thank you for your presentation here this afternoon. The Philippines differs from other nations because it is an island economy. You have close to 7,000 islands. Recently the country has moved from a highly centralized system to decentralization supporting local autonomy and good governance. What's the progress on decentralization? Do you think there will be an eventual movement towards federalism?
Mr. Tamayo: The federal aspect has been the subject of debate, especially in the early 1990s with the issue of devolution to local government units. That law we passed in the 1990s devolved much of the powers of the national government to the local government units.
The thrust is really to empower these LGUs. In fact, one of the aid programs developed by Development Canada involves capacity building at the local government level. We are definitely seeking ways to enhance the capacities of the local government units, the LGUs, in this regard.
There is some semblance of a federal-style setup; for example, the recent Comprehensive Agreement on the Bangsamoro would have some elements of federal style, but then again it is not an indication that we are going in that direction. It is basically towards a greater degree of autonomy granted to regional areas in the Philippines. We have one also in northern Luzon, the Cordillera Autonomous Region, and this is more to address the concerns and needs of our indigenous peoples, from the native Filipinos — our version of First Nations, or Lumads as we call them, indigenous folks — whom we hope to empower more. The federal direction will be the subject of some more debates the next few years.
Senator Demers: Thank you, Mr. Tamayo. I have a group of questions. I know we are running out of time, but hopefully you can answer some. There are difficult challenges ahead: peace, stability, that's what all people want, accelerating economic growth, corruption. These things are so important for people to be able to live in peace and stability, and certainly corruption.
I don't know if you are in a position to talk to us about that. How do you foresee the possibility of attaining those objectives, sir?
Mr. Tamayo: We have made significant gains in our effort towards inclusive and sustainable growth for our people. In assessment of our medium-term development plan, we realized that economic growth, while it is essential, must not automatically come down to poverty alleviation.
In technical terms adopted by our experts, they refer to it as spatial and differential approaches. It basically involves taking into account different kinds of growth dampeners, as we call it, and also tweaking other demand and supply side areas of the economy where we can hope to accelerate the benefit for our people. As far as the government is concerned, what it would like to do is basically build the necessary infrastructure and make sure that the implementation of these infrastructure projects is undertaken with minimum delay and with utmost transparency and accountability, minimizing corruption. The government is focused on areas where it can have a hand in defining the direction of economic activity in the country.
Much of it is relegated to how the private sector responds to government initiatives, and so far we have seen that our private sector has been taking on the challenge of our government to come into key infrastructure projects to enhance market access, generate deployment and level the business field for many of our enterprises.
The key is enabling our small and medium-sized enterprises to have a bigger share of our output. Right now, these SMEs, which comprise more than 99 per cent of the business in the Philippines, are only responsible for about 35 per cent of total economic output in the Philippines. We would like to see that increase a bit more. We would like to provide them with enabling conditions for them to do business in a straightforward manner, and without concern for whether or not there will be areas of corruption or of other questionable practices.
The Chair: Senator Smith, was this a supplemental or a separate question? Senator Housakos would like a supplemental on this and then we would go to you, but if yours is supplemental, you go ahead.
Senator D. Smith: I'm happy to defer to Senator Housakos.
Senator Housakos: You are very kind. I have a supplementary question to Senator Demers' question on crime. We can appreciate that the government wants to deal with the issue, but maybe you can tell us more specifics on what they're doing.
In order to enhance international investment and get more international commercial interest into the Philippines, the best way is to show concrete measures against crime. Would you be in agreement that in the last while there's been a propensity in the country to see crime, when it comes to human trafficking, on the rise. With the black market economy, as well, there seems to be a propensity to be on the increase. There seems to be an increase in the frequency of maritime sea piracy.
What has the Philippine government done in all three of those areas concretely to try and curb the growth of crime in that aspect?
Mr. Tamayo: In terms of security, there is an effort to step up police visibility on the ground to address the issue of crime. That is within the streets of urban areas of cities. When it comes to patrolling the borders and combatting piracy, especially, the Philippine government is embarking on a program to upgrade our patrol boats and is even considering and contemplating undertaking joint training programs with other countries like Canada, all in an effort to combat piracy and stem smuggling into the country and of course enable our businesses to be able to compete fairly in the market.
We have also recently upgraded our air capability. We bought some helicopters from Canada. This, again, is one of the measures that we have undertaken to ensure the security and integrity of our borders and to facilitate the flow of commerce and the flow of goods in and out of the Philippines.
Senator D. Smith: This really doesn't have anything to do with the Senate, but I always remember flying over some of those islands in the southern part of the Philippines where there had been troubles and the MILF. I might say that I was really pleased to learn about this accord. I don't know how much, when they were doing these bad things, was being helped from people from other countries, but, given this accord that was achieved, do you really have the feeling that the worst of that experience is behind you and that it's looking pretty positive in terms of the stability of that part of the Philippines?
Mr. Tamayo: Certainly. The MILF constitutes the largest insurgency that the country has seen in the past few years, even larger than the previous insurgency under the separate Moro National Liberation Front. Certainly, there will be some disgruntled elements, those people who may not agree with the agreement. It would not be unexpected to have some small factions separate from the agreement, but, by and large, we think that this agreement builds confidence in the sincerity of the government, especially as it deals with other insurgencies like the communist insurgency that is still ongoing.
The result is certainly a broader stakeholder consultation that has been undertaken. It involves a very wide sector of all stakeholders in that part of the country. We think that, by having their buy-in in this agreement, we will see that they will give this agreement a chance, especially in the short to medium term.
Senator D. Smith: That's good. Obviously, in terms of foreign investment, you want a security level that you feel pretty good about. I wish you well on that. I think it was quite an achievement because I know that some of them were pretty extreme. So congratulations on that.
Mr. Tamayo: Indeed. Thank you very much for that.
The Chair: On that positive note, we've come to the end of the hearing time. I appreciate the fact that you had to wait for our committee. You've certainly give us a lot of material. It's very helpful in our work, and because we have to continue onto our next session, I'm going to be very quick in my appreciation to you. I trust that you will continue to follow our work and look forward to our report in the fall. Thank you, Mr. Tamayo and your team.
(The committee continued in camera.)