Thursday, August 31, 2006

Strengthening the Mindanao Exporters

Our local exporters are the country's main foreign exchange earning group next to the Overseas Filipino Workers. Each year, the country supplies the world with agro and marine products, home furnishings, merchandising, electronics, IT services, among others.

Mindanao’s total value of exports went up by 13% or posting a double-digit growth from US$338 million in first quarter of 2004 to US$382 million in first quarter of 2005. The said growth was attributed to increases in export values from Mindanao’s major export products particularly coconut oil, fresh pineapples, nickel ores and desiccated coconut.

Despite the robust figure, there are still many things to improve on, if we are to compete with our neighboring countries like Malaysia, South Korea and Japan. The export industry is keen on this, and it brought the local government units and the exporters together in the localized national export congress held in General Santos City.

There was a pre-congress that has introduced to the region the objectives of the localization effort and has led to the identification of regional concerns which the different line agencies have to respond to by submitting appropriate action plans to be implemented at specific time duration. The event focused on the issues of the priority exporting sectors which included the vegetable and fruit, resource-based sector, marine, and the Information communication and technology (ICT) sector.

Issues and Concerns

Key industry leaders have represented the region’s exporters in presenting the most pressing issues of the region. Critical issues that arose were lack of financing assistance to Small exporters; and the software piracy which is killing the ICT industry; infrastructure and telecommunications development, tariffs and taxes, and market penetration strategies.

The main issue that came up was financing, due to stringent requirements, high interest rates and lack of financial support for capital investments. This affects fruits, marine and other resource-based export sector.

Infrastructure came second, due to lack of post harvest facilities; inadequate processing and cold storage facilities; inadequate fish quality control laboratory; insufficient infrastructure and investments on telecommunications and internet cafés; limited entry of public telecomm services; and no ICT park accredited building to accommodate ICT related businesses.

Cost of doing business was also a major concern with high cost of freight charges; high cost of transportation and shipping; road blockades as landowners of private roads collect toll fees from the company trucks; and Stringent export and import documentation procedures. This affects the Fruits, Marine and aquamarine, Vegetables, other resource-based sector.

Product development and marketing were also mentioned, the challenges being: limited product concentration (need to diversify and adopt new technologies); need to improve quality; insufficient research and development programs in the region; improper post harvest. Lack of strong marketing organization or consolidator; narrow export market; weak branding or absence of brand or institutional packer for fresh and frozen tuna; lack of investment promotion and tax incentives; High Tariffs of the United States and the European Union (EU) on our canned tuna; Insufficient EU quota allocation for canned tuna; Expiry of EU TRQ regime; Implementation of EU GSP on canned tuna; Import ban on smoked tilapia in Japan.

Tuna concerns included the need to distinguish and establish the two classifications of tuna in the region, the canned and the fresh-chilled, which need to have separate rules and regulations given their difference. The Filipino tuna sector is also threatened by the foreign players who receive incentives such as tax free status while they sell to domestic market whereas the local tuna is priced with 35% tax.

On the IPO concern, several exporters were complaining on the tedious process of securing intellectual property rights from Manila and thus propose for IPO to establish a desk with the DTI offices. Exporters reported that it is often easier to patent products outside Philippines but this would not provide enough protection for them.

The insufficient support due to budget constraints of the Bureau of Fisheries was highlighted; as its budget is lumped together with the other bureaus of the Department of Agriculture. There is a need for the private sector to advocate for the BFAR to become a separate Department. BFAR was also criticized on their interpretation of the EU standards which causes the delays on the EU inspection. BFAR unfortunately was not represented in the congress.

The region also recommended for the fast tracking of the implementation of the project that would expand the Makar Wharf at Gen.Santos to enable the region to accommodate big foreign vessels and there would not be a need to bring some of their exports to Davao ports.

Secured Commitments

17 regional scorecards which includes commitments from DA, DOST, DENR, DTI, NEDA, BFAR, PCA, BOC, PPA, CHED, DEPED, DOTC, CICT, TESDA, DILG, DPWH, and NTC were secured during the open forum.

DTI plans to organize a financing forum for conduit organizations with the National Livelihood and Support Fund to facilitate access to financing thru information dissemination / forum.

To Intensify product promotion and marketing strategies DTI would spearhead the conduct of trade fairs, disseminate DTI-CITEM organized local and international trade fairs/missions, identify OFW associations to help promote and distribute region’s products, participate in national and international Food Expo (Japan and Taiwan) and conduct market dialogue/matching.

Related line agencies and TESDA would also work together at strengthening human resources of the region by way of trainings and technology demonstrations and transfer ; the use of educational mobile van to cater to remote areas.

For the ICT sector, web and data connection for internet access, and additional telephone systems would be provided to address the telecommunication development issues.

DTI and DOST would also assist in developing competitive products by tapping commercial attaches for market intelligence, providing testing/calibration services to clients and firms, and giving technical assistance like trainings.

So much work to do.. so many plans to accomplish …before we can truly make Mindanao the food basket of the Philippines .

Friday, July 21, 2006

The Mindanao Promise Can Be Delivered

I am a Mindanawon. In my opinion, the phrase “Mindanao: Land of Promise” is not a cliché. It is a fact. Let me tell you about Mindanao.

Mindanao is a beautiful island. Situated in the southernmost section of the Philippine archipelago, Mindanao is the second largest island in the Philippines. With a land area of 102,043 square kilometers, it occupies one-third of the Philippines' total land area and is larger than a number of Asian countries like Taiwan or Singapore.
Mindanao is strategically located within the East ASEAN region, almost equidistant to the eastern sections of Indonesia, Malaysia and Brunei Darussalam. This key geographic location underscores its potential to be a major transshipment point and center of trade in the region.


