JOHN HAYES ONZM MP for Wairarapa

Pinoys and Kiwis — Getting Closer Together

John Hayes,
Member of the New Zealand Parliament
Chairman of the Foreign Affairs, Defence and Trade Committee

Speech at De La Salle University, Manila
Tuesday 29 June 2010

Good afternoon.  I really appreciate the opportunity to visit one of the Philippines’ top universities, and talk to you about what I think is an increasingly important relationship both for New Zealand and the Philippines.

Its great to be back in Manila in this warm, vibrant and colourful city. I’ve just stepped off the plane from the midst of New Zealand’s winter and driven straight into the city to be here. 

The main reason for my visit is tomorrow’s inauguration of President-elect Aquino and Vice-President-designate Binay.

But while I’m here, I hope to get a feeling for what’s going on in the Philippines, and also to see how the New Zealand – Philippines partnership is developing.

Our two countries are becoming more intertwined.  Today I want to talk about that relationship and where I think it is going.

People-to-people

People-to-people links are growing rapidly and nearly 40,000 of your compatriots live in my country.  The Philippines is a very important trading partner with New Zealand.  And as a frontline member of ASEAN, the Philippines is an important partner as New Zealand increasingly integrates with the wider Asian region.

I’d like to look at these different aspects of the relationship in turn.

To be honest, New Zealanders don’t know very much about the Philippines.  Kiwis do like to travel, but the Philippines doesn’t really feature on the list of places that most of us go to.  And ten years ago, probably very few of us had ever met a Pino unless like me they’d had the good fortune to visit your country.

But New Zealanders’ understanding of Filipinos, and Pinoys’ understanding of Kiwis, is starting to grow.

How is this happening?  Because Filipinos are now part of our society, and are starting to make their mark in New Zealand.

New Zealand and the Philippines have about the same land area, but New Zealand has only about 4 million people.

And in New Zealand we don’t have enough skilled labour in sectors such as healthcare, engineering and dairy production.  We look to the rest of the world to provide people with the necessary skills to fill those gaps.

As a result, New Zealand has quite a liberal immigration policy — we need people will certain skills, so we’re not going to make it overly difficult for them to get in.

A large number of Filipinos have recognised that.  They’ve realised that a great opportunity is available in New Zealand, and they’ve taken advantage of it

The figures are quite remarkable.  The Philippines is now New Zealand’s fourth-most important source of skilled migrants, and sixth-most important source of residents.

That’s a huge change from even a few years ago.  And by some estimates Filipinos make up close to 1% of New Zealand’s population — about 40,000 in all.

Filipinos are going to New Zealand, not as OFWs to work in a menial job for a few years before returning home.  We take very few low-skilled workers.  No, the Filipinos going to New Zealand are skilled migrants, and are ending up in a range of professions.

A lot of those Filipinos living in New Zealand are working in the healthcare sector or in manufacturing.  Many more are working on New Zealand’s dairy farms, making dairy products that often get exported back to the Philippines.

They have a good reputation as hard-working and loyal employees, and as positive and law-abiding members of the community.  While a lot of those Filipinos live in New Zealand’s two biggest cities, Auckland and Christchurch, Philippine communities are also starting to spring up in smaller towns.

Especially in rural New Zealand, Filipinos are developing an excellent reputation as hard workers with a great sense of loyalty.  Some farmers are even saying they’d rather hire a Filipino than a New Zealander!

I know the Philippines takes great care of its outward migrants, so I want to emphasise how well Filipinos are looked after in New Zealand.  Sure there are some cultural challenges for Pinoys in New Zealand — such as calling your boss by his or her first name, or hearing swear words at work.  The country is a lot colder than the Philippines, a lot colder, and rural areas are often quite remote and thinly populated.

But Filipinos in New Zealand are well looked after.  We have very stringent labour laws, and these apply to all workers in New Zealand, regardless of where they’ve come from.  So those Filipinos who are working in New Zealand must get treated with the same respect and on the same minimum conditions as their kiwi counterparts.

For example, the minimum wage in New Zealand is around 400 pesos per hour, and it’s the same for everyone.  By law, no worker in New Zealand can be paid less than that.

So we have a lot of Filipinos already working in New Zealand, and their numbers will continue to grow.  For instance, our government recently set up what’s called the Silver Fern job search stream, to fast-track young skilled migrants into New Zealand.  Of the 300 places in this new category worldwide, 10% were Filipinos.  This shows that Filipinos are interested in our country, and have the sort of education levels and work experience that we’re looking for.

