Macapagal woos Silicon Valley

Date: Wednesday, October 30, 2002 11:13 AM

H-1B and JOB DESTRUCTION NEWSLETTER

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It seems that Bush's trip to Mexico has started a new stampede - out of the
United States.

http://www.inq7.net/nat/2002/oct/30/text/nat_2-1-p.htm

Macapagal woos
Silicon Valley execs
Posted:11:48 PM (Manila Time) | Oct. 29, 2002
Inquirer News Service

SAN JOSE, California (VIA PLDT) -- President Macapagal-Arroyo on Tuesday
flew to California to encourage business leaders in the world’s information
technology capital to invest in the Philippines.

She said she was following up a terrorism-dominated Asia-Pacific Economic
Cooperation leaders’ summit in Mexico with a business trip to Silicon Valley
because she believed that "the best antidote to terrorism and poverty is
political freedom and economic opportunity."

"In this interconnected world, opening a door in Silicon Valley can open
opportunity for job creation in the Philippines," she said.

She touted the Philippines’ rich pool of competent scientists, engineers,
information technology workers, communication technologists and senior
managers.

On Tuesday she met with top executives of Silicon Valley firms which are
already key investors in the Philippines to thank them and to encourage them
to invest more.

She followed a roundtable discussion with CEOs of the Top 200 Bay Area
companies with one-on-one meetings with the heads of the firms with
investment projects in the Philippines, such as Intel whose plant Ms
Macapagal was to tour later that day.

"Intel has already invested 1 billion dollars and employs over 6,200
Filipino workers. That is my idea of a good anti-terrorism plan," the
President said.

The United States is the Philippines’ No. 1 trading partner and is a major
source of both direct and portfolio investments.

Trade between California and the Philippines exceeds 12 billion dollars a
year with the Philippines supplying the California high-tech industry with
silicon chips, semi-conductor devices, circuit boards and other electronic
and high-tech components.

Intel’s 1-billion-dollar investment has been primarily in ATM (assembly,
test and manufacturing) facilities that produce high-speed computer
processors such as the Pentium III, Pentium IV and Celeron processors, as
well as chipsets and flash memory used in mobile phone handsets.

Intel’s Philippine unit was the major source of Pentium products in 2001.

Though she had been in San Jose only a few hours, Ms Macapagal was able to
report afterward at least one major investment pledge -- a plan by the
Cypress Semiconductor Corp. to put up a silicon wafer fabrication plant in
the Philippines.

The President said this represented a deepening of the country’s electronics
industry.

"This is really a move forward. We are now going into the more basic
materials. I should say backward because it is actually backward
integration, but forward for our economy," she said.

"I do not know how much (the investment would be), but it is really big
capital. A wafer fabrication unit is very capital-intensive. One company has
only one or two of those," she added.

Cypress, a company that specializes in high-volume manufacturing of silicon
cells at very low cost, is a major partner of Sunpower, a premier
manufacturer of ultra high-efficiency silicon solar cells. Solar power and
other renewable sources of energy have become more significant because of
the political volatility in the traditional sources of oil.

Other major Silicon Valley investors in the Philippines include PeopleSoft,
Cisco, HP-Compaq, Oracle, Sun Microsystems, Sybase and Agilent Technologies.

Among the officials that the President met here Tuesday were those from
Sunpower Corp., Solitron Global Services, the ICT Group, Unical Corp., and
Chevron Texaco whose Philippine subsidiary, Caltex, is the third largest oil
firm in the country.

She told the business executives that they had the full support of the
Philippine government and outlined a list of policies and initiatives
addressing security, foreign investment, economic development, education and
training designed to make doing business in the Philippines easier for them.

"My administration is determined to provide good business conditions for
investment by maintaining the bedrock of any country’s competitiveness: an
adherence to a long-term vision, which is victory against poverty within the
decade; predictable and stable rules of the game; and most of all, rules and
policies that are reform-oriented," she said.

The President said that among the concerns expressed by the Silicon Valley
investors was the Philippines’ limited number of engineers with advanced
degrees.

"They said we should develop a masteral and doctoral degree program in
engineering. Precisely because they want to go up higher in the value chain
(in their new investments), the more specialized will be their need (for
human resources)," she said.

Another concern raised was the cost of capital. She explained that interest
rates in the Philippines were now lower than they have ever been in the past
15 years.

"And the cost of capital will probably even go down some more when the asset
management companies start to take away the non-performing loans from the
banking system," she said.

In a speech before the Commonwealth Club of California, the President
presented her views on US-Philippine relations, the fight against terrorism
and the importance of economic reform in the Philippines to attract more
jobs and investments.

The Commonwealth Club of California is the most prestigious organization of
business and civic leaders in the Bay Area. It is a most sought after forum
by public personages whenever they are in the Silicon Valley area.

It most recently hosted the contending factions of the Iraq debate. Democrat
Party leader Al Gore used the forum to criticize President Bush's Iraq
policies, the first Democratic leader to do so. Vice President Dick Cheney
also used the forum to explain the Bush administration's Iraq policy.

The club’s Silicon Valley chapter hosted Ms Macapagal’s luncheon address.

The renewed threat to global security had renewed and transformed the
historic relationship between the United States and the Philippines, the
President said.

"The challenge for US policymakers is to help Southeast Asian nations like
the Philippines achieve their goals, while also securing the interests of
the United States," she said.

She noted how the Apec meetings in Los Gatos, Mexico, last weekend had
underscored a significant new trend among nations and leaders-the
recognition that global terrorism must be fought hand in hand with the fight
against poverty.
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