Natural Richness
Mindanao is rich in natural resources. A third of our land is planted with the country’s major crops – 100% of national production of cacao, 91%of pineapples, 90% of cacao and over 50% of coconut, coffee and corn. And of course – the pomelos, mangosteen , rambutans , lanzones plus our own salad bar of lettuce, tomatoes, carrots, cauliflowers, cabbages,etc. Our fruit basket of bananas account to US79.5 million of our exports; fresh pineapples at US 33.5 million and the tuna that we eat as sashimi at US 22.3 million.

So its no wonder that we contribute over 40 percent of the Philippines' food requirements and more than 30 percent to the national food trade

Mindanao is likewise endowed with rich mineral resources. Mindanao reportedly accounts for 80% of the national total deposits of copper, nickel, and gold. Currently, of the twenty-three major metallic projects operating in the Philippines, nine are in Mindanao (primarily in Surigao and Davao Oriental).Its metallic deposits include lead, zinc, ore, iron, copper, chromite, magnetite and gold. Gold mined in Mindanao accounts for nearly half of the national gold reserves. Its non-metallic mineral resources include marble, salt, sand, gravel, silica, clay, and limestone.

Cultural diversity and the island's natural beauty make Mindanao one of Asia's favored tourist destinations. White sand beaches, scenic volcanoes, vast orchid gardens, and various ethnic festivals are only some of its unique tourist attractions. Our tourism arrival was at 2 million from January-July 2005; hovering from 25%-25% increase in arrivals


Economy
Agriculture is the driving force behind Mindanao's economy. Close to a third of its land area is devoted to agriculture. More than one-third of the island's labor force is employed in the agriculture, fishery and forestry sectors. Mindanao accounts for over 40 percent of the Philippines' food requirements and contributes more than 30 percent to the national food trade. Mindanao's evenly distributed tropical climate makes it ideal for year-round crop production. If wisely harnessed, Mindanao's rich agricultural resources can serve as the Philippines' foundation for sustainable growth.

In the first quarter of 2005, Mindanao’s overall economic performance remained upbeat. Despite the uncontrollable hikes in oil and consumer prices, which brought down sectoral production from the rest of the country this period, Mindanao’s economy proved to withstand these pressures as exhibited by its key economic indicators. Notably significant indicators in trade and investments, and exports, among others, backed up the said performance.

The BOI and Phividec-registered investments reached P1.07 billion in 2005 posting a growth of 142% compared to its previous year’s performance; Exports sector in Mindanao exhibited a 13% growth rate; Cargo traffic growth reached 5.73% as well as a 1.99% increase in vessel traffic among the major ports in Mindanao; A stable labor force as employment rates reached 94.7% while keeping unemployment rate at 5.3%; and, Value of private building construction increased by 5.1% from P1.96 Billion in 1st Qtr. 2004 to P2.06Billion in 1st Qtr. 2005.

The banking sector likewise plays an important role in mobilizing the economic development of Mindanao. It has contributed in the development of many small and medium scale entrepreneurs, and serves as one of the safe places for deposits for the burgeoning income base of Mindanaons.

Over the last three years, the Mindanao banking sector has displayed modest increase in the number of banking offices. From the report generated by the Mindanao Economic Development Council (MEDCO) there was a 2% increase in the number of banks operating Mindanao, from 877 in 2003 to 896 in 2004.


People
The primary asset of Mindanao is its people. Based on the year 2000 census, 18.1 million people or a quarter of the Philippines' total population reside in Mindanao. The island is home to some 27 indigenous cultural communities, as well as migrants from Luzon and the Visayas. Rather than an impediment, the pluralism of cultures in Mindanao is a major source of strength, particularly in trading with its multi-cultural neighbor countries in East ASEAN.

Mindanao has a relatively young albeit highly literate population. One-third of its population is aged 15 to 19 with a literacy rate of 90%. The island also boasts a versatile, adaptive and English-speaking work force. Generally, Mindanaoans are known for their positive outlook, pleasant disposition and warm hospitality.


Opportunities and Development Imperatives
Due to its rich natural resources which surpass those of Luzon and the Visayas, economic opportunities in Mindanao abound. With the recent revitalization of BIMP-EAGA of which Mindanao is an organic part, economic activities in the island are seen to further expand. However, Mindanao's resources must be judiciously managed to ensure their sustainability.
In its drive towards economic development through global trade competitiveness, Mindanao's leaders must not lose sight of social issues such as poverty and peace and security. These likewise need to be urgently addressed to ensure the island's sustainable development. Economic development programs should be undertaken hand in hand with programs targeted at alleviating poverty and installing conditions that would lead to long-term peace.
Jobs and Employment

We have a total labor force of 8.2 million; 95% are working or gainfully employed while the remaining 5% or 430,000 are unemployed. These are the seasonal workers in the farms and the plantations. Due to our robust agriculture based economy, our employment rate is higher by two (2) percentage points compared to the country’s 92.7%. Majority of our workers are in the agriculture sector; followed by services and manufacturing. This is mainly due to the bright and upbeat economic performance of the economy despite the hikes in oil and energy. As to be expected, the resiliency of Mindanao withstood the pressures of the environment


Mindanao, the troubled island
Amidst its beauty, Mindanao is a complex island with its own peculiarities and intricacies. To understand Mindanao is to go back to history and look at the facets that contributed to what it is today. Over the years, Mindanao has seen the light of day and the dark of night, with hostilities stalking its shadows, and region-wide poverty incidence scarring its beauty.

For many years now, Mindanao is beset by numerous problems on peace, infrastructure development and poverty. It is actually an irony that an island that holds so much promise of prosperity is home to millions of poor families, especially in the provinces of ARMM, CARAGA and Northern Mindanao.

