Address to the Stratbase Albert del Rosario Institute

Ambassadordel Rosario, thank you for your very kind words. Secretary Andanar, dignitaries, excellencies,ladies and gentlemen.

I amabsolutely delighted to be addressing an institute which bears the name of mydear friend, Albert del Rosario.

Albert wasthe Secretary of Foreign Affairs from 2011 to 2016 and before that, theAmbassador to the United States from 2001 to 2006.

I valued hisadvice and his wisdom during our many discussions.

During histenure as Secretary, he had a clear-sighted and strategic appreciation of hiscountry's interests and pursued these relentlessly and with determination.

TheStratbase Albert del Rosario Institute aims to elevate the level of publicdiscussion of strategic and economic affairs, much like what Albert achievedduring his tenure as Secretary. In atime of strategic uncertainty and rapid economic change, this institute canonly benefit the Filipino policy community and serve as an important resourcefor future governments, steering the Philippines through challengingtimes.

ThePhilippines and Australia are two successful democracies with vibranteconomies. We have both benefitedenormously from the international rules-based order. This order has brought greater prosperity toour region and supported the development of our communities and societies.

Inparticular, the Philippines has come far since the dark days of World War IIwhen an estimated 80 percent of the economy was destroyed amid the humancarnage. That is testament to theresilient and remarkable people of the Philippines.

The broaderregional story is also inspiring. TheIndo-Pacific began the post-war period as one of the poorest regions in theworld.

By 1960,East Asia accounted for a mere 14 percent of global GDP. After decades of strong economic growth, itis now predicted that East Asia will produce about one-third of global GDP by2030.

By 2050,more than half of all global GDP is forecast to come from our immediateregion.

Should thisforecast prove accurate, more than 50 percent of the world's middle class willlive in our region by 2050. This holds huge potential for our two nations.

Australia isentering its 26th consecutive year of economic growth. This has allowed us to become 13thlargest economy in the world even though we are only the 53rd mostpopulous nation in the world.

ThePhilippines has also enjoyed strong growth in real terms, which has exceeded 6percent per annum over the past 6 years. The most rapid in South East Asia.

Theperformance of our economies is an example of the opportunities that arise whenthe region is peaceful and stable as it has been in relative terms for severaldecades. However, success also bringschallenges, as many countries continue to grow in economic and militarystrength in our region.

The threelargest economies in the world are all Indo-Pacific great powers; the UnitesStates, China, and Japan. Together thesethree powers make up around four-fifths of the combined GDP of the Indo-Pacificregion.

As Indiacontinues to grow, we are seeing the emergence of a fourth regional economicgiant. India and China dominate theregion demographically with around 60 percent of the region's population.

Militaryspending is growing faster throughout the Indo-Pacific than anywhere else inthe world. For example, China's budgetaccounts for almost two-thirds of all military spending in East Asia and isalmost five and a half times more than the current combined military outlays ofSouth East Asia.

Incomparison, the United States currently spends 2.75 times more on its militarythan China.

China'sdefence budget is more than 8 times larger than Australia's and about 55 timeslarger than that of the Philippines.

India spendsmore than twice as much as Australia and about 18 times more than thePhilippines.

So, forAustralia and the Philippines, our challenge is to work constructively andcooperatively with one another and also engage constructively and cooperativelywith the larger powers.

The best wayfor all concerned is within the international rules-based order established inthe decades since the Second World War.

This ordercame into being in response to the "might is right" doctrine of bygone erasthat gave free reign to great powers and contributed to untold humanmisery.

Therules-based order is one in which says a country with a population of less thanhalf a million people such as Brunei should have the same rights and privilegesas the United States, China, Japan, and India for example.

The orderprovides a framework within which disagreements can be resolved peacefully andaccording to rules and mechanisms that had been agreed upon and fair and areobjective.

Thisincludes the role of treaties, of international courts, and the role ofindependent arbitrators who can peacefully resolve international disputes as ameans of avoiding escalating tensions.

We encourageother nations to also embrace this order as a fair means of resolvingdisputes.

Importantly,the world's greatest military power is a key supporter and defender of thatorder even when it constrains its own power.

Australiasupports United States' leadership to preserve that order and safeguardinternational peace. That peace is theessential precondition for economic prosperity for us all.

Australia'sforeign policy is not limited to or exclusively dependent upon our strongrelationship with the United States.

We arecommitted to a strong Australian Defence Force to defend our own securityinterests.

As set outin our 2016 Defence White Paper, we will be spending approximately $195 billionover the next decade on improving our military and intelligencecapabilities. This includes an almost$90 billion naval ship-building program of 12 new submarines tailored to ourneeds and unique conditions.

Australia'sexperience is that new friends need not come at the expense of existing alliesand longstanding partners.

Our alliancewith the United States is perfectly compatible with forging even closerrelationships with regional countries in ways that are in Australia's nationalinterests.

Our morerecent and deepening security relationships with Japan, the Republic of Korea,Indonesia, India and Singapore contribute to regional stability and strengthenthe rules-based order, as does our close and long relationship with thePhilippines.

