100roses’s Blog

Just another WordPress.com weblog

Archive for March, 2009

Tribute to Piston leader Medardo Roda on Feb. 14

March 5, 2009 at 2:47 pm · Filed under Jobs/Labor, Poverty

Thursday, 12 February 2009, 19:52 | Category : Events, Movements, Specials
Tags :



Everyone is invited to attend a public tribute in honor of Medardo “Ka Roda” Roda on Feb. 14, 2009, 4:30 pm at the garden of  Bulwagang Bonifacio (SOLAIR), UP Diliman.







From Stuff

Ka Roda was the longtime chair of the transport group Piston, giving a face to our transport workers and fighting with and for them for the longest time. He has since “retired” and has been honored as Piston’s chair emeritus.


He is famous for articulating the demands of transport workers for rollbacks of the prices of oil products, his critique of the oil cartel and the excessive government fees and unfair policies slapped against drivers. Today, Ka Roda is frail and sick. Strokes have affected his body and speech, as you can notice in the way he talks. He looked terribly affected at the wake of his comrade Rep. Crispin Beltran last year:



A highlight of Saturday’s tribute program will be the showing of “Ruta ni Ka Roda”, a film by Kodao Productions which was written, directed and edited by Risa Jopson.


Ka Roda, of course, will be there, together with his family.


The tribute is organized by Kodao Productions in cooperation with Piston.


source:  http://tonyocruz.com/?p=1900


 

Comments

Holding on to an Empty Promise

March 4, 2009 at 8:06 am · Filed under Agriculture, Investing, Jobs/Labor, Poverty and tagged: , , ,

  Print E-mail
Written by Aries Rufo in Butuan City   
Monday, 02 March 2009
Digg!

ImageCaraga re-embraces mining, but the region lacks the infrastructure, manpower, and long-term plans to produce the growth that the industry is expected to bring

Caraga’s flat-line economic activity has lately been showing signs of life, triggered mainly by mining operations.

The Supreme Court’s ruling declaring large-scale mining unconstitutional was like a death sentence to the region, which boasts of a rich history and tradition in mining. In fact, Surigao City in Surigao del Norte is said to have evolved from the operations of two mining companies—the still-active Pacific Cement and the now-closed Nonoc nickel mining.

For four years, Caraga registered a negative growth rate—until the tribunal reversed itself in December 2004.

With the resurgence of mining, the region’s economy is experiencing a renaissance of sorts, notes Carmencita Cochingco, the National Economic and Development Authority’s regional executive director for Caraga. The production value last year from mining hit P6.8 billion, up from P2.1 billion in 2006, representing a sales value of P19.8 billion in 2007 from P1.3 billion in 2006.

The region has been a favorite destination of this extractive industry, hosting at present 15 large-scale mining companies from China, Japan, Hong Kong, and Australia, with eight more in the pipeline. All in all, at least 62 mining companies maintain offices in the region.

Second Poorest

But growth fueled by mining is only one side of the coin, and the variables in the other equation present a different picture. The total outlook on Caraga is not as rosy as it seems.

Caraga is a microcosm of what the Philippines is: abundant in natural resources but also in poverty. Almost half of its two million people live below the poverty line, way above the 33 percent incidence nationwide.

Created through Republic Act 7901 in 1995, the 13-year-old region has yet to realize its full potential. Its Human Development Index ranges from low to very low, indicating that it would not meet its Millennium Development Goals target by 2015, according to its MDG status report.

Based on its regional development plan, Caraga by 2010 is targeted to hit a steady growth rate of 6.74 percent from the present 6 percent. Aside from mining, major industries like tourism, agro-forestry, and fisheries are expected to contribute to its Gross Domestic Regional Product. As of 2006, its GDRP represented only 1.28 percent of the national GDP and 7.24 percent of the Mindanao GDP.

Caraga is the second poorest region in the country, already an improvement from the 2003 poverty survey by the National Statistical Coordination Board which it topped.