The National Statistical Coordination Board (NSCB), in its 2000 poverty incidence report, showed all regions in Mindanao had over 30 percent of poverty incidence. At the provincial level, Sulu (ARMM) was described as the poorest province in the Philippines, with the highest poverty incidence level of 63.2 percent. Tawi-Tawi had 56.5 percent. Maguindanao; 55.1 percent; Lanao del Sur, 55 percent; Sultan Kudarat, 54.3 percent; and Camiguin, 53.1 percent.

In the 2003 poverty report, CARAGA with 47.3 percent, the Autonomous Region of Muslim Mindanao (ARMM) with 45.7 percent, and Western Mindanao (Region IX) with 44.1 percent, were still among the top 10 poorest provinces in the Philippines.


Hope Lives
Precisely because of this scenario that Mindanao has attracted numerous international development projects, to aid it in economic, social and political development. Majority of the country’s multi-lateral donor agency-projects are based in Mindanao.

Among these are Growth with Equity in Mindanao (GEM), Microenterprise Access to Banking Services (MABS), Livelihood Enhancement and Peace (LEAP) Program, GOP-UNDP-EC Programme on Rehabilitating Internally Displaced Persons and Communities in Southern Philippines, ACT for Peace Programme, United Nations Industrial Development Organization (UNIDO) - Industrial Development Programme, to name a few.

The hope for a progressive and peaceful Mindanao is not lost. Many Mindanawon leaders and stakeholders are now working towards making that hope a reality. We have been promoting Mindanao’s economy through the BIMP EAGA, an economic cooperation scheme involving the four countries of Brunei Darussalam, Indonesia, Malaysia and the Philippines. We have been pushing for a Federalism form of Government, as the effective approach to address to Mindanao’s peculiar social set up.

The GRP-MILF peace process is still underway, but negotiation is getting better. The green-leaf bearing dove, the most common symbol for peace, continues to hover around, with no solid branch or agreement to rest on. Yet the fact that the negotiation continues is a proof that a peaceful Mindanao will not remain a dream, and federalism may yet be that hope.

It’s simply a matter of time before Mindanao delivers its promise in full.

MOTOR VEHICLE EMISSIONS : THREAT TO AGRICULTURE

Various studies would show that motor vehicle emissions is largely harmful to a person’s health . Respiratory related diseases afflicting both the young and the old have all been attributed to a high degree of street pollution. The health cost of air pollution in four cities (Metro Manila, Davao, Baguio and Cebu) had been estimated to be more than US$$00 million per year; equivalent to .06% of the country’s national gross domestic product (GHP)

Agriculture is a way of life in Mindanao ; so I was particularly struck by a study done in 1990-1995 in the United States that showed the effects of ozone air pollution on the agricultural sector . The document that I read noted the economic impact of air pollution on agriculture and said that a 25% reduction in ambient ozone would provide benefits of at least $1–2billion annually in the United States(US).

This paper extends existing research by estimating the benefits of a reduction in emissions from a major source of ozone formation: motor-vehicle emissions. An agricultural production model is combined with an analysis of motor-vehicle emissions and air quality to estimate the impacts of emissions from six different motor vehicle classes at both the regional and national level. The benefits to the agricultural sector from completely
eliminating ozone precursor emissions from motor vehicles ranges between $3·5 and $6·1billion annually. The detrimental effects of ambient ozone, even at relatively low concentrations are well established (Heck and Brandt 1977, California Air Resources Board 1987) .

Studies show that ozone enters plant leaves through the stomatal openings in the leaf surface and produce by products that reduces the efficiency of photosynthesis. Research suggest that ozone either alone or in combination with nitrogen dioxide and sulfur dioxide may be responsible for up to 90% of crop losses resulting from air pollution . In an effort to address this problem, the Clean Air Act and its amendments in the US include air pollution damage to vegetation as one of the criteria by which air quality standards are evaluated.

There is an economic cost associated with this reduced productivity. There is a special focus on motor vehicles because they are the largest source of ozone emissions (Davis1997 ) and because of the growing general interest of the full social cost of motor vehicles.

International studies have shown that 25% reduction in the ambient ozone
would result to 1-2 billion dollars benefit to the agriculture sector of the US.

There were eight major crops that was tested and these were
corn, soybeans,wheat, alfalfa hay, cotton, grain sorghum, rice and barley.
The studies had indicated that ozone causes substantial losses to soybeans and corn.

Ozone formed from the emission of motor vehicles caused $2.0-$3.3 billion in damages to these eight crops. Gasoline vehicles cause much greater damages than the diesel vehicles because they emit more volatile organic compounds (VOC’s), which is one of the main precursor to ozone formation. These estimated damages are of course lesser than the damages done by vehicles emission to human health. But note that even a 10% reduction in vehicle emission may yield about $.05 billion in economic benefits in the US.

The issue of the hazards of air pollution and the gravity of it had not really sunk into the consciousness of many people in Mindanao. First, because we still have vast land resources as against the number of motor vehicles plying our streets. We still have the luxury of breathing clean air despite the large presence of vehicle emissions. We should not wait for the day when we become like another Manila where walking in the streets is like walking in the chamber of death .

Our Mindanao Land Transportation Offices(LTO) and the private emission test operators must show Manila that they have the political will to impose the emission test of motor vehicles with integrity. That the unscrupulous “fixers” at the LTO will come to their senses and realize that it is their family’s health that they are putting at stake for every “dirty” penny that they get. And that the vehicle owners undergo the process of testing and not circumvent the law by tolerating and patronizing corrupt practices in the testing process.
Remember that our people’s health as well as our fauna and agriculture is our only treasure in Mindanao!