But it’s not all about work.  One of the things I’m excited about is the prospect of a working holiday scheme between New Zealand and the Philippines.  We have more than 30 of these schemes around the world, but this will be a first for the Philippines.

Reciprocal working holiday schemes allow young people, from 18 to 30, to vacation in the other country for up to a year, and take on casual work to support that extended holiday.

Working holiday scheme are great for building links for the next generation.  Working holidaymakers leave with a much deeper impression of the country than you can get from a short visit, and often maintain ongoing business or personal links with the other country.

New Zealand and the Philippines have already agreed to negotiate a working holiday scheme, and I hope the new administration will respond to New Zealand’s written proposal soon.

Tourism

So far there isn’t much tourist trade between the Philippines and New Zealand: between 8,000 and 10,000 in each direction per year.
I think that’s a pity, given the good holiday experiences each country has to offer.

There are plenty of good air links to New Zealand, but so far none of them are direct.  That’s a mental block for some people, though I don’t think it needs to be.  Still I think we need to pursue a direct air connection as soon as practicable so as to facilitate the movement of people and perishable goods.

I’m sure that the number of Filipinos in New Zealand, and the quality of their experience there, is already starting to have a snowball effect on the numbers of visitors and students coming from the Philippines to New Zealand.

This happens because Filipinos are learning more about New Zealand and New Zealanders, they’re sometimes marrying New Zealanders, and of course their relatives go to New Zealand to visit from time to time.

We have a new air services agreement that allows direct flights to begin, and I’m sure that in time commercial interest will result in direct services.

Trade

The Philippines is one of New Zealand’s top 20 goods export markets, typically fluctuating from 12th to 14th as markets change.  It’s currently at number 14, and two-way trade was around 30 billion pesos last year.

If you go into any supermarket in the Philippines and look at the milk products on the shelves, you’ll find out what’s behind this trade.

New Zealand exports a lot more to the Philippines than the level of trade in the other direction, and our exports are dominated by dairy products.  Believe it or not, just a couple of years ago this country was New Zealand’s second-biggest dairy market.  In the world.  More recently it has been eclipsed by China and Japan, but is still in fourth place.

New Zealand is probably the world’s most efficient producer of dairy products.  And we’re definitely the biggest exporter of them.  The Wairarapa, which is the district that I represent in parliament, is where quite a lot of those dairy products come from.

The Philippines, on the other hand, doesn’t have a lot of dairy cows.  I understand this country produces only a very tiny proportion of what it consumes.

We know that eating dairy products is healthy.  For example, milk, cheese and yoghurt are a major source of calcium, and also provide other nutrients that are important for growth and development.

Experts tell us that adults should eat two or three servings of dairy products every day, and children should drink between 2 and 4 glasses of milk every day, to get enough calcium for their growing bones.

There is simply no way that the existing dairy production in the Philippines can meet those needs.  Buying product from New Zealand fills that very important nutritional gap.

What about trade in the other direction?  You send us fruit, especially bananas, and light manufactured items such as electronic products and components.

I hope this trade will grow, in both directions, and become more diversified.

Many of you will know that at the beginning of this year a new free trade agreement came into effect between the Philippines and New Zealand.  This will cut tariffs over the next few years.  At the end of the phase-out period all Philippine exports will enter New Zealand tariff-free, and virtually all New Zealand exports to the Philippines will be treated the same way.

The tariff cuts that have already occurred are making it easier for New Zealand exporters to sell products to the Philippines — like the milk you see on supermarket shelves.

And it’s also easier for Filipinos to sell products to New Zealanders — like the car batteries that are made here and sent down there.

But this free trade agreement isn’t just a bilateral deal.  It has the unwieldy title of AANZFTA, which stands for the ASEAN Australia New Zealand Free Trade Agreement.

This is a ground-breaking free trade agreement for the ASEAN region, the first time it has negotiated a modern, comprehensive FTA that covers goods, services, and investment.  It also covers ‘behind the border’ issues such as competition policy and intellectual property.

The FTA means that products made in the Philippines have an advantage over products made in places that New Zealand doesn’t have a similar agreement with — that includes direct competitors like Japan and, for the moment, Indonesia, which hasn’t yet brought AANZFTA into force.  Products from those countries don’t get the same preferential treatment as products that are made in the Philippines.

Why was New Zealand interested in negotiating this deal?  Put simply, ASEAN, and the Philippines as a major part of that grouping, is now a major player in the world economy.  It is a market of nearly 600 million people and it’s an increasingly important destination for New Zealand’s exports.

