:00:00. > :00:00.treatment. More on our top stories at nine. Now
:00:00. > :00:08.on BBC News it's time for Talking Business with Linda Yeuh.
:00:09. > :00:14.Six months on from a devastating typhoon, the effects are still being
:00:15. > :00:18.felt. Yet, why is the Philippines rivaling China as the
:00:19. > :00:21.fastest`growing economy in Asia? Here in Manila, we are talking
:00:22. > :00:50.business. A warm welcome to the programme. The
:00:51. > :00:54.Philippines has seemingly turned a corner and is the fastest`growing
:00:55. > :00:58.economy in South East Asia. It is why big global businesses have
:00:59. > :01:03.gathered in Manila for the world economic forum. Ike came to find out
:01:04. > :01:09.what has caused this dramatic change. `` I have come to find out.
:01:10. > :01:15.A familiar scene on the streets of Manila, and seeking work overseas.
:01:16. > :01:20.Filipinos used to leave in droves, but now, more are staying put. It is
:01:21. > :01:29.hard to find people. People in the Philippines are finding better
:01:30. > :01:35.jobs. Better jobs here? This man is feeling better. The country rivals
:01:36. > :01:38.can't `` China for the title of the fastest`growing economy in the
:01:39. > :01:49.region. Any fracturing syrup, reforms have encouraged companies to
:01:50. > :01:53.sell overseas. The Philippines has not in a successful part of the
:01:54. > :01:58.export machine, but it is changing, and that is boosting growth. There
:01:59. > :02:03.are a lot of challenges that are going to come across, but true to
:02:04. > :02:07.the Filipino spirit, we will face those challenges head on. We are no
:02:08. > :02:10.longer going to just be a country that is sitting on the sidelines.
:02:11. > :02:16.With its young, English`speaking population, the Philippines has had
:02:17. > :02:23.the potential to be a new Tiger economy for some time. Is the cotton
:02:24. > :02:28.growing up? There are more big malls like this one in the Philippines
:02:29. > :02:33.then even in the US or China. With faster economic growth, there is
:02:34. > :02:37.more income for the people in the country to spend. But not everyone
:02:38. > :02:43.is moving up. There are still those who are left behind.
:02:44. > :02:48.In a shanty town literally built on trash, I need slum drillers who
:02:49. > :02:56.collect herbage for a living. `` I meet slum wellies. They called
:02:57. > :03:01.themselves, today traders. It is hardly the typical image of a city
:03:02. > :03:05.trader. A former congressman tells me that the problems are deeply
:03:06. > :03:11.ingrained. It has been a problem in the Philippines for a long time will
:03:12. > :03:16.stop when we read the papers, people always see 7% growth, looks nice,
:03:17. > :03:23.looks good, but in terms of him playmate and in terms of reducing
:03:24. > :03:28.poverty, it is not felt. People are wondering where all the money goes.
:03:29. > :03:32.A quarter of the population lives in poverty. The gap between the rich
:03:33. > :03:38.and poor is the widest in Southeast Asia, so it will be hard for the
:03:39. > :03:42.Philippines to shine in the world's standout region for growth.
:03:43. > :03:53.The turnaround in the economy is you in part two reforms, but much more
:03:54. > :03:56.`` the turnaround in the economy is due in part to reforms, and six
:03:57. > :04:05.months on from the Tyson, there are still those without homes and
:04:06. > :04:09.livelihoods. `` the typhoon. Icon up with the finance minister of the
:04:10. > :04:18.Philippines. `` I caught up with. It is about the comeback of a country.
:04:19. > :04:25.Since the president took office, our group has averaged 6.2%, with 7.2%
:04:26. > :04:30.steer. This year we are projecting between 6.5% and 7.5%. We are
:04:31. > :04:35.building the foundation so that we can sustain this for long periods of
:04:36. > :04:40.time, because that is our goal, to make sure that we give every
:04:41. > :04:43.Filipino opportunity to realise that their potential. What specific
:04:44. > :04:47.policies are you implementing to make sure that growth translates
:04:48. > :04:53.into growth for the people? As you know, the agenda of the president is
:04:54. > :05:01.that her governance as a foundation for a better economy. We need
:05:02. > :05:05.institutionalized infrastructure and investment. Moving from Singapore to
:05:06. > :05:12.hear, you need to be connected by good airports to stop not ``
:05:13. > :05:15.airports. Many airports and ports so they can connect with the global
:05:16. > :05:21.supply chains and make it easy for tourists to come in and out of the
:05:22. > :05:25.country. Open up the economy for investments from other countries so
:05:26. > :05:30.we can make sure that we have not only capital but access to
:05:31. > :05:35.management skills and new talent and technology into the country. We are
:05:36. > :05:40.also addressing certain sectors that have been problematic for us.