Wednesday, June 21, 2006

THE BANKABLE BANKS OF MINDANAO

When we assess the economic performance of Mindanao, the development in the banking sector is one of the best indicators. Putting it simply, more banks
would mean that there is money and more money circulating around the island and that business must be robust.

We all know that our country’s banking system is composed of universal and commercial banks, thrift banks, rural and cooperative banks. As of December 31, 2003, there are a total of 7,494 banks in the country; 877 of these are found in Mindanao. The banking sector plays an important role in mobilizing the economic development of Mindanao. It has contributed to the growth of many small and medium scale entrepreneurs

Over the last three years, the Mindanao banking sector has displayed significant increase in the number of banking offices. From the report generated by the Mindanao Economic Development Council (MEDCO) there was a 2% increase in the number of banks operating in Mindanao, from 877 in 2003 to 896 in 2004.

Regional distribution for the number of banks operating in Mindanao in 2004 showed that Region 13 or CARAGA has the highest increase in number of offices with seven additions. Region 11 has four, and both Regions 9 and 12 have three new banks. Region 10 has two additional banks while ARMM has none.

Major factor in the increase is attributed to the physical growth of rural and coop banks, which gained additional 25 banks within the one-year period. Among the regions, Southern Mindanao has the most increase with eight new rural / coop banks, followed by CARAGA with seven and northern Mindanao with five. Rural and coop banks serve the needs of the micro entrepreneurs who , often than not, resort to informal money lenders for their working capital requirements. Because of this, they fall victims to high interest rates.

The period 2005 showed a minor fluctuation in the number of persons served by banks in Mindanao. In 2003, there were a total of 210,419 persons being served; this increased to 210,600 in 2004, but slightly declined to 209,896 in 2005, marking a total loss of 523 clients.

However, in the period between 2003 and 2004, quasi-banks in Mindanao such as investment houses, financing companies and pawnshops among others, rose by 8.5% or 1,713 institutions registered with Bangko Sentral ng Pilipinas (BSP) as against 1,578 in 2003. Of the total quasi-banks in Mindanao, pawnshops account for 99% of these. The presence of these institutions provide an alternative source of funds for the farmers and the small businessmen.

In the 2004 regional distribution report released by BSP, Region 11 which is the center of trade and services in Mindanao has the most number of quasi-banks with 486 financial institutions comprised mostly of pawnshops. Regions 12 with 393 and Region 10 with 331, closely follow.

Interestingly. with the increase in the number of banks, consolidated loan portfolio of Mindanao banks amounted to P61.645 billion in 2004 as against P60.817 B in 2003. Northern Mindanao or Region 10 has the highest loan portfolio at P 19,632 B; followed by Southern Mindanao or Region 11 at
P 16,904 B and the lowest at P 3.4 B at CARAGA. This would also indicate the level of investments and business activity in a given area.

In amount, commercial banks have the highest loan portfolio share at 71%, but in terms of signs of growth percentage rural banks lead at 117.74% between 2003 and 2004. Since the economy of our island is agriculture dependent ; majority of our farmers rely heavily on rural banks as their investment partner.

The increase in rural banks’ loan portfolio could also be traced in the growing micro-finance services they give to small and medium scale entrepreneurs.
Based on 2005 reports from the Rural Bankers Association of the Philippines, out of the 428 towns and cities in Mindanao, there are 286 RB offices servicing the island, which is actually 62% coverage.


Deposit Liabilities has likewise increased for all commercial, thrift and rural banks as they posted a positive growth trend for 2004 with a consolidated P354.26 B savings deposits as against P337.36 B in 2003. This is good news for us because savings again is an indication that the agriculture sector is doing well .

Top three Mindanao regions with the highest savings deposits growth are, Region 10 with P4.48 B increase, closely followed by Region 11 with P4.46 B, and lastly Region 9 with P2.47 B. Savings growth for other regions are, P.007 B for Region 12, P.065 B for ARMM and P.972 B for CARAGA.

The increase in deposits may also be the result of increased awareness of the market on the importance of saving for the future and also because of the robust economic activities in these communities where the banks operate.

The banking sector has been a key growth driver for the island’s small business enterprises as they are poised to expand their microfinance services for small and micro businesses nationwide.

In fact, micro-finance service has helped many banks grow its assets and loan portfolio. This indicates the micro-entrepreneurs' growing confidence in getting access to microfinance programs as a means to start a small business or expand their operations. There are now over 15,000 SMEs present in Mindanao who get capital access from banks.

To give you a better picture, lets take a look at how rural banks are strengthening their operations and are likewise strengthening the financial condition of the SMEs through micro-credit systems.

From the August 2003 report filed by the USAID-funded project Microenterprise Access to Banking Services or MABS, micro-loan portfolio of 37 MABS participating banks nationwide “surged to P291.65 million in August 2003, up from P282.million in the previous month. The number of micro-borrowers also swelled from 32,306 in September 2002 to 43,226 at the end of August. Micro-savings deposits also rose from P205.4 M in July to P228.98 M in August.”

The micro finance systems of banks and other financial institutions are developing new Filipino entrepreneurs and are helping marginalized sectors in the community shape their financial future. This is largely benefiting the poverty-stricken Mindanao regions.

Moreover, signs of growth are present in the Mindanao banking industry. The modest growth only proves that stability do exist in the island and that the economic wheel continues to move upward.

HABAL- HABAL : A THRIVING MICRO ENTERPRISE

Recently, I’ve noticed a rise on the number of single motorcycle vehicles used as public transportation. These single motors, more commonly known as Habal – Habal, has been plying the city and has been the object of many traffic issues, as they are seen as traffic nuisance, and unsafe for passengers.