Indeed, ASEAN as a whole is now New Zealand’s third-largest goods export market, with around 120 billion pesos worth of New Zealand goods being sent here in 2009.

It’s almost impossible to pick up a business publication these days without reading about how East Asia, and ASEAN as part of that broader region, will be the powerhouse of global economic growth in the 21st century.  This is another reason that New Zealand was interested in negotiating this agreement, and why we’re looking at other agreements in the region such as a potential ASEAN-plus-6 FTA and the Trans-Pacific Partnership.  I know the Philippines is looking at further trade liberalisation too.

AANZFTA represents an important building block in the growing East Asian trade and economic architecture — something that we’re very keen to be involved in, and even to be at the forefront of.  We consider ourselves to be increasingly part of this region.

AANZFTA was the first FTA to be signed, and the first one to come into force, since the onset of the global financial and economic crisis in late 2008.  The fact that our countries signed and implemented this deal in the context of that crisis show that we were sticking to our guns.

We stuck to the theory of trade liberalisation, which all the lessons of history showed us was the only way, even as others were tempted into taking short-sighted protectionist measures for purely political reasons.

As well as the direct business benefits of the agreement, there’s also the ‘head-turning’ effect — where exporters become more aware of the possibility of entering different markets due to the publicity around FTAs.

I’ve been impressed by the way the Philippines has really embraced AANZFTA.  The Department of Trade and Industry has worked very closely with our embassy, and been very active in promoting the agreement and associated export opportunities.

Businesses are aware of the new agreement thanks to the extensive outreach programme led by DTI, and they’re keen to take advantage of it.

Labour and environment

When our two countries were negotiating this free trade agreement, the AANZFTA, New Zealand and the Philippines also signed two cooperation agreements on labour and environment.

These are legally-binding agreements.  They contain commitments that the two countries won’t use labour or environmental standards as a cover for protectionist actions.  They contain commitments to not let increased trade compromise either country’s standards on labour or environmental protection.

These agreements will also lead to meaningful joint operations by the relevant government departments in each country.  These cooperative activities are just being planned at this stage, but I expect they will bring mutual benefits to both countries.

Dairy cooperation

As we were negotiating AANZFTA, New Zealand and the Philippines were also talking about dairy cooperation. 

New Zealand is recognised as a global leader in dairy farming.  If there is one thing we know how to do best, it’s how to make high-quality dairy products in an efficient way.

I mentioned earlier that the Philippines currently produces only a tiny proportion of its dairy requirements.  So we’ve agreed to provide some assistance to the Philippines, to expand and develop the fledgling Philippine dairy industry over the next few years.

The New Zealand government has been working with the Philippine National Dairy Administration to come up with a plan for how this cooperation can best be tackled.

We’re going to start with a study into the best ways of doing dairy farming in the Philippines.  Obviously some things here are different from New Zealand, like the climate for starters.

The study will also look at what has failed in the past, and why.  I know that New Zealand has invested into model dairy farms in the Philippines in the past, but from what I understand most of them weren’t sustained.  We need to know why.

Once all that work has been done, we’ll have a think about kinds of support could be provided to build up the Philippine dairy industry.

Law enforcement cooperation

As you can see, the free trade agreement called AANZFTA has brought New Zealand and the Philippines closer together across a wide range of areas.

But our relationship isn’t just about Filipinos buying New Zealand milk.  The relationship was broader than that even before this particular agreement was signed.

One example is the fact that the New Zealand Police have been contributing to public safety and stability in the Philippines, by providing training for their Philippine counterparts.  Our countries have had an agreement on law enforcement cooperation since 2007.

Right now, there are two kiwi police officers on Dinagat Island in the south of the country providing some basic training for the local police force there.  It’s a remote place, but our ambassador was down there last week, and he tells me that the training is going really well.

This is all part of a model police station project that New Zealand is contributing too — helping the Philippine National Police to improve its ability to deliver community policing services.

Next week, those two New Zealanders will be providing similar training in Luzon.

We’ve done quite a lot of police cooperation in the Philippines.  Last year, New Zealanders provided training for the PNP, the drug enforcement agency and the National Bureau of Investigation, on how to safely find and destroy drug laboratories

I’m confident that this cooperation will continue.  From New Zealand’s point of view, we can see that a having a well-trained law enforcement community in the Philippines is an important factor in ensuring stability in this country, and in the region.