Most Peaceful

In most sectors—agri-fishery, industry, manufacturing, construction, trade, and services—its percentage share is either second lowest or lowest among the Mindanao regions. The only bright spots are the mining sector, which is second highest in Mindanao, and forestry, which is highest in the country.

Its macroeconomic forecast for 2010 paints a vibrant picture, with the robust mining activity creating a ripple effect on construction, manufacturing and services sectors, and the trade sub-sector. The industry sector is expected to grow by an average of 11 percent from 2008-2010, by the “recovery of mining, construction and manufacturing.”

It appears, however, that the fundamentals are not in place to support such an optimistic forecast.

Unlike other regions in Mindanao troubled by insurgency and terrorism, Caraga probably has the lowest risk of investment in terms of peace and order and criminality problems. Criminality is low in the region while insurgency and secessionist problems is almost non-existent.

“Caraga is one of the most, peaceful regions in Mindanao, maybe even in the entire Philippines,” says Supt. Nestor Fajura, chief of the regional operations and plans division in Caraga.

No Conflict Spillover

Statistics support this claim. From January to July, Caraga registered a crime volume 62 percent lower than the national average. Most of the cases were non-index crimes involving illegal gambling, logging, and drugs.

The generally peaceful environment however got a jarring jolt last July when a band of communist rebels attacked the municipal police stations of Dapa and General Luna towns in the Siargao Islands, the region’s jewel tourist destination.

Fajura says the incident was an “isolated one” and reports reaching the National Police showed that it was prompted by a landgrabbing case involving a local official and that the perpetrators were from provinces in nearby regions. While there are small pockets of rebels in the region, these are mostly New People’s Army members from the Compostela Valley.

As for threats from the Moro Islamic Liberation Front, Fajura says the group could not gain ground in the region because of the presence of indigenous peoples. “They would have problems with the IPs,” Fajura says.

The threat of a possible spillover of hostilities in the ARMM is also implausible as mountain ranges and the provinces of Misamis Oriental, Bukidnon, and Davao border the region, Fajura adds. Caraga is perched on the northeastern portion of Mindanao.

High Unemployment

But security is only one of the variables for development and, in the case of Caraga, is no assurance for development. As investors continue to favor other regions, employment generation has been sluggish, and exports have been low with the exception of mineral commodities.

Neda’s Conchingco told Newsbreak that, for the entire region, there are only about 25 big business establishments employing 10 or more persons. The Regional Development Council has identified and registered with the Philippine Economic Zone Authority at least five economic zones in Caraga but, so far, there have been no interested locators.“There are no takers,” says Caraga trade and industry regional director Brielgo Pagaran.

Based on 2007 data, of the four major provinces, Agusan del Norte and Surigao del Norte hold the biggest share of investments. However, at the same time, these two provinces registered the biggest decrease in investment generation. In all, there was a 14.8-percent shrinkage in investment, mirrored by a decline in new businesses registered from 5,151 in 2006 to 3,446 in 2007.

The low investment easily translates to low employment figures in the formal sector—that is, those with regular pay. As of January 2008, Caraga had a high employment rate of 95.4 percent, but the figures could be misleading as almost one-fourth of the labor force are underemployed.

Regional director for labor Chona Mantilla says that more than half of Caraga’s labor force is in the informal sector—those who are self-employed or entrepreneurs. “Caraga is still basically an agri-business region,” she noted.

Mismatched Jobs, Skills

Mantilla says the resurgence of mining has perked up employment. In Surigao del Norte, for instance, the center of mining in the region, the industry has created 5,000 jobs, says the province’s planning and development office chief Arturo Cruje.

But Pagaran does not share this rosy view. “Mining is not labor-intensive and the trickle-down effect to employment generation is minimal,” he argues.

Also troubling is the disconnect between labor demand and supply. Residents could not take advantage of the high-paying employment opportunities in mining because of a shortage of skills. “The skills do not match the demand,” Conchingco says.

For instance, the Platinum Groups Metals Corp. operating in Surigao del Norte has announced vacancies for senior mechanics, auto-electricians, licensed civil engineers, communication and development and education officers. But then, non-Caraga residents usually fill up such vacancies, Pagaran says.