:05:41. > :05:47.Education has been an area that has been lagging. 30% of our people are
:05:48. > :05:52.engaged and they only produce 12% of our GDP. The intervention is the
:05:53. > :05:57.same old structural reform more investment on the give them better
:05:58. > :06:03.access to technology and financing, give them more access to the market,
:06:04. > :06:06.because if we are able to improve the productivity in the Philippines,
:06:07. > :06:10.we become more competitive, because food prices will tend to be lower as
:06:11. > :06:19.the demand for higher wages will be less, and that gets you deeper into
:06:20. > :06:27.a productive cycle. I want to talk about increases growth, poverty and
:06:28. > :06:33.inequality. The poverty rate has not come down. It has gone down 3%.
:06:34. > :06:40.That's 3% is over 2.6 million people, about half the population of
:06:41. > :06:44.Singapore. The president says that if there is one person in poverty it
:06:45. > :06:48.is too much, but you cannot remove it overnight, so what are we doing?
:06:49. > :06:52.We have doubled the education budget, more than doubled the health
:06:53. > :07:00.care budget, increased the condition of cash programmes, he being the
:07:01. > :07:08.poorest of the poor, keeping their children in school, starting a
:07:09. > :07:10.programme so that we can have an apprenticeship system said there is
:07:11. > :07:15.a better matching and the skills to produce and the skills needed. All
:07:16. > :07:20.of this is crucial in fighting poverty. Education is the weight
:07:21. > :07:26.equaliser. If we can talk specifically `` the great equaliser.
:07:27. > :07:33.If we can talk physically about the typhoon. I spoke to the people who
:07:34. > :07:37.work displaced and they say they are being relocated from the slums into
:07:38. > :07:44.places that are too far for them to get to their jobs. The area that was
:07:45. > :07:49.affected has been divided into 24 sections, and we ask the private
:07:50. > :07:54.sector in each of those sections to adapt them. 21 so far have been
:07:55. > :08:01.adept at. Why the private sector? The area affected by the typhoon is
:08:02. > :08:06.a port part of the country `` a poor part of the country. Coconuts were
:08:07. > :08:13.destroyed and it takes a long time to get them to be productive, so the
:08:14. > :08:18.key is to get them connected to businesses. Businesses here tend to
:08:19. > :08:23.be controlled by a small number of families. It is cronyism among which
:08:24. > :08:27.has been an issue for this country and other countries. Doesn't that
:08:28. > :08:35.need to be tackled? That can ensure good governance. The best way to
:08:36. > :08:38.share with other people who are not familiar with the Philippines is
:08:39. > :08:46.share the experience of companies who have been in the Philippines for
:08:47. > :08:51.a long, long time. Coca`Cola, Texas Instruments, now we are among the
:08:52. > :08:59.five largest shipbuilding countries in the world will stop mainly
:09:00. > :09:01.because of the people. More and more people are discovering the
:09:02. > :09:07.Philippines because, as you know, economies are about people come a
:09:08. > :09:15.and... Is there a focus on tackling corruption? That is at the heart of
:09:16. > :09:21.the reason for the turnaround. I ask you, how many countries have
:09:22. > :09:27.impeached their chief justice? This is a war against corruption. We want
:09:28. > :09:31.to make sure that this is something that is very clear to our
:09:32. > :09:35.population, because without corruption there should be no
:09:36. > :09:44.poverty and that they go hand in hand, but there are no magic wands,
:09:45. > :09:47.there are no big equalizers in the fight against corruption, but this
:09:48. > :09:55.is going to be a journey and an investment. An investment in
:09:56. > :09:58.institution. We have to have the government translated into a
:09:59. > :10:02.meritocracy. We have launched incentive `based compensation 's and
:10:03. > :10:08.we are using information to help set up her goals and help drive
:10:09. > :10:13.performance. `` proper goals. Businessmen, they do not wait until
:10:14. > :10:17.you get the end result of what you are trying to do, because if they
:10:18. > :10:23.come in late, then they don't get the opportunity of those two come in
