Mindanao Review Volume 1 Issue 1

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Inside pages... Mindanao town seals cacao deal with international buyer MinDA chief urges Mindanao execs to submit viable tourism projects

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Academe sector expands inter-EAGA ties through educ exchange programs

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Phil to host largest subregional trade fair and business gab

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indanao

Review

The official publication of the Mindanao Development Authority

August 2014

Volume 1, Issue No. 01

Mindanao agri products post solid growth

Mindanao is still the country’s top producer of pineapple (main photo), banana, rubber, and coffee (inset photos l-r) in 2013.

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indanao continues to make substantial contributions to the country’s agriculture output, maintaining its strength as an agriculture-based economy despite natural calamities that pulled down production in some sectors. Selected industrial crops, fruit crops, and fisheries in Mindanao fared well in their production output as reported in the “Performance of the Philippine Agriculture” by the Department of Agriculture - Bureau of Agricultural Statistics 2013. The island-region accounted for almost 100 percent share in the nation’s rubber production in 2013. Out of 444,793 metric tons (MT) produced by the country, 444,653 MT were sourced from Mindanao. This represents a minimal growth of 0.4 percent, spurred by an increase in areas planted and in number of mature tappable trees. “Mindanao is the biggest rubber producer in the country, attributed to rich soil and good

climatic conditions in its rubber-producing regions,” said MinDA Chair Luwalhati Antonino. Zamboanga Peninsula was the country’s top rubber producer with a 43.9 percent share in the total output, followed by South Cotabato Sultan Kudarat Sarangani General Santos (SOCSKSARGEN) Growth Area at 38.9 percent and the Autonomous Region in Muslim Mindanao (ARMM) at 10.5 percent. Combined production of these two regions accounted for 93.3 percent of the nation’s rubber production in 2013. Mindanao also contributed 88.8 percent to the total pineapple output in the same year, contributing 2,182,171 MT to the country’s total production of 2,458,423 MT, representing a 2.4 percent growth. Production growth was influenced by reduced insect infestation and bigger fruits harvested in Zamboanga Peninsula, and expansion of corporate farms in Northern Mindanao.

The country’s top pineapple producers in 2013 were Northern Mindanao and SOCSKSARGEN whose combined output is 87.4 percent of Mindanao’s total production. While banana production contracted by 7.2 percent in the island-region, producing 7,013,207 MT in 2013 compared to 7,559,047 MT in 2012, it still accounted for 81.1 percent of the total banana production in the country last year. The decline is attributed to banana plantations in Davao Province that have not yet fully recovered after being levelled by Typhoon Pablo in December 2012. Despite this, Davao continues to be the country’s top banana producer with a 37 percent share in the national production, followed by Northern Mindanao at 20 percent and SOCSKSARGEN at 14 percent. Mindanao’s cassava production grew by 7.2 percent, climbing from 1,690,383 MT in 2012 to 1,812,243 MT in 2013 backed by increased demand for commercial use, prompting farmers in Bukidnon and ARMM to expand their farms. Mindanao’s total cassava output accounted for 76.8 percent of the nation’s overall production of 2,360,527 MT, with ARMM and Northern Mindanao as the highest producing regions with a combined share of 69.3 percent. Owing also to the destruction brought by Typhoon Pablo in Davao and crop shifting from coffee to banana in Compostela Valley and Davao City, total production of all varieties of coffee in dried berries in Mindanao dropped by 9.0 percent, from 65,453 MT in 2012 to 59,564 MT last year. Turn to page 7

Mindanao in Figures: Mindanao’s total trade in 2013 clinched US$7.6 billion freight-on-board (FOB) receipts which registered a remarkable 15 percent increase despite the natural calamities that hit the islandregion’s agricultural lands and production areas in the past two years.