The skills mismatch is not confined to technical jobs. Call centers have launched job fairs but could not find right candidates for the job openings, Cochingco says.

Mantilla says they are aware of the skills mismatch and the regional labor office has initiated tie-ups with local colleges and universities and the Technical Education and Skills Development Authority to address the situation. Schools are now offering tourism courses and are encouraged to offer technical and vocational courses to meet the expected labor demand in local tourism and mining. With the lack of employment opportunities, there is also little migration from other regions, which may be good in a way, as the limited resources of local government units are not spread thinly.

Infrastructure Problems

One major factor for the lukewarm investment interest in Caraga that emerged in our interviews was the lack of infrastructure and an efficient logistics system. Interested businessmen we interviewed also cited inadequate infrastructure as a major turn-off.

There are major public works projects, for sure, such as the completed P2.1-billion Diosdado Macapagal Bridge in Butuan City, the P100-million Dinagat Island road, and the P6.3-billion Surigao-Davao Coastal Road that would connect the the two Surigao provinces to Region 11.

But within the region, provinces are still isolated from one other and from neighboring regions, hampering economic integration. For instance, no major road network connects Agusan del Norte and Agusan del Sur to Surigao del Sur. There is also no major road network connecting the two provinces of Agusan to neighboring Bukidnon.

A former member of the Regional Development Council (RDC) told Newsbreak that a proposal to link the Agusan provinces to Surigao del Sur was rejected by local officials there, fearing it could affect the port business in Surigao del Sur (Caraga has two major ports: Nasipit and Surigao). They felt that traders might transport their cargo to Nasipit port in Butuan, which is geographically nearer to Cebu and other provinces in the Visayas.

Protectionist LGUs

“Local officials have yet to shed their protectionist notion. They don’t realize that the purpose of the road network is to interconnect the provinces. We are connected in a roundabout way,” the former RDC official said.

Aside from major road networks, the region also lacks farm-to-market roads, hampering the agri-business industry. Regional director for agriculture Ricardo Regis says this is being addressed.

The underdeveloped transport infrastructure, says Pagaran, slows down the development of Caraga’s agro-business sector, which is concentrated in Agusan del Norte and Agusan del Sur. The two provinces of Agusan have the largest farmlands and forest areas, accounting for the bulk of the region’s agricultural and forest products. (In the RDP plan for Caraga, Surigao del Norte has been identified as the center for mining, tourism, and agri-fishery and Surigao del Sur for mining and agri-forestry.)

A draft economic situationer for Caraga obtained by Newsbreak also identified the lack of transport infrastructure as one major dampener on Caraga’s tourism prospects. “What drives away tourists… is not the peace and order condition. The lack of road networks and facilities tops the list of factors why the region cannot get the big pie of [the tourism] market,” the report said.

Second Nature

Given its limitations and challenges on human resources and its shaky economic fundamentals, what is the prospect for Caraga of transforming into a “super-region” and a major contributor in the country’s economic growth?

The answer is tentative, even doubtful, despite the promise of mining.

Caraga was among the first regions to reembrace large-scale mining. It was as if it had rediscovered the antidote to poverty.

Historically, mining is second nature to Caraga. “People here are very open to mining. Mining has been good to them. They know the economic benefits brought by mining,” said engineer Leonel Santos, the RDC private sector representative.

To be sure, there are those opposed to mining operations but the objections are largely muted. Catholic bishops there, for instance, adopt a less critical view compared with their colleagues in other regions. One bishop was quoted to have said, “If we don’t allow mining, what alternative can you offer to the people?”

In the 1960s and the 1970s, mining, both large-scale and small-scale, was a major source of employment and income for the residents. People recall the time when the Nonoc nickel mining stopped operations in the 1980s, rendering thousands jobless. “Surigao City was like a ghost town,” one resident recalled.

