You have been named Ambassador to Spain. The common history that unites the Philippines with Spain is very rich, having lasted for more than 300 years. However, today the Spanish heritage in the Philippines seems more of the past than of the present. How do you plan to increase ties between Spain and the Philippines? What will be your priorities in your new role?

As Ambassador of the Phillippines, my priorities will be the following:

· To protect the welfare and interests of the Filipino workers in Spain who number around 40.000.

· To work for Spanish investments to the Philippines and increase trade relations by offering new investment opportunities.

· To promote further the cultural exchanges and strengthen the historical ties that link us to Spain. Also, to awaken an interest in the Philippines here in Spain, perhaps as a tourist destination.

In so doing, I will also encourage the exchange of high level visits between dignitaries of both the Philippines and Spain in order to further strengthen our diplomatic, cultural and economic interaction.

The recent political events with former President Estrada gave the image of a country still sensible to political upheavals. How would you qualify the Philippines' current political transition and do you consider it to be stabilizing itself under the current Goverrnment?

The Government has stabilized under the leadership of President Gloria Macapagal-Arroyo. Proof is she has made measurable targets and is focused towards the goals that her administration will achieve during her tenure. She does not make motherhood statements, instead she clearly defines the government's objectives in specific terms, thereby clearly demonstrating the achievements of her goverrnment even at this early stage. To mention a few, economic growth created more than 2 million jobs last year. Agriculture is being modernized. Housing for the poor is being addressed and school buildings are being constructed in all towns. Not only is her government stable, it also has a definite direction. It is this very direction that is keeping the government and the economy stable and efficient.

The Philippines seemed to have passed through a transition similar to the one that your country lived during the end of the Marcos regime whereby the popular demonstrations in the streets toppled that Government. However, in this "People Power 2", as it was termed, there were also important demonstrations in favor of Estrada. Does this show a fragility as to the possible support for the current Government?

We have to accept this statement and, as you well know, there was a large demonstration to this effect. But this initial support for Estrada is steadily being eroded by the achievements of the Macapagal-Arroyo administration. Proof is there are less and almost negligible "rallies", if you can call them that. We do not see any threat in the foreseeable future. The greatest stabilizing factor is the improvement of the economy. We registered a 3.4-3.7% growth during the first year of her presidency. We expect it to hit 4 to 5% this year. Inflation was contained at 6.1% last year. People see a genuine and earnest desire on her part not only to improve the economy but also to help eradicate poverty in the near future.

What will be the fate of Mr. Estrada? Some people are pointing towards an exile...

From what I have actually seen and heard, as well as read , the national pulse of the people is that the former president should be tried in court and that justice should be served. The Government's position is to leave the matter to the courts of law. The courts should decide on the merits of the case.

The Philippines again came to the forefront of the international political scene due to the Muslim fundamentalism affecting the country. What real threat does this pose to the country and how are the authorities coping with this issue?

First, this must be explained as an isolated case. Basilan and Jolo in Mindanao, where the rebels are active, are about 1,000 kilometers away from Manila. Abu Sayyaf, one of the main fundamentalist groups, are not the idealists that they wish to portray themselves as and they have lost credibility and following among the Muslim population. It is taking time to settle this problem and we have accepted the help of the Americans, in so far as training and providing us with high tech equipment is concerned, in order to improve our capability to deal with the situation and to eradicate terrorism.

Are there any threats of spill-over effects into other regions of the Philippines and as such, into other parts of South East Asia?

The spill-over, I think, is minimal. However, there are organizations against the present government that have used this incident to criticize the government and to emphasize all that is negative in the country. There was also a lot of media hype concerning the help that the American troops were extending. We are not immune to the media hype. In similar fashion, even in the summit in Barcelona, there were 350,000 people marching in the streets against globalization . I guess this is a sign of democracy in action. Even if there are a handful that take to the streets back home, they have no political power and cannot damage the government.

Elections will be held in 2004 and there has been a debate as to whether President Macapagal-Arroyo could run for the Presidency due to her current tenure serving as President now. Has this issue been resolved?

Our constitutions states that we have elections this coming 2004. We have elections every 3 years and the tenure of office is 3 years for local government officials and congressmen and 6 years for 12 senators. Our Constitution states that a President elect has a six year tem, but since President Macapagal-Arroyo has only assumed the remaining three years of the deposed President's term, she is eligible to run for the Presidency in 2004.