Mindanao town seals cacao deal with international buyer

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production and trading agreement aimed to integrate and scale-up cacao production in Mindanao was sealed recently between the local government of Marihatag in Surigao del Sur and the Kennemer Foods International (KFI). Marihatag Mayor Alan Pelenio and KFI President Simon Bakker led the signing of agreement at the Seda Abreeza Hotel in Davao City, which will initiate the massive planting of four million cacao trees in the town’s 5,000 hectare pilot site. KFI is a major supplier of US-based Mars chocolate and specializes in growing and trading high-quality agricultural crops including fermented cacao beans. “We are more than excited about our partnership with KFI and we’re optimistic that the people of Marihatag will enjoy long-term benefits from this initiative particularly that the project will be managed by its people organizations (POs),” said Pelenio. He added that the local government plans to integrate cacao with its existing coconut plantations since “cacao is best suited to be inter-cropped with coconut trees.” Pelenio said that part of the agreement with KFI is the capacity building of its POs since these organizations will be trained on the latest cacao production technologies to

ensure the project’s success. The initial planting of the cacao trees commenced on Friday in which 1,600 trees were planted in the town’s 2-hectare demo farm. The event was participated in by officials and staff of the Marihatag Local Government Unit (LGU), local chief executives

of province of Surigao del Sur, staff members of the Mindanao Development Authority (MinDA), and farmers in the area. “A P600,000 worth of cacao seedlings, or 30,000 trees will be planted next week,” said Pelenio while adding “we will be spending P50,000.00 per hectare for land preparation and eventual harvesting since it would take at least 18 months for cacao trees to mature and bear fruits.” An estimated annual gross income of P180,000.00 per hectare is projected to be generated from the project which is expected

to generate more than 500 jobs. “Aside from providing us with technical support, KFI is the assured market for our produce,” he said. MinDA Chair Luwalhati Antonino, who witnessed the agreement signing encouraged local chief executives in the island-region to grow chocolate producing cacao, of which its demand is currently seeing a spike in the global market. “Chocolate is a multi-billion dollar industry and Mindanao has vast tracts of land suitable for cacao,” she said while adding “Mindanao strives to become the country’s leader in cacao production.” Mindanao’s effort to scale-up its cacao production is part of the ongoing initiatives of MinDA’s “Inclusive Growth Program,” which seeks to facilitate investments that result in jobs and community empowerment, such as agribusiness projects where communities become integral to the supply chain. The initiative is also part of the Barangay StraTREEgic Forest Program (BSFP), a project of MinDA’s MindaNOW! Nurturing Our Waters Program, which supports the National Greening Program (NGP) that aims to plant 1.5 billion trees covering 1.5 million hectares across the country from 2011 to 2016.

Marihatag Mayor Alan Pelenio and MinDA Chair Luwalhati Antonino reply to queries from Mindanao-based media during the deal signing between the Municipality of Marihatag, Surigao del Sur and Kennemer Foods International held in Davao City (left). MinDA staff (top) participate in a cacao planting activity in Marihatag aimed to start up a 2-hectare demo farm that will produce high-quality cacao products (above).

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MinDA chief urges Mindanao execs to submit viable tourism projects

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inDA Chair Luwalhati Antonino urged local chief executives in Mindanao to come up with viable eco-tourism development proposals, which can be pushed by MinDA for possible funding from the Tourism Infrastructure and Enterprise Zone Authority (TIEZA) board. Speaking at the opening ceremonies of the 54th founding anniversary of Surigao del Sur, held in Tandag City, Antonino said that MinDA can help lobby for feasible tourism projects since the organization now sits as one of the members of the TIEZA board by virtue of Republic Act 9996 or otherwise known as the MinDA Act of 2010. She added that MinDA endorsed to TIEZA several tourism project proposals from the province of Surigao del Sur, which are currently being undertaken. These include the provision for road access and other support facilities for the Tinuy-an Falls, Enchanted River, and the Britannia Islets Jump-off point. “Surigao del Sur is host to a number of Mindanao’s key tourist destinations such as the Tinuy-an Falls in Bislig City, touted as the “Niagara Falls of the Philippines,” Hinatuan’s Enchanted River, which is unique to the country, and the becomingly popular Britania Group of Islands in San Agustin,” said Antonino.