Decline in Investments

ImageThus, when the SC gave the go-signal to mining, it was like infusing new blood to a dying region. Caraga boasts of US$2 billion worth of gold deposits, and has huge deposits of nickel and chromium ores. Half of Mindanao’s mineral deposits is believed to be in Caraga.

In Surigao del Norte alone, it is estimated that 25,000 new jobs from related sectors like tourism and services were generated by the mining boom, says Cruje. Another positive note is the fact that mining companies are required under the law to apportion at least 1 percent of their operational cost for community-related project and services, Cruje adds.

There is a mirage, however, in the luster of mining. Underneath is a symptom of weak economic fundamentals.

The decline in investments, for instance, shows that Caraga’s economy is heavily reliant on mining and betrays the disparity in the economic performances of the Caraga provinces. It could be argued that mining largely triggered the 6 percent GRDP growth of Caraga in 2006, as other traditional sectors like employment, agriculture, forestry, and fisheries suffered a decline in growth.

In the entire region, income and local taxes generated have broken the P2-billion mark for 2007, mainly because of mining operations. But growth appears to be heavily concentrated in Surigao del Norte, due to the fact that 13 of the 15 the mining companies are found there, with more expected to participate.

Abandoned Dev’t Plan

With the promise of mining, development planners and local government officials are now looking to join the bandwagon and set aside other development programs that are more sustainable, Pagaran warns. One indication of this is the increasing number of exploration permits and mineral-production sharing agreements in the region.

Pagaran recalls that shortly after Caraga was formed, its regional development plan was centered on tapping its agro-business productivity and forestry potential through a sustainable program. Caraga has 800,000 hectares of forest area and 600,000 of potential agricultural lands. “It was estimated that we will generate P200 billion in GDRP, to include the value-added output if we process the products,” Pagaran says.

However, due to some constraints, the ambitious plan was abandoned, Pagaran says. “Unlike mining, which is exhaustible, that RDP was sustainable.”

One area aside from mining where Caraga has a huge potential is palm oil production. The region owns 53 percent of the total palm area in the country. There are two processing plants in Agusan del Norte and Agusan del Sur. The increasing worldwide demand for palm has encouraged more oil palm growers. The regions aims to increase its palm oil plantation from 13,000 hectares to 85,000 hectares in 10 years.

In the mad scramble for mining and with the instant gratification it brings to local income, local government units have not mapped out a long-term development program. Pagaran notes. “Although they say the mining industry will last 25 to 50 years, what happens next once the minerals are already exhausted? Our local officials should look beyond that.”

Blessing in Disguise

Of immediate concern is that right local taxes should be imposed and collected from the mining companies and strict monitoring of environmental regulations, Conchingco and Pagaran say. Conchingco says mining should be pursued without sacrificing the environment. For now, environmental degradation and disasters have spared the region. The only instance of a mining disaster occurred in the 1970s in Placer, Surigao del Norte, when a dike for mine tailings from the operations of Manila Mining Corp. collapsed and spilled tailings into the river.

Pagaran says Caraga has not fully benefited from all the supposed economic benefits brought by mining. As it is, the trickle-down effect, especially in employment, is limited since companies merely transport the minerals to other countries for processing. “It would be better if these companies put up processing plants here so more could be employed.”

Others, however, prefer to look at the bright side. Cruje says the entry of mining, if properly managed, could boost tourism. “It is just a matter of balancing environmental concerns and mining.”

The one major obstacle for mining from going full-blast in the region is the tenurial issue raised by indigenous peoples. Caraga is home to five major IPs, and Conchingco says ancestral claims by the IPs have stalled some large-scale undertakings. The tenurial issue has also hampered the development of lands suitable for industrial and agricultural production because of ancestral domain claims.

From another viewpoint, such an obstacle may be a blessing in disguise. With mining, Caraga may be holding on to an empty promise.

source:  http://newsbreak.com.ph/index.php?option=com_content&task=view&id=5886&Itemid=88889377

Comments

Tuna in Transition

March 4, 2009 at 8:04 am · Filed under Agriculture, Investing, Jobs/Labor

  Print E-mail
Written by Edwin G. Espejo in General Santos City   
Monday, 16 February 2009
Digg!