At the sametime, we have a comprehensive strategic partnership with China that builds onour free trade agreement, thus elevating our relationship to a level ofcooperation that reflects the depth of our wide ranging common interests andChina's increasing role in the region more generally. Our strong bilateral relationships continueto be complementary to our multilateral engagement.

Australiabecame ASEAN's first dialogue partner in 1974, and upgraded our relationship tostrategic partner 40 years later. Wewill be taking the relationship further in 2018 when our Prime Minister MalcolmTurnbull will welcome all 10 leaders to Australia for an Australia-ASEANspecial summit.

It isimportant to note that ASEAN is an institution celebrating its 50thyear in 2017 and that it was established to preserve peace and stability in theregion. This remains its most importantmission.

To that end,ASEAN should never underestimate the moral force it can exert in the form ofcollective diplomatic pressure on countries that might think or behave againstthat mission.

An area witha combined GDP of US 2.5 trillion dollars, ASEAN has an opportunity to exercisefar greater influence than its members could do so individually. This presents member states with asignificant degree of leverage.

A groupingsuch as ASEAN has much greater influence when member states speak firmly withone voice in defence of international law and order. Ten voices are more compelling than one.

There isalso a great value in ASEAN-backed institutions such as East Asia Summitbecause they present unique opportunities for the Indo-Pacific to reaffirm theimportance of international law. We aredelighted that the Philippines has assumed the chair in what is a veryimportant year for ASEAN and we look forward to its leadership.

It is in theinterest of the Indo-Pacific and the world that ASEAN becomes an even morepowerful voice and player in regional affairs.

As wenegotiate strategic challenges, we must be mindful that economic competitionwould become more intense. Globalisation, technological advances and the free flow of people andcapital between countries are breaking down sovereign economic borders. Countries must compete or fall behind. They cannot shield their economies fromcompetition and increase prosperity at the same time.

In our worldof increasing and irreversible competition, countries will only enjoy lastinggains through undertaking domestic reforms that make us more competitive andattractive to others.

We must worktogether to ensure that competition does not become a zero-sum activity whereone side gains at the expense of the other side.

We cancooperate in order to better compete, especially between countries that do nothave the advantage of tapping into a large domestic market to find furtheropportunities to grow.

PresidentDuterte's ten-point Socioeconomic Agenda is designed to make the Philippinesmore competitive, productive and attractive to local and foreign firms throughinitiatives such as improved infrastructure spending, a stronger focus oneducation, macroeconomic stability and tax reform. This is what nations must do as competitionfor capital, human talent and markets become more intense.

Australia isa reliable and committed development partner with the Philippines.

When Ivisited Manila in 2015, I announced Australia's further contribution of US 2.5million dollars to the innovative Philippines Public-Private PartnershipCenter.

In 2015 and2016, we helped the government to tender and award two infrastructure projectsworth US $631 million dollars.

Australiaremains the key bilateral donor to this center and will be a making furtherfinancial contribution to support its important work.

We areworking with the Philippines on the development of competition policy to ensureefficient and fair market competition amongst businesses engaged in trade, industry,and other commercial activities. Thisincludes our support for the establishment of the Philippines CompetitionCommission and assisting the Department of Budget and Management to implementpublic finance reform.

Australia'ssupport for Filipino education is a $90 million dollar investment over 5 years,designed to enhance teacher quality and curriculum standards.

Key elementsof our economic partnership are focused on working together to develop Mindanaoas a major economic centre. Indeed I willbe traveling to Davao tomorrow to announce further initiatives that build onthe already significant strides taken by the current government in thatregion.

By improvingthe economic environment and competitiveness of the Philippines, there will beincreased opportunities for the already 280 Australian firms operating in thePhilippines and many more that would do so in the future.

There areother ways that we can make globalisation work in our favour throughcooperation.

This examplewill draw inspiration from the past. Since the 1950s and starting with the Colombo Plan, we had providedfunding for scholarships, fellowships and short-term training to over 3,500Filipinos.

In the longtradition of partnership and reciprocity between our two countries, we are nowsending some of our best and brightest to the Philippines to live and study inyour universities, and undertake work experience here under our New ColomboPlan. We have supported 219 Australianstudents to study and work in the Philippines since our launch of the NewColombo Plan in the Philippines in 2015. That number should only grow rapidly in the years ahead.

Investing inour young students under the New Colombo Plan is an investment in theAustralia-Philippines bilateral relationship. These young Australians will develop a lifelong interest in andconnection with the Philippines. Conversely, over 11,000 Filipinos have enrolled in Australian educationinstitutions in 2016.

Like our NewColombo Plan scholars, these students will be the leaders of tomorrow who wouldchampion and drive economic cooperation and commercial ties between our twocountries and deepen our friendship into the future.

So these arejust some of the ways our two countries can cooperate at every level to groweconomic opportunities.

Australiaand the Philippines are experiencing exciting and interesting times. We officially became comprehensive partnersin 2015 and we are working to agree on a plan of action for the next 5 years. This is part of our commitment to workconstructively with each other and with allies and partners on economic andstrategic matters. If we do that, we canadvance peace, stability and continued prosperity for our two countries and ourregion.