Prior to the creation of MinDA and its membership to the TIEZA board, the entire island-region of Mindanao used to receive an average of seven to 10 percent share from the Philippine Tourism Authority’s (now TIEZA) annual budget. However, with MinDA’s membership to the TIEZA board, the island-region got a hefty share of 35 percent or P157 million from TIEZA’s budget for tourism development in 2011. A 40 percent share or P340 million from the P851.22-million TIEZA budget for tourism development in 2012 was also secured by the island-region. “Among the completed TIEZA projects in Mindanao in 2013 include the construction of Bagobo-Tagabawa Village in Sitio Lawon, Brgy. Tibolo, Sta. Cruz, Davao del Sur, the construction of Davao Oriental Provincial Museum, and the Lake Sebu development project. A P30 million budget was also secured from TIEZA for the construction and implementation of ecotourism projects aimed to protect endangered marine species and help sustain community-based tourism enterprises in Tawi-Tawi’s Turtle Islands, one of the world’s major nesting sites of marine turtles. Antonino, who recently went to the islands for an ocular visit last month said the

projects are aimed to provide the residents sustainable means of livelihood by promoting the islands as tourist attraction while ensuring the protection of the endangered species and their nesting sites. Other ongoing TIEZA projects in Mindanao include the construction of Baywalk in Brgy. Aplaya, Digos City, Davao del Sur; the Tourism Police Information Counter in Polomolok, South Cotabato; the World War II landmark in Rosario, Agusan del Sur; and the construction of one unit drydock facility or boat ramp in Siargao Island. “While Mindanao is blessed with natural resources that make ecotourism as one of its major economic drivers for growth, tourism development however, must not be pursued at the expense of our environment,” said Antonino. She called on Mindanawons to rally for the protection and conservation of the island-region’s watersheds and river basins under the MindaNOW! Nurturing Our Waters Program, which seeks to safeguard Mindanao’s environment from degradation. Antonino explained that Mindanawons share the same resource, “therefore we also share the responsibility of protecting and nurturing our environment,” she concluded.

Mindanao destinations offer a variety of spectactular sites and experiences such as (top, l-r) the breathtaking Dipolog sunset, a thrilling zipline ride in Lake Sebu, the cool natural breakwater of Laswitan in Surigao del Sur, (bottom, l-r) the sunken cemetery of Camiguin Island, and the magestic Tara of Butuan City. (photos by Kenny Nodalo; Dipolog sunset photo by Ruel Tabada; Lake Sebu photo contributed by Sheng Cabusao)

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GOAL

Aligning with the national government’s Social Contract with the Filipino People, the Mindanao Development Authority (MinDA) adopts the Mindanao Development Corridors as a key spatial strategy that will help pave the way for a connected and globally-competitive Mindanao. Under the Mindanao 2020 Peace and Development Framework as MinDA’s roadmap for peace and development, this corridors initiative aims to improve infrastructure, establish connectivity, and spur the development of growth clusters within Mindanao, allowing it to achieve balanced and inclusive growth among its regions. This will also help position Mindanao as a single, integrated economy that is able to leverage and participate in EAGA, ASEAN, and the global economic community.

A connected and globally-competitive Mindanao towards an inclusive, balanced, and sustained growth for the island-region.

OBJECTIVES Improve transport and logistics to support tourism, industry, and agriculture development. Reinforce the enabling business environment in the island for sustained trade with BIMP-EAGA, ASEAN and the rest of the world. Provide a platform for coordinated, integrated, and harmonized implementation of strategic programs and projects for the development corridors.

COMPONENTS

EXPECTED OUTCOMES

1. Industry Development

Increased connectivity and trade development through resilient and efficient inter-modal transport and logistic support system.

Increased productivity and job-generation opportunities in the Agri-Fishery sector, Manufacturing and Tourism sectors.

Higher economic growth levels through massive publicprivate investments.

Better opportunities for conflict-affected and conflictvulnerable areas to participate in economic activities that contribute to large scale development.

Balance of economic development and ecological integrity

Improved contribution of Mindanao to Philippine GDP by 7-8% in 2016.

Reduced poverty and sustained economic growth of Mindanao.

2. Connectivity Improvement

3. Logistics Development

4. Investment Promotion

The Mindanao Development Corridors Paving way to a connected and globally competitive Mindanao Mindanao Review | 4

5. Institutional Development and Policy Formulation


MINDANAO DEVELOPMENT CORRIDORS

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The Mindanao Development Corridors initiative focuses on optimizing growth of regions based on their potentials and strategic roles in the overall development of Mindanao. As a spatial development strategy, the corridor approach builds on the trade and economic strengths between and among regions through improved infrastructure, connectivity, logistics, industry development and investment facilitation. The island economy of Mindanao is subdivided into three (3) development corridors: Northern Mindanao Development Corridor, Southern Mindanao Development Corridor, and Western Mindanao Development Corridor, with five (5) industrial clusters that have complementary roles and competitive advantages.