TROUBLED: The tuna industry face challengesTroubles in the global economy catch up with Soccsksargen’s main industry

Once considered a backdoor entrance to the Cotabato region, General Santos City has risen to become one of the key cities in Mindanao. In many respects, it has outpaced its peers. And when one thinks about General Santos—or the neighboring province of Sarangani for that matter—tuna comes to mind.

The tuna industry has been responsible for the vibrancy of Soccsksargen’s economy.

The country produces over 400,000 metric tons of fresh, canned, and processed tuna every year, generating more than US$280 million in annual export revenues. It accounts for 4 percent of the country’s Gross Domestic Product.

General Santos City annually produces 100 to 200 metric tons of fresh yellow fin tuna, which are exported to Japan, the United States, and Europe. The industry directly and indirectly employs 120,000 workers.

But these figures belie the gloomy outlook of the industry.

Recent developments in the world economy have caught up with the business of catching, storing, and canning tuna. They threaten the growth of not only General Santos, but of the neighboring provinces as well.

The tuna industry, which is export-oriented, has naturally fallen prey to the surging costs of fuel. Worse, the waters in which fishermen can catch tuna have become limited, considerably decreasing the industry’s output. Stiffer competition from countries that are also in the business of catching, canning, and exporting tuna has not helped either.

The industry is not yet in panic mode, but it is raising the alarm due to rising fuel costs. “We are raising this alarm because the volume of landed catch has dramatically declined in the first semester of this year,” said South Cotabato Boat Owner and Tuna Association president Domingo Teng.

Fuel costs alone eat up 45 to 75 percent of the production overhead, depending on the engine, size, and make of the ship, according to Jerry Damalerio of Damalerio Fishing.

Richie Rich Tan, vice president for operations of San Andres Fishing Industries Inc. (SAFI), said that their company consumed about 600,000 liters of diesel and gasoline products per month before the fuel crisis. SAFI owns several of the more than 70 registered large purse seine ships, which have over 100 service boats among them. (There are also a number of small- and medium-sized purse seine owners that account for 750 more fishing vessels. These numbers exclude the tuna handline fishing vessels, which number close to 4,000.)

Many vessels have been grounded, further reducing the amount of fish caught.

Even as oil prices have recently gone below $100 per barrel, tuna industry stalwarts have proposed a number of measures aimed at mitigating the negative effects of the sharp increases in the price of fuel commodities. For one, big tuna producers and small fisherfolk here are asking the government to extend a P5-per-liter discount on petroleum products to keep the tuna industry from collapsing.

The volume of catch from January to June has dropped by 34 percent, year-on-year. The output for 2007 also paled in comparison to the year before that. Industry players pointed to the increase in global temperatures as the culprit for the decline in 2007.

If tuna producers are granted a discount of P5 per liter on fuel products, the industry could save as much as P1.2 billion in operating costs in one year.

The tuna producers are also looking into directly importing and supplying the fuel needs of the vessels, according to some industry insiders. However, some oil companies have shot down the idea. Officers of an oil company operating in General Santos said that while they welcome the move to allow tuna producers to import their own fuel requirements, they doubt if it will be viable from the standpoint of business.

In a deregulated environment such as ours, the tuna producers’ idea is possible. There is a downside, however: the tuna industry “will have to put up their own depot facilities and distribution network,” said a marketing official of a big oil company, who requested anonymity due to lack of authority to speak on behalf of the company and the oil industry.

The same marketing official said that if tuna producers are allowed to import fuel, they should be made to also pay the corresponding taxes and import duties that all oil companies are paying the government. The same market forces that govern oil companies should govern tuna producers as well.

Oil companies are understandably threatened. They stand to lose a major share of the market if producers can independently import their fuel requirements. Bureau of Fisheries and Aquatic Resources (BFAR) director Malcolm Sarmiento said that the tuna industry consumes between 18 and 20 million liters of petroleum products a month, making it the single largest consumer of fuel products in the whole of Soccsksargen region.