:10:24. > :10:27.early, so the important message that is coming out of the Philippines is,
:10:28. > :10:31.we are focused on sustaining this and they should, have a look while
:10:32. > :10:37.it is early so that they can maximise their potential. The
:10:38. > :10:42.economy in the Philippines has been growing quickly over the past couple
:10:43. > :10:46.of years. It is the fastest growth rates in the 1950s, and is set to
:10:47. > :10:50.continue. But how can this be, when the country was struck by
:10:51. > :10:56.devastating typhoon just last winter? Six months ago, the
:10:57. > :11:00.Philippines was struck by one of the worst natural disasters to hit
:11:01. > :11:06.land. The typhoon caused a massive loss of life and had a huge impact
:11:07. > :11:10.on the economy. It is estimated to cut the economic growth of the
:11:11. > :11:17.entire country by a huge one percentage point, let's, the
:11:18. > :11:26.Philippines still had to grow `` is still growing acts 6%, which is the
:11:27. > :11:37.fastest in Asia except for China. Is outcome is due to reconstruction. ``
:11:38. > :11:43.this outcome. So the damage from the Typhoon will be felt, especially
:11:44. > :11:46.towards the front of the year. But with the offset from government and
:11:47. > :11:54.private reconstruction, the economy as a whole will be expected to
:11:55. > :11:58.recover by the end of the year. GDP figures will reassure businesses
:11:59. > :12:03.that the economy will be all right. But for those who have lost their
:12:04. > :12:08.homes and livelihood, rebuilding won't be easy when they don't have
:12:09. > :12:12.private insurance. For them, it doesn't matter what the big headline
:12:13. > :12:18.figures are but rather how quickly that growth can translate into means
:12:19. > :12:24.by which they can reconstruct their lives. What more needs to be done to
:12:25. > :12:41.help people to cook `` help people recover? The bank has offered nearly
:12:42. > :12:47.$1 billion to help. The Philippines is struck by natural disasters more
:12:48. > :12:52.often than other countries are. But a disaster of this scale is a huge
:12:53. > :12:59.challenge for any country. You have to look at it on a national level
:13:00. > :13:03.and a local level. What we have been doing is focusing on trying to help
:13:04. > :13:12.build capacity at local level in supporting the national government.
:13:13. > :13:21.Is it access, roads, having the skills to rebuild, passing along the
:13:22. > :13:27.ability to rebuild a community in terms of jobs? It is a little bit of
:13:28. > :13:32.all of that. In the initial recovery stage, it is looking at clearing out
:13:33. > :13:35.roads and getting access to some of these communities that were
:13:36. > :13:41.devastated by this disaster. But then you move on to getting
:13:42. > :13:53.electricity back into these communities. And then, the biggest
:13:54. > :13:58.challenge is with housing and providing roofs to cover people's
:13:59. > :14:05.heads. Is there something specifically about the Philippines
:14:06. > :14:10.that makes it difficult? People will complain about corruption, the
:14:11. > :14:17.inability to implement the aid which is coming through. These challenges
:14:18. > :14:22.are not unique to the Philippines. They are challenges that many
:14:23. > :14:28.developing countries face, so I don't think the Philippines is
:14:29. > :14:47.unique. It has made a lot of interesting progress respecting
:14:48. > :14:58.transparency. How big a problem is inequality? Inequality is a major
:14:59. > :15:04.challenge for the region as a whole. 80% of the population in Asia
:15:05. > :15:10.lives in countries where a measure of inequality has grown over the
:15:11. > :15:15.last 20 years. This is a problem for the region. We think it could
:15:16. > :15:20.potentially undermine the sustainability of the group we have
:15:21. > :15:25.seen a nation. Any kind of policy that is helping with redistribution
:15:26. > :15:30.and making this growth more inclusive will be more sustainable
:15:31. > :15:42.in the long run. The Philippines has these challenges. This is a big
:15:43. > :15:54.challenge for this country but not unique to the Philippines. Do you
:15:55. > :16:00.find that receptivity to change? This government is very responsive
:16:01. > :16:10.to the notion of change. It has implemented a lot of good policies.