NORTHERN MINDANAO DEVELOPMENT CORRIDOR

WESTERN MINDANAO DEVELOPMENT CORRIDOR

Davao-Kota Kinabalu Zamboanga- Muara

Davao-Manado

Zamboanga- Sandakan

Davao-GenSan-Bitung

SOUTH-CENTRAL MINDANAO DEVELOPMENT CORRIDOR

Business and Industrial Trade Cluster

Mariculture and Trade Cluster

Food Basket Cluster

Northern Mindanao is the gateway to domestic markets in Visayas and Luzon as it hosts the Laguindingan Airport, Mindanao Integrated Container Terminal (MICT) and other heavy and large industries in the Cagayan-Iligan Industrial Corridor. PHIVIDEC, with 88 manufacturing and service oriented firm locators, operates within the cluster.

Western Mindanao Corridor is the top producer of fisherybased products and seaweed in Mindanao, accounting for 60 percent of its total output. A large share of Mindanao’s total production in rubber (52%), mango (37%), and coconut (24%) is also accounted for by this corridor. This corridor enjoys edge in trade and economic cooperation given its cultural ties and proximity to Malaysia, Indonesia, and Brunei Darussalam

More than 50% of the Mindanao total agriculture production comes from the South Central Mindanao Corridor making it the food basket of the country. Of the total palay and corn production in Mindanao, around 60% and 55% is contributed by this cluster.

Food, Agri-Business and Logistics Cluster

Biodiversity and Eco-Tourism Cluster

Food, agri and agri-processing industry, and mineral resource development dominate the South Central Mindanao Development Corridor. Davao City, the business, tourism and services hub and General Santos City, the agri-business, trade, finance, and transport hub, serve as twin main growth centers in this corridor. Of the total Mindanao Gross Value Added in Trade, 54% is contributed by this cluster.

Biodiversity and Eco-Tourism Cluster in South Central Corridor is characterized by a diverse ecosystem with rainforests, cave formations, rivers, pristine shorelines, and critical habitats of endemic flora and fauna. Of the total 2.0 million hectares forest cover area of Mindanao, around 40% are found in this cluster.

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Mindanao trade up despite calamities

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indanao’s total trade last year clinched US$7.6 billion freight-on-board (FOB) receipts which registered a remarkable 15 percent increase despite the natural calamities that hit the island-region’s agricultural lands and production areas in the past two years. “We are happy to announce that Mindanao’s trade performance remains

reached US$0.911 billion last year, 45 percent higher than the US$0.6255 billion registered in 2012. Antonino however noted that there is a minor decline in coconut and palm kernel exports last year. From US$890.1 million in 2012, Mindanao’s coconut exports only registered US$773.8 million in 2013. The 13 percent

accounted for US$284.3 million. Antonino also reported that Mindanao’s total imports in 2013 reached US$1.2 billion. These imports were comprised mainly of petroleum oils, US$449.2 million; wheat and meslin, US$155.5 million; milk and cream, US$120.2 million; fish (frozen), $82.4 million; and mineral or chemical fertilizers, US$78.8 million, among others.

bullish amid the natural calamities that beset the island-region from 2012 onwards,” said MinDA Chair Luwalhati Antonino. Based on the data gathered and processed by MinDA, the island-region secured US$6.612 FOB receipts in 2012. Antonino added that Mindanao suffered heavy losses from Typhoon Pablo (Bopha) which hit hardest several provinces of Caraga and Southern Mindanao in December of 2012. “We anticipated a downtrend in some of the region’s agricultural produce particularly banana and coconut because of the typhoon, but on the contrary, banana remained as our top dollar earner in 2013,” she said. FOB receipts for banana products

shortfall is attributed to the number of coconut trees that were damaged by Typhoon Pablo especially in the province of Davao Oriental. The coconut industry accounted for 14.9 percent of Mindanao exports in 2013. “But our exports of nickel ores and concentrates significantly increased,” said Antonino, pointing out that in 2013, it recorded an increase of 72.86 percent, which amounted to US$639.5 million from only US$370 million in 2012. Moreover, other Mindanao major exports include fish (either prepared or preserved) and caviar that generated US$614.1 million or an increase of 92.33 percent from only US$319.3 million in 2012 as well as fruits, nuts and other edible parts of plants that