At the start habal-habal became popular in the rural areas because of difficulty in finding public transportation there; it later spread out to the cities. Surprisingly , there are even habal-habals operating in Metro Manila.

This mode of transportation is not also cheap; but it affords one access to transportation where there is none ; and speed since the habal habal can easily squeeze its way out of traffic.

Amidst its illegal status, the habal-habal business seems to be a thriving one in Davao. Operating a habal-habal is already a viable source of income for many Dabawenyos. According to Traffic Management Center Chief Celso Gemepesaw, there are an estimated 14,000 habal-habal operators in Davao City and I believe still gowing.

Based on random interviews, habal-habal drivers earn an average of P600 / day gross and brings home a net earnings of P400 / day or an average of
P 8,000.00 a month or in better months a little more. This amount is just enough to provide food on the table for their families.

Just like any business endeavor, they get their financing from both formal and informal sources- from motorcycle dealers that charges them the daily amortization of P 100.00/payable in two (2) years. Or from other informal lenders that charges them a higher interest cost but longer paying period.
Whatever is the scheme, the drivers are able to meet their loan obligations which indicates that business must be good.

Since the payment is on a daily / weekly basis, and the motorcycle is the main source of income from the drivers, delinquency is kept to a minimum.

There was a study done by Asian Development Bank that shows that 28.9% of the Filipino population earns below $1 a day; and obviously these habal habal do not belong to this sector. I am glad that they are a little above the poverty threshold.

In an economy where agricultures is predominant, people with no land to till and with zero capital are force to exercise their maximum business acumen in order to survive. This is when we can see the entry of non traditional businesses with the barest of capitalization requirement- just like the “habal-habal”.

However, the recently passed Davao City Ordinance 0189, which is an amendment of Ordinance 737, requires drivers and riders to wear crash helmets and limits the number of back riders to just one. Significantly, it also prohibits the use of a single motorcycle as public conveyance or habal-habal.

The business of habal-habal is a business of transporting people to their destinations safe and sound. Although these motors do not operate in major highways and streets, they can still be unsafe, and extra precaution must be taken both by the driver and the rider.

City Legal Office (CLO) Traffic Regulation Division officer-in-charge Joseph S. Felizarta advised habal-habal operators and drivers to turn their habal-habal motorcycles into tricycles. This has to be done fast because we are talking of over 10,000 habal habal plying the streets of Davao .

The city government have to provide the technical assistance so that these can be done immediately for both the safety of the riding public and the driver.

Bottom Up Approach To Peace

Peace and order condition and economic development are closely intertwined.One is indispensable to the other. Economic development can be pursued onlywithin a peaceful environment. When the economy is doing good, there is a better guarantee of a peaceful environment. And this is particularly true inMindanao.

This is not to simplify the complex issues of peace and development in Mindanao. These issues have socio-political and cultural roots. However, history and reality tell us that economics is also an important factor.

That is why the government, business community, and non-government organizations have always put peace on top of their economic development agenda. Peace and development have always been a main topic in thevarious conferences, summits, and other fora. These includes the annual summits initiated by Kusog Mindanaw, Mindanao Commission of Women, NGOs, business groups , media and other organizations. These initiatives manifest the acknowledgment by the various stakeholders in Mindanao that peace and development must go together.

Various foreign donors have also signified intention to continue supporting peace and development initiatives in Mindanao. These initiatives include livelihood projects, particularly for the disadvantaged sectors in the poor regions of theisland, where assistance is most needed.

Recently, another important summit was held in Sulu. Organized by the Province of Sulu, in collaboration with the Mindanao People's Peace Movement, the 4thBangsamoro Summit gathered over 50 participants coming from various sectors of the tri-people community at the Tabang Sulu Hall in an effort to contribute inforging lasting peace and development in Mindanao. The summit consolidated insights of various sectors to substantially contribute in the peace building initiatives in the region.

The summit also served as forum to assess the livelihood programs initiated for former combatants of the Moro National Liberation Front (MNLF) who havebeen provided access to livelihood opportunities.

Although there are many other summits initiated by different sectors, it is good that there are summits specially organized for the tri-people where the is no substitute implementation of livelihood programs must be intensified. There is no better substitute to touching base - getting the pulse of the people in the communities who know best how to properly address their concerns. This reinforces the bottom-up approach in looking for sustainable solutions to lasting peace and development.

The results of the 4th Bangsamoro Summit should serve as important reference for other sectors and organizations who have periodic conferences and consultation. While the summit may be area- and sector-specific, the approaches and strategies employed in successfully implementing livelihood programs in the Moro communities may help other organizations in enhancing their programs to dovetail with the needs of the target beneficiaries.

Again, there is no substitute to touching base. There is no such thing as conclusive assumptions and presumptions in working for peace and development in Mindanao. No one knows better than the people in the communities themselves.

Wednesday, March 22, 2006

IS CDO OVERTAKING DAVAO ?

I read this email from a reader with great interest. I think this should serve as a wake-up call and a real challenge to both the private sector and the government. We need to act and move fast!

Dear Ms Jojie Bian,
I'm one of the forumers in SSC or http://www.skyscrapercity.com/. And we have been promoting Davao City - its culture, sites, and business climate. As a forerunner, I have been active with other Philippine forums as well like those of Cagayan de Oro (CDO and Cebu. I'm currently living in Cebu now and working with the call center industry for 2 years now. Before transferring here in Cebu, I have been working with the same company in Makati as well.

I am so pleased with the good news which you have written and posted in http://www.inq7.net/ and http://www.mindanaotimes.com.ph/. It's about making Mindanao as an IT Hub.