The Central Bank of the Philippines recently published a survey known as the Business Expectation Survey whereby the general sentiment of businessmen was that the economic environment was improving. Do you agree?

I would agree particularly because of the signs that we are already seeing, namely:

1. The stock market is on an upward trend since January and investments are slowly coming in again. The business world is looking at the opportunities in the Philippines once more. With the results of our economic performance last year this has made the Philippines an attractive destination again.
2. The inflation rate is at a low 6%.
3. Interest rates are low, attracting foreign as well as local investments.
4. Capital expenditures are beginning to increase.

How would you qualify the level of Spanish investments in the Philippines.

With regards to Spain, investments are quite low compared to what Spanish companies have invested in other regions, particularly South America. As you well know, Spain's investments in the Ibero-American countries are quite large. Presently however, the trade figures with the Philippines are quite small. We have a total of about US$180 Million worth of incoming and outgoing business between Spain and the Philippines. $100 million of these are imports from Spain $80 Million are exports so we have a favourable balance of $20 Million. These figures are low in comparison with other financial figures but it nonetheless shows that there is a lost of room for improvement and it also shows the need to look into Asia and the Pacific. Having said this, there are important Spanish investments in the Philippines such as Unión Fenosa, Banco Santander, the Barceló Group, Mapfre, etc… The South American countries were a very natural market for the Spanish investors obviously due to a a common language and historic-cultural ties. But after the crisis in Argentina, I think that they have realized the need to diversify their investments. Although this is easy to say on hindsight, it is always safer to spread their risks.

What are the main sectors that are currently offering interesting investment opportunties?

In the IT related services such as call centers, animation and programming, IT component manufacturers for Software and Hardware are accounting for up to 50% of our exports now. Texas Instruments is heavily investing in the Philippines. Acer and Intel have manufacturing plants in the Philippines too. The call centers are coming to the fore because they have realized our advantage of a higher level of an educated workforce who can speak English and are skilled. Construction related engineering and design work and medical transcription are fast expanding.

How would you qualify the current level of IT preparedness by the Filipino companies?

What I can tell you is that there is a very conscious effort to upgrade all the ingredients needed to have a successful IT industry. The infrastructure is being developed, there are more and more schools offering IT graduate courses and enrolment by students in IT related courses have increased tremendously. We have also seen a very high increase in short term IT courses because the Filipinos have realized that this is one of the main and quick sources of employment nowadays.

How about long term investments?

It is improving because of the increasing transparency in government projects and we are now implementing electronic systems in the bidding of tenders, for example. This has helped to show the world that we mean business. The country is welcoming long term investments in infrastructure. We have the Build Operate and Transfer project with varying schemes to attract foreigners, and in this way, the limited capital we have can be put into short-term investments. The capital is brought in by the investors to invest in infrastructure such as road projects, railroads, port facilities, transportation, etc…

Are there strategic sectors currently under privatization?

Noteworthy is also the fact that the NAPOCOR (National Power Corporation) is on the process of being privatized and it is only a matter of time. From what I have gathered, the transmission lines will already be privatized. The laws already exist and they have been passed during this short tenure of Gloria Macapagal-Arroyo. These are signs that we are cooperating with foreign investors and that we only want transparency with foreign investors. There is the railway system, which is not developed and we are trying to push for this. This is a promising transportation system.

How about the telecoms? Is it fully privatized?

Telecoms has been fully privatized and the biggest operator is PLDT but we also have Globe and other players in the sector which have improved the telecommunications industry in the Philippines. What is amazing is the growth of cell phones and we are now in a stage where we have more cell phones than land lines in the country.

How do you contemplate your country's role in the region during the next phase of economic improvement?

We are a country in transition, we have a new leader and we have officials who are competent, hard working and intent on making the Philippines grow economically as a nation. We are conscious of the fact that we want to help the less privileged and we have social concerns. Everyone is keen on fulfilling the objectives of the present administration. The Philippines should be considered as a place where investments, both short and long term, should get a higher percentage of return compared to investments in other industrialized countries because we are still in the process of industrializing and this should attract bigger companies for the possibility of bigger returns. We are aware of the fact that money goes where it gets a bigger than usual return, we have realized this in the Philippines and we have passed the necessary legislation in order to safeguard foreign investments and assure investors that the Philippines is a safe investment destination. With President Gloria Macapagal-Arroyo, we as a nation are moving forward. Our vehicle, as they say, is in good running condition, and most importantly, we have a very competent driver behind the steering wheel.

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