But there’s a flipside to the issue of rising fuel costs. Japan, another major player in the tuna market, recently announced the suspension of its tuna fishing operations. As of August 1, all its 233 member vessels have suspended operations.

ImageMasahiro Ishikawa, president of Japan Tuna Fisheries Cooperative Association (Tuna Japan), said that they “cannot make profit at all from fishing operations because of the prohibitively high fuel prices.” The suspension will run from two months to two years, according to Infofish Trade News.

The Japanese decision drove up the prices of Philippine yellow fin tuna to record levels this year. Local landed price of sashimi-grade yellow fin tuna reached P350 per kilo at the General Santos City Fish Port complex immediately after Japan made the announcement. In lean months, yellow fin tuna goes for as high as P250 per kilo (usually during the months of July to early November); when in abundance, it can go for as low as P180.

This rise in prices may help the local industry temporarily, but many players are saying that not all stakeholders can take advantage of the increase because of the prohibitive price of fuel. So far, many local fishermen have had to stay at home, severely affecting the livelihood of some 50,000 residents in General Santos who are dependent on the tuna industry.

The shortage in fisherfolk catching and hauling tuna has left some companies without tuna to can. Canneries, such as Philbest, have resorted into importing frozen tuna to keep up with its export supply contracts in the US and Europe.

The problem of not being able to catch and haul tuna is not exclusive to the small fisherfolk. For big operators, the high cost of fuel simply means that their ships cannot sail into the high seas. “Fewer vessels going out to the high seas means less catch,” Teng said. These ships have to sail far in order to catch the tuna in their natural migratory avenues.

But going out to the high seas isn’t as simple as it used to be. Before 2006, Filipino companies or small fisherfolk were able to venture into the overlapping exclusive economic zones (EEZ) of Indonesia and the Philippines in the Sulawesi Sea.

Today, that is no longer the case. Since the expiration of the bilateral agreement between the two countries, the Philippine government has been having problems in setting up an arrangement with Indonesia. The termination of the agreement has been blamed as one of the causes of declining tuna catch landed at the General Santos City Fish Port complex.

It appears that it is not only with the Spratly Islands that the government has to concern itself when it comes to the delineation of the national baseline and the EEZ. Tuna fishing fleet operators are asking the Philippine government to immediately delineate the country’s territorial waters to protect fishermen from being apprehended in traditional fishing grounds, which they share with neighboring countries in Southeast Asia. “We have a deadline to meet on May 9 next year to define our territorial waters,” Teng said.

Not only that, there appears to have been a mix-up in the payment of membership dues to the Western and Central Pacific Fisheries Commission (WCPFC). Teng said the Philippines had been prevented from fully participating in policy discussions due to its failure to pay its annual dues.

This, however, has been remedied by the government. Agriculture Undersecretary Jesus Emmanuel Paras said the Department of Agriculture, through the BFAR, has assumed the payment of required WCPFC fees, which the government reportedly thought should be covered by the private sector.

The WCPFC has both binding and nonbinding powers over its 26 member countries and eight participating territories in the Western and Central Pacific Region. The governing body defines regulations in managing international fishing grounds in the region.

Among the measures adopted by the commission was the identification and subsequent authorization of fishing vessels operating in the area. The Philippines is also committed, under another WCPFC measure, to the conservation and management of big eye and yellow fin tuna in the Central and Western Pacific Region.

Paras said that despite the many problems that the tuna industry has to deal with, the government is confident it will weather the storm. “There is reason to remain bullish on the future of the tuna industry.”

The story isn’t that bad when compared to other major tuna-exporting countries such as Thailand, where canneries have started to close shop. So far, this hasn’t happened in the Philippines.

He said the Arroyo government has been addressing the clamor for wider access to more fishing grounds for the country’s tuna fishermen and purse seine operators.

“Our government has recently signed a bilateral fishing agreement with Timor Leste,” he told some 250 delegates attending the annual tuna conference.