However, one thing that is my concern though is how other cities are overtaking us now. I'll have to specifically stress out CDO for this matter. Just currently, Ayala did confirm the pursuance of their investment in CDO - which is a development of an Ayala Business Park! How did this happen? Why did Ayala decide to invest in CDO and not in Davao? I thought we are far more advance than CDO? I thought we are the premier city in Mindanao and its de facto capital? In this case, would this mean that CDO has overtaken us? Just as how Ayala became the catalyst of growth here in Cebu and in Makati, for sure this will boost CDO's economy....and where will we be (Davao) at that time?

Also, from your recent article "Mindanao as an IT Hub", you have mentioned about CDO's IT Park..why cant Davao have one? I am sure you are aware why Cebu's ICT industry is so upbeat...one of the major factors is the present of several IT parks and zones.

Madam, I adore your advocation to promote Mindanao. But sometimes I wonder, aren’t we from Davao been extending our help that much to other Mindanao Cities and thus forgot to help our own city first?

CDO has its own IT Park and now a business park! Davao? well we have a lot of plans that remained plans till now. I remember few years back (when i was still 19, now im already 23) I had also read an article written by you about almost the same issue...Making the island as an IT Hub. And there were talks to have the very first IT Park outside Cebu and Manila in Davao....But what happened? CDO has overtaken us.....

There are a lot of plans......the development of Sta Ana Wharf to become somewhat like the Fishermen's wharf in San Francisco, the ICT Park, the business parks, development of PTA Grounds to be like Greenbelt of Makati, the MRT, the coliseums, the Samal - Davao bridge, etc etc....but these till now (after almost 5 years) are still plans.

Madam, I thank God to know a Davaoeña like you whose goal is to promote Davao City. I wish there is something that we (the average Dabawenyos) can do to help. I do not want to wake up one day knowing that CDO has fully overtaken Davao.

From : "shealthiel jech oczon"

Tuesday, March 14, 2006

Mindanao As I.T. Hub: Part Two

Cyberservices is a new term that describes services delivered via cyberspace. These are information technology-driven services that include call centers, medical transcription, back office operations, and animation.

In the Philippines, call center services is the largest sector in the I.T industry, absorbing 63% of its total workforce. In just a few years, Philippines has strengthened its services from inbound customer support and outbound telemarketing to more technical support service such as computer hardware troubleshooting. We are currently at par with global standards, closely competing with India and China, while offering the best value. And as the sector grows to greater heights, large call center companies are expanding its reach across the nation, seeking for more competitive labor costs, and cheaper infrastructure and operational expenses in other cities aside from Manila, Angeles and Cebu - and southern Philippines is targeted as the next destination of growth.

But, is Mindanao ready?

In its recent report, Commission on Information and Communications Technology (CICT) projected that the call center sector will have to employ 388,000 agents to meet client needs in 2010. In order to deliver this, call centers should not limit their Mindanao activities on recruitment for relocation purposes alone. Setting base is inevitable considering the many perks in Mindanao cities, specifically the availability of cheaper and reliable power and communication infrastructure, less expensive cost of living, good incentives for I.T. companies, numerous vendor support, and transportation infrastructure.

Mindanao is also fast opening itself to advancement as it targets cyberservices to be the industry that will not only boost the economy, but will also secure its people from leaving home. In addition, redistribution of wealth, the return of talents, triggering of commercial activity, and attracting more investment from other sectors are significant, positive effects of call center presence in the provinces.

Local communities and its leaders recognizes Mindanao's potentials in providing call center needs in the near future. This sparked interests from various groups and business organizations to cooperate and unify in order to make Mindanao cities an attractive and suitable locations for the industry's growth.

Mindanao as the next I.T. Hub

Such widespread investment promotion campaign embarked by various Mindanao stakeholders, captured the interest of some of the well-known call centers causing them to visit major, Mindanao cities for expansion consideration. So far, Cagayan de Oro and Davao City pioneered by collectively attracting four call center operation set-ups in the city proper. My very own company, Joji Ilagan Foundation Inc., will be operating a state of the art training academy for call center agents and personnel in partnership with John F. Kennedy Foundation; and a Call Center projected to have 200 seats. This training academy will open start operating on April and the BPO contact center on June of this year. The training center will also ensure the continuous presence of skilled manpower to serve the needs of IT investors and BPO’s that intends to locate their businesses in Davao and the nearby cities like Gen. Santos.

Mindanao, with its skilled labor and quality of life, recognizes its capacity to deliver investor requirements in setting up call center operations. We produce competent professionals with excellent reasoning skills, English communication and computer skills, and workers flexible in various work environments. And of course, Mindanaoans are famous for being friendly, courteous and industrious individuals - a plus point in this line of work.

On the other hand, Mindanao has its own challenges and limitations. For one, not all cities have I.T. Parks and zones, and this discourages I.T. investors who seek additional incentives that an I.T. park/zone could offer, in addition to the flexible requirements it imposes. Most of the cities are yet to follow Cagayan de Oro's Pueblo de Oro IT Park, the first of its kind which houses an international call center.

There is no reason why Davao and Cagayan and the rest of Mindanao cannot become the IT hub for the Southern part of the country and of the East Asean region.

After all, everything else is in place - competent manpower and adequate communications and transportation infrastructures.

MINDANAO ICT: Full Blast in 2006

Expect this year that Information and Communication Technology (ICT) in Mindanao will be taking a massive leap to profitable and ever-expanding services. Similar to emergent and forward-looking economies, Mindanao is “upgrading” itself to be at par with the world’s best ICT applications. Its vision for competitiveness and modernization was evident during the 4th Mindanao ICT Congress, wherein various key players from the six regions gathered to address the need for innovative revolution in our ICT industry.