Stability helps the Philippine population, but is also an important factor in business confidence and prosperity.  Remember, we consider ourselves to be part of the Southeast Asian region, so we have a clear interest in its stability and its prosperity.

Official development assistance

New Zealand also gives aid, or official development assistance, to the Philippines.  Our programme in the Philippines is small, but we are able to help is some niche areas.  We contribute to peace and development in Mindanao, by joining with other countries in funding the United Nations Development Programme’s “ACT for Peace” project.

I know from our embassy’s reports that ACT for Peace helps put infrastructure into conflict-affected villages, and helps rebuild shattered communities by inculcating peace principles in the school curriculum.

We also contribute to programmes that reduce infant and maternal mortality in Mountain Province, and other programmes that help communities of indigenous people to secure land title so they’re better able to develop economic activities.

New Zealand is also working to develop a province-wide coastal resource management system in place in Camiguin, so that local people can develop businesses that are sustainable environmentally as well as economically.

The New Zealand Aid Programme is focussed on the Pacific, our own back yard and an area with its own economic and development challenges.  But we do extend assistance to other areas, including the Philippines, and in a small way we are able to make a difference to lives here.

Human rights

Another area where we are involved with the Philippines is in human rights cooperation.  This is a politically tricky area, but it’s one where New Zealanders have very strong views, and it’s not one we’re going to shy away from.

The New Zealand Human Rights Commission has been working with the Human Rights Commission of the Philippines for the last two years.  This formal cooperation programme has two aims.

One is to develop the ability of the Commission on Human Rights of the Philippines to deal with human rights violations.

The second is to increase awareness and protection of human rights in three separate groups of indigenous people — one each in Luzon, the Visayas and Mindanao.

The New Zealand embassy here in Manila has also been a keen supporter of the new Kasama programme.  This initiative brought together several donors, including New Zealand, and they encouraged civil society to come up with innovative human rights projects.

As a result of that, New Zealand has funded a group called the Humanitarian Legal Assistance Fund, which is helping to clear congested prisons in Manila.

The visit

Unfortunately my visit to the Philippines will be for only for a few days.  But while I’m here I will be trying to see as much as I can of what New Zealand is doing in the Philippines, and what things are going on here that are of interest to my country.

For instance I’ll be visiting a business process outsourcing centre, where Filipino workers are serving clients based in New Zealand.

I’ll be taking a look at some dairy products that have been imported in bulk from New Zealand, and are being packaged in Manila ready for the supermarket shelf.

I’ll also be visiting a Philippine dairy farm.  I’m sure it will be different from what I’m used to seeing in my district at home — there will be more coconut trees for starters.

But above all I’ll be attending the inauguration of the new Philippine president — Noynoy Aquino — and vice-president Jejomar Binay.

We in New Zealand watched the May elections with great interest, and our embassy had staff in different parts of the country observing the day’s activities.

The embassy reported that the process of casting and counting votes was overwhelmingly successful.  I really congratulate the Philippines for this fantastic achievement.

To go from a fully manual voting, counting and tallying system — to a fully automated system — in one fell swoop, is a truly impressive achievement.  I take my hat off to the Commission on Elections for their great work.

But above all I salute the volunteers, particularly the PPCRV and other poll-watchers.  And especially I recognise the efforts of the people of the Philippines, who I understand in many cases queued for hours in scorching temperatures to exercise their democratic right.

The highly successful May elections were a huge boost to democracy in this country.

It’s important to us in New Zealand that democracy is flourishing in the Philippines, which is an increasingly important partner for us.

Conclusion

As I said at the outset, the Philippines is increasingly important to New Zealand.  In the past we’ve had a friendly but not very close relationship.  The ‘close’ dimension of the relationship is changing fast.

So many Filipinos are choosing to make their homes in New Zealand, and in time will become Pinoy Kiwis.  I understand that a new word has been coined for them — Piwis.

These people-to-people links will have spin-offs in all sorts of directions, increasing tourism volumes, strengthening business links, and building a better understanding and dialogue between the two countries at a political level.

A working holiday scheme would really help to cement those bonds, for generations to come.

The Philippines is a very important trading partner with New Zealand.  I hope that as the AANZFTA free trade agreement beds in, the volume of trade will grow in both directions, and that the trade will become more diversified.

And as a frontline member of ASEAN, the Philippines is an important partner as New Zealand increasingly integrates with the wider Asian region.

This is a relationship that is growing, become stronger, and becoming more diverse.  Pinoys and Kiwis — getting closer together.

Thank you