:16:11. > :16:18.It is a challenge in any political democracy, but this is a really
:16:19. > :16:25.committed said of professionals and politicians. You are based is so you
:16:26. > :16:27.have a long`term view of the country and its progress. As the economy
:16:28. > :16:40.turned around in a more sustainable way? Yes. There are still challenges
:16:41. > :16:48.out there. Our forecast for economic growth is around 6.4%. This is a
:16:49. > :16:53.result of a couple of different changes. There has been slow down
:16:54. > :16:59.and investment that is bringing this down a little bit. Deceleration in
:17:00. > :17:08.China affects the region as a whole. But we think the policies put
:17:09. > :17:35.in place, we think this is the great economic team. So no more
:17:36. > :17:41.renovation? I don't think so. San Miguel was founded in 1890 and has
:17:42. > :17:53.grown to become the largest beverage conglomerate in south`east Asia.
:17:54. > :18:04.Six months after this Typhoon, people are still suffering and, in
:18:05. > :18:12.our case, we have finally identified some areas which we can help build
:18:13. > :18:20.some houses for the people there. Our target is to help build 5000
:18:21. > :18:26.houses for the affected victims. Livelihoods are a big part of what
:18:27. > :18:33.were help any country. You have been in the Philippines for a very long
:18:34. > :18:38.time. You are a very big company. What has enabled you to be a big
:18:39. > :18:44.multinational in a country where there are not many multinationals?
:18:45. > :18:55.Our company started diversification five years ago because we know if we
:18:56. > :19:00.will stay on the food and beverage business, growth is minimal, and
:19:01. > :19:08.there is so much opportunity for us to get into infrastructure, telecom,
:19:09. > :19:15.mining. So we did diversify into those businesses. I guess that
:19:16. > :19:18.coincided with a period of rapid growth of the Philippines. What do
:19:19. > :19:34.you see is the role of business in that? So far, we have been quite
:19:35. > :19:37.successful in I diversification. Is there in risk of too much
:19:38. > :19:45.diversification, especially because you are doing it at a time when
:19:46. > :19:48.credit is so cheap? Too much diversification is really dangerous,
:19:49. > :19:55.but in our case, we are very conservative. Our diverse
:19:56. > :19:59.application `` diversification is or is based on our financial
:20:00. > :20:13.capability. We don't over leveraged our company. We are 2.6 times over.
:20:14. > :20:19.A lot of outside investors view the country and don't come into the
:20:20. > :20:24.Philippines very much. It has one of the lowest rates of investment in
:20:25. > :20:28.the region. What are you seeing that they are not seeing? They might be
:20:29. > :20:36.worried about corruption or political instability. Political
:20:37. > :20:46.instability of the Philippines was a problem for many years. But since
:20:47. > :20:51.the President got elected in 2010, he has given a good reputation to
:20:52. > :21:01.our country and his government has been doing a lot and was able to
:21:02. > :21:11.have a credit rating upgrade and sparked a lot of consumer spending.
:21:12. > :21:19.If you see, this country is really good because we have lots of
:21:20. > :21:27.overseas workers and we are also doing a lot. What do you think is
:21:28. > :21:33.different about running a Filipino company versus how you see that
:21:34. > :21:38.company in the West? It is more difficult to run a company in a
:21:39. > :21:42.developing country because they keep changing the rules. Unlike a stable
:21:43. > :21:49.country, they keep changing the rules. Whether it is the view from
:21:50. > :21:58.government, big business or the bank, the Philippines has shed their
:21:59. > :22:04.negative label but the gap is the widest in the region. It is one of
:22:05. > :22:06.the reasons why the slow recovery and why it may be difficult to
:22:07. > :22:38.sustain its recent success. Today was a wet one but at the same
:22:39. > :22:45.time, very changeable. From rain to sunshine back to rain again. We get
:22:46. > :22:49.a bit of everything. It will always feel warm and the sun comes out.
:22:50. > :22:50.This is the satellite