The congress focused on enhancing the rapid distribution of knowledge and information as means to finding its proper niche in the global village of the 21st century. Conducted in General Santos City last year, the successful gathering resulted to the passing of seven policy resolutions and the discussion on the several key issues of the industry.

One of the resolutions calls for both the public and private sectors to intensify the promotion of investments in the ICT sector in Mindanao. This cooperation is critical particularly in encouraging investors that Mindanao is peaceful, orderly and above else, ICT-ready. To support this marketing initiative, a resolution urging the Telecommunications Office (TELOF) to fast-track the establishment of 37 identified community e-centers (CeCs) and 42 e-LGU CeCs in Mindanao was presented. It specifies the generalized resolution calling for the expansion of rural connectivity in the Mindanao regions, specifically in the Autonomous Region of Muslim Mindanao (ARMM).

The stakeholders also urged concerned government agencies to develop the IT skills of Mindanao’s human capital and businesses. In this campaign, it was suggested that the Department of Education (DepEd) subsume effective computer applications in the curriculum of primary and secondary education. Likewise, the Commission on Higher Education (CHED) and the Technical Education and Skills Development Authority (TESDA) were tasked to monitor IT schools and business process outsource companies to guarantee that graduates possess the skills acceptable to the ICT industry. Mindanao is targeting markets of contact centers, BPOs, animation, software development and medical transcription. Each sector demands different knowledge and skills, and therefore more education and training programs are needed in order to address the special labor requirements attached to it.

Open Source technologies gained a considerable amount of curious, or otherwise fearful, following at the second half of 2005, when authorities allegedly raided offices and internet shops for copyrights violations on operating systems. As such, the private sector began urging government agencies to mount an aggressive and widespread information drive to all ICT stakeholders about the nature and benefits of adopting Open Source technology for business operations. This is, in fact, a very attractive alternative for small businesses who could not afford the legal rights to utilize commercial systems, but could not afford to do without a computer. Open Source is not only free, but it’s the option for lawful business transactions for those who are tight on the company budget.

Overall, the successful 4th Mindanao ICT Congress highlighted the necessary inputs from all stakeholders in order to achieve the goal to make Mindanao the “Knowledge Center in the Asia Pacific” by 2010. Will we be able to keep up with the times? We will surely take it one step at a time, but for sure, Mindanao is getting there.

JOBS AND BUSINESS

The Regional Technical Education and Skills Development Committee (RTESDC) is the highest policy making body whose members come from both the private and public sector . This body is mandated to focus on the technical vocational education and training of human resource of the region together with Technical Education and Skills Development Authority (TESDA) The members of the committee are appointed by the President upon the recommendation of the sector they represent. So you will have business/industry, labor, academe, Local Government Unit , Departments of Trade and Labor, TESDA in the said body.

I had been chairing these committee for the past two (2) years and in yesterday’s meeting , we were given a presentation by TESDA X1 , headed now by OIC Urbano Budtan. The report was impressive – it clearly showed t that they had surpassed their targets significantly; but what is worth mentioning – is that they did all of these by using up only 60-65% of their budget. I believe that credit should be given to the TESDA regional and provincial leadership as well as to the personnel for their commitment , dedication and efficiency. Seldom can we find such accomplishments among our government agencies !

For the record, TESDA had trained over 70,000 people; assessed 14, 200 and had certified over 3,000. These figures simply informs us that these are the people who are “job-ready” and who will be out in the field in the search of companies and industries who will need their skills.

The World Economic Forum in Davos Switzerland had just ended and one of the more important issues that was taken up was the mobility of labor or job seekers. Our overseas Filipino workers are fast increasing in numbers - from household work , entertainment, care-giving to infants and elderly to the field of nursing and medicine. Even our farmers , carpenters and fishermen are finding high-paying work in Japan.

The basic problem common to all under developed countries is job creation . And we all know that to achieve this – there must be investments and business . And for these economic activity to happen – transparent and supportive governance must be present.

One of the major reasons why people leave their country is when they could no longer find economic security; when workers are not empowered; and when they see that the “fields are greener “ on the other side. This is not solely a Philippine problem; this is also common to other less developing countries. Migration is one of the major political problem today. It can even pose as a security threat or risk for other countries. How then can we stop people from moving from one country to the other ?

In order to entice our people to stay and work here ; it is but logical that we have to provide them with an environment that will provide them both the economic and social security that they want. We all know that the strongest mover of the economy is private enterprise/business. They have to be allowed to grow and to expand through government policies that are business friendly; policies that are productive; open markets; reasonable taxes; sensible and relevant regulations. Honestly, this does not happen often. I really cannot understand why government , most of the time, enacts legislation, executive orders, memorandums which are irrelevant and adds more red tapes and bureaucracy. Government has a way of making something so simple – so difficult and complicated. I hope that this year of the fire dog will be better. The dog is man’s best friend ; so let’s hope government can be “friendlier” to business!

Mindanao have a vast resource of human capital that is highly skilled and educated. These can be attested by our employment rate of 92% for 2005 and a low of 8.23% unemployment rate. It was only the agriculture sector which posted a positive growth in employment ; both services and industry were on the negative trend.

It would be good to see a paradigm shift in the year(s) to come ; where Mindanawans will no longer “jump to the other side of the fence “ because the “pastures are greener” right here.

MINDANAO BUSINESS TACKLES POPULATION MANAGEMENT

Population management has been a major initiative of the Philippine Chamber of Commerce and Industry(PCCI) and selected chambers of commerce in Mindanao (Davao , Dipolog, Gen. Santos and Tawi Tawi) as well as in Luzon and the Visayas. It was felt that business intervention was needed to address the burgeoning problems that our excessive population growth stimulates. More importantly, population management offers us a new horizon to look at new methodologies in improving firm productivity and competitiveness. PCCI understands the effects of population growth and the part it plays in the Philippines’ development and growth of business. It aims to understand how population growth affects workers’ productivity and the necessary interventions to improve employer-employee relations.