Mindanao’s major trading partners last year were the United States of America, China, Japan, South Korea, and Taiwan. Antonino said that as part of the efforts to help sustain the gains of the region’s trade sector, MinDA is advocating for the Mindanao Development Corridors, a development strategy that aims to achieve internal connectivity and strengthen the region’s local supply chains to effectively link production centers to the export gateways. (please see center spread) “With this strategy, we expect to create massive employment and generate more income particularly in our agribusiness sectors, as we accelerate trading with our economic partners,” she added.

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PHOT

synthesis

DENR-XI Regional Director Joselin Marcus Fragada (left) and MinDA Executive Director Janet Lopoz attend a media briefing in Davao City for the TreeVolution: Greening MindaNOW, a Mindanao-wide attempt to break the Guinness world record for the most number of trees planted simultaneously within an hour at multiple locations.

MinDA Chair Luwalhati Antonino visits Barangay Pagatpatan in Butuan City to check the natural gas which emanates from the town’s underground water source. The natural gas, believed to be Methane has been utilized as fuel for cooking by the barangay’s residents since the past two decades.

Academe sector expands inter-EAGA ties through education exchange programs

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nstitutional partnerships between the focus areas of the Brunei Darussalam Indonesia Malaysia the Philippines East ASEAN Growth Area (BIMPEAGA) continue to expand and diversify with the recently sealed academe collaboration between the Palawan State University (PSU) - Philippines and Jesselton College - Kota Kinabalu. The new partnership was forged through a Memorandum of Understanding signed in Kota Kinabalu, Sabah by the two universities, which aims to facilitate workplace industry placement and education programme exchanges between the neighbouring states. Through the partnership, PSU is expected to establish its own international programme in Kota Kinabalu. “One of the best ways to make the academe stronger and more essential is by opening our gates to collaboration and partnerships. It brings about creation of innovative ideas by bringing together a group of smart people who can have their hands on the pulse of our University’s community,” said Lorna Gelito, Ph.D., PSU’s Vice-President for Academic Affairs. She added that the partnership will establish the relevance of the academic sector in BIMP-EAGA’s pursuit for societal development and good governance. “We welcome this development as an opportunity to learn from each other’s experiences and expertise, highlighting the commonalities between the two cities,” said Datuk Teo Chee Kang, special tasks minister for Kota Kinabalu. Teo added that apart from academic and professional exchange, the sealed partnership

Mindanao agri...

Romeo Montenegro, director for MinDA’s Investment Promotion and Public Affairs Office (left) briefs Vicente Lao, chair of the Mindanao Business Council on the preparations for the 2nd BIMP-EAGA and IMT-GT Trade Fair and Business Leaders’ Conference.

Still, Mindanao posted a share of 75.8 percent of the total coffee production in 2013, and the country’s top coffee producers are found here,” said Antonino, referring to SOCSKSARGEN, Davao Region, and the ARMM which respectively contributed 36.7 percent, 15.8 percent, and 13.3 percent to the national output. Its coconut industry also made ample contribution to overall production at 58.8 percent, accounting for 9,021,844 MT of the total 15,344,919 MT. This is actually lower than its 2012 production output of 9,405,317 MT, representing a 4.1 percent decline caused by low production in areas hit by Typhoon Pablo.

is also designed to boost business and tourist activities between the two EAGA focus areas. During the 17th BIMP-EAGA Ministerial Meeting held in Manado, Indonesia in November last year, linkages between and among the universities in BIMP-EAGA have been identified as one of the priority initiatives of the sub-region. In a joint statement, the ministers urged the academe players to boost the student and faculty exchange programs among BIMP-EAGA universities. “Our academe sector plays a crucial role in generating strategic and relevant studies that will help narrow the development gaps across and within the sub-region,” said MinDA Executive Director and Philippine representative to BIMP-EAGA Janet Lopoz. She added that such initiative also helps strengthen the socio-cultural connection within the sub-region and facilitates the exchange of ideas and knowledge-based researches that will help improve crossborder relations among EAGA-member countries. The establishment of a socio-cultural cluster for BIMP-EAGA is currently being explored by the ministers to provide stronger government support to the emerging collaborations in the fields of education, vocational courses, sports, and film within BIMP-EAGA. “For years, we have relentlessly pushed for physical connectivity in the sub-region. With private-led initiatives on socio-cultural partnerships, it is high time for us to include in our radar the need to also connect the people of BIMP-EAGA,” Lopoz said. Mindanao Review