In 2000, Mindanao had a population of 18,233,715 and is projected to increase by 2.11% in 2005 or 20,289,100. Region 11 is seen to be the area with the highest population increase in 2005 at 12.73% ; from 5,189,335 in 2000 to 5,905,254 in 2005. This is followed by Region 13 or CARAGA at 2,244,562 (11.99%) ; Region 1X at 3,526,566 (11.83%) and Reg X11 at 2,972,733 (11.72%).

Surprisingly the lowest projection for increase in population is at the Autonomous Region of Muslim Mindanao ; from 2,412,159 in 2002 to 2,366,232 in 2005 or an increase of 8.18 % . This must be the result of the efforts to provide greater access to education and health services in the ARMM.

Mindanao data in 2000 would show that poverty incidence to population was 44.26% in 1997 and it went up to 46%; per capita poverty threshold was P10769.00 and per capita food threshold at P 7,434.00. The average annual income in 2000 was P 96,978.00 and expenditures was P 78,803.00. These figures are all affected by the rate of population – more people will call for more available jobs , more food and more of everything. Growth of business and economy should be much higher than increase in population so that life will be better for all.

Looking closely, population determines significant economic indicators such as labor productivity, economic growth, and prevalence of diseases, well-being of women and children, mortality, and poverty.

Businessmen in key centers of Mindanao now understand the implications of a high population rate and its profound impact on the sustainability of business. With the strong support of PCCI and its partners – more notably the Philippine Center for Population Development (PCPD) and PRISMS-USAID Programs , we were able to encourage nationwide participation in population management activities.

These activities include planning workshops, training modules, and seminars which bring information and spur activities in each of the area. The idea is to help individuals and couples to come up with an informed decision and to exercise their freedom of choice.

PCCI will be conducting a nationwide consultation all over the country specifically in drafting the criteria and terms of reference for a nationwide award and recognition for all levels of business that implements or conducts a population management program in the workplace. What is interesting is that this award will be open for even the small and medium sized firms , as well as the big multinational companies and industries.We hope to increase awareness through our program. These are baby steps that can eventually lead to a big leap.

The strategy that is being implemented in the region is three-pronged approach that include advocacy, linkages with service providers and setting up of common service facilities to cater to the eminent needs of SME workers and their families. This conventional approach enables local chambers to be self-sufficient as well as allowing them to develop innovative ideas to carry out tailor-fit programs to respond to their individual needs.

The Philippines still has a long way to go with respect to managing the country’s growing population. The common denominator, I guess amidst varied opinions among stakeholders in the society on this crucial issue, is the need to improve the living condition of some 30 million Filipinos in both urban and rural centers. Unless we see clear indications on how poverty in this country can be reduced substantially, then debates on population management are just as good as a lip service. We have to run programs that go beyond talks, we need policies that go beyond debates and we need champions to step beyond their call of duties, to become advocates for social change and progress.

Setting simple goals for ourselves like developing local chamber and infrastructure, personnel, and services can be considered a sizeable improvement. But, it’s not about doing extraordinary things – it’s doing things in an extraordinary way.

DAVAO… ALWAYS AT ITS BEST

Davao, today, is experiencing what it always has dreamt of. Throngs of visitors and tourists , both domestic and foreign , strolling in the peaceful streets of the city and enjoying every minute of it. The sales of the malls as well as the smaller stores and boutiques are a record high. The vendors selling candies and cigarettes, the taxi and jeepney drivers, the fruit stalls- all of them smiling from ear to ear because business is just too good!

This is the Davao that we all want. All the different sectors , had worked so hard, not only today, but as well as in the past years, so that we can continue to move forward to sustain peace and development in the city. We were never bothered by the often-times mistaken perception of others about our city- we continued to focus and strive harder to achieve our vision . And now all of our collective labor is starting to pay off .

What a good way to start the year ! The Chinese believes that if you start the year right.. the rest of the year will be “more than just right” The Asean Tourism Forum which started last week will be a big boost to our tourism industry. The event will surely put the name of our city in the minds of every tourist seeking for a destination that will provide him with a perfect blend of the rural and urban /metropolitan attractions and amenities.

I am now in Seoul, Korea for a very important business trip and the first greeting that I got from our partner here was “ How’s Davao ? The city must be so “noisy” now with that tourism event”. I told them that the city was “exploding” with activities and events and people running all over the streets. I am so proud of what is happening- more so because deep in my heart, I knew that what we are showing our visitors now is really what Davao is – with or without the big ASEAN event.

What we are projecting now to our thousands of guests , is not a “put on” or “ cosmetically enhanced”. For women, like me , these terminologies mean “artificial or something temporary” of which the main purpose is to “impress or to show something good or beautiful”.

Davao City, has and will always project the best of the city – the best of its people and attractions. People here are warm, friendly, kind and hospitable. This is the city where people take the time to greet each other with a smile, a kiss or a handshake ! Many of my friends from Manila would always comment that “ Davao is one big neighborhood” because everyone seems to know each other.

The business environment is conducive to those who want to invest here- the existence of a transparent governance leaves very little or no room for bureaucratic red tapes and corruption. Business transaction is virtually smooth and easy. The small and medium sized entrepreneurs will find the city a haven to make their money grow. The cost of real estate and manpower productivity continues to entice multi-national and big corporations to build their factories and plants here.

I am sure that all of our guests will go home taking a piece of Davao in their hearts. I can assure them that Davao will still be at its best and even better , when they return.