Mindanao Review is the Official Publication of MinDA

Publisher Sec. Luwalhati Antonino Editor-in-Chief Janet M. Lopoz, CESO I Editorial Board Reyzaldy B. Tan Romeo M. Montenegro Leoncio M. Rodaje Contributors Raymond D. Esperat Fritz E. Flores Kathy Mar S. Mateo Mary Ann C. Quisido Iris Mae F. Quizo 4th Floor, SSS Building, JP Laurel Ave. Bajada, Davao City (082) 221-7195 | www.minda.gov.ph

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Phil to host largest sub-regional trade fair and business gab

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he Philippines will host this year’s largest sub-regional trade fair and business conference that will gather the top business leaders and traders from two economic sub-regional groupings within the Association of South East Asian Nations (ASEAN). Business players from Brunei Darussalam, Indonesia, Malaysia, the Philippines, and Thailand will converge in Davao City from October 22 to 26 for the 2nd BIMP-EAGA and IMT-GT Trade Fair and Business Leaders’ Conference 2014, an international event designed to attract foreign investments and promote regional cooperation within Asia and the Pacific region. BIMP-EAGA stands for Brunei Darussalam Indonesia Malaysia the Philippines East ASEAN Growth Area, while the IMT-GT stands for Indonesia Malaysia Thailand Growth Triangle. “While both growth triangles have their respective road maps, this convergence will enhance our competitiveness by turning the sub-region into a single investment area and production network, thereby accelerating economic growth in Southeast Asia,” said MinDA Chair Luwalhati Antonino. MinDA is the Philippine Coordinating Office for BIMPEAGA. The international fair and business conference, which will be held at the SM Lanang Premier’s SMX Convention Center

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will feature a series of sub-events designed to strengthen economic, social, and cultural relations in preparation for the ASEAN integration in 2015. Antonino explained that the trade fair and business conference are follow through events to the 1st BIMPEAGA and IMTGT Consumer Fair and Business Transformation Leaders Conference held in Melaka, Malaysia in December of 2012, where the Philippines expressed its commitment to sustain the convergence by hosting this year’s fair and conference. Key exporters and producers in the ASEAN region will conduct sharing of strategies during the Business Leaders’ Conference, and will discuss the potential impact of the ASEAN integration on SMEs and on their participation in the supply chain. Also on the agenda are Climate Change Adaptation and the alignment of the four pillars of BIMP-EAGA, namely connectivity, food basket, tourism, and environment. Investment programs within the Mindanao Development Corridors, the island-region’s spatial development framework, will also be presented. The trade fair, which will be dovetailed by the Business Leaders’ Conference will

showcase the finest and unique products of participating countries as well as current developments in the services sector, technology innovations, and investment opportunities. Businessmatching sessions will be conducted simultaneously with the trade fair and the business conference. “This year’s trade fair will also bring together key business players from other ASEAN countries. “We aim to highlight market and investment opportunities for globally competitive products, as well as strategies to escalate private sector participation in integration initiatives of the two growth triangles into the ASEAN market,” said Antonino. She added that the four-day activity is also a commemorative celebration of BIMP-EAGA’s 20th this year. BIMP-EAGA was launched in 1994 in Davao City as a key strategy to accelerate social and economic development of less developed areas in participating countries. IMT-GT was formed in 1993 with similar goals of promoting trade, investment, and tourism in less-developed states and provinces in Sumatra, Indonesia, Peninsular Malaysia, and Southern Thailand. Both subregional groups aim to harness private sector leadership in initiatives to promote cross-border investments and improve connectivity.

MinDA Chair Luwalhati Antonino meets with Philippine Ambassador to Malaysia Jose Eduardo Malaya III (middle photo) in Kuala Lumpur, Malaysia during a side event in the 1st BIMP-EAGA and IMT-GT Consumer Fair in Melaka, (above left) which featured the sub-region’s top export products (top right and bottom photos).


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