According to him, efforts to forge similar arrangements with the governments of Palau, Solomon Islands, Papua New Guinea, Marshall Islands, and Kiribati are ongoing. More immediately, measures that will address high fuel costs have to be in place if our tuna industry has to sail again toward distant seas.

source:  http://newsbreak.com.ph/index.php?option=com_content&task=view&id=5853&Itemid=88889377

Comments

The Price of Progress

March 4, 2009 at 8:01 am · Filed under Agriculture, Investing, Jobs/Labor, Poverty, Technology, training and tagged: , , ,

“It’s an irony that we have gold in the province, yet the local government is not getting any of the revenues from mining,” said Uy, who has been in public office for the last nine years. The province is literally sitting on a pot of gold and yet the people here remain poor. Compostela Valley and Davao Oriental, the sites of some of the world’s biggest deposits of gold and nickel, have the highest incidence of poverty in the region.

The Price of Progress Print E-mail
Written by Germelina A. Lacorte in Davao City   
Monday, 02 February 2009
Digg!

DOLLAR EARNER: The Davao Region continues to rely on its plantations, notably of bananas, its top performing crop.In the last three years that the Davao Region surpassed its economic targets, the number of poor people increased. Where did it go wrong?

Get hired before August 8 and get a P10,000 signing bonus,” declares a streamer posted by Concentrix, a call-center company at Damosa Park along Bajada in Davao City. Two blocks away, construction workers work doubletime on the new Robinson’s Cybergate, a mall that will feature a 5,000-square-meter IT park on its second floor once it’s finished early next year. Farther down the road, just a stone’s throw away from the city’s Victoria Plaza mall, heavy equipment is laying the foundations on the marshy ground for the development of a sprawling Ayala Center mall and IT Park.

“There’s no stopping BPOs in Davao City,” says Lizabel Holganza, chair of the Davao ICT Council. From only one call center in 2003, nine are already operating here and more are coming. “They’re very bullish. BPO investors believe Davao can deliver.”

In the Davao region’s medium-term regional development plan, ICT has been among the four leading industries targeted to spur economic activities in the region that, according to NEDA, aspires to become the country’s most livable by 2010.

Of the 10,000 ICT jobs targeted in the region for the period, close to 4,000 have materialized, most of them in Davao City, the anchor of the region’s ICT program and part of the fast emerging cyber-service corridor running from Luzon to Mindanao that will eventually serve as the country’s call center backbone.

Davao City is considered the hub of the region that includes seven cities and the provinces of Davao del Sur, Davao Oriental, Davao del Norte, and Compostela Valley.

Since Asiaweek cited it among Asia’s most livable in 1997, Davao City’s reputation stuck. Businesses coming here expect quality of life on top of the usual amenities of an urban center.

The entire region wants to follow suit. But how to turn a region, where 31 percent of the people live below the poverty line, into the country’s most livable?

Regional planners aim to reduce poverty to only 20 percent by 2010, banking on four leading industries that they believe can create more jobs: agriculture, ecotourism, mining, and ICT.

Consumer-Driven

Holganza said the vast local pool of untapped English-speaking talents continues to attract call center firms to Davao City.

The Asian Institute of Management (AIM) has consistently cited the city as the place where the cost of doing business is lower than other parts of the country. Salary rates for call center agents in Davao are also much lower than those in Metro Manila.

Robinsons and the Ayala Center are only two of the latest property development projects seeking local government incentives this year, according to Roberto Teo, head of the Davao City Investment Promotion Center (DCIPC).

Most of these investments, however, are consumer-driven, said Nicanor Agustin, NEDA regional director. The region needs to attract more investments in industries.

The Davao region posted P57.8 billion in total gross regional domestic product (GRDP) last year, contributing 4.5 percent to the country’s GDP.

Turning to Mining

This growth has been fueled mainly by services. The sluggish and erratic growth of agriculture has forced regional planners to turn increasingly to mining for better growth prospects.

A flurry of activities in mining pushed the region’s growth last year, exceeding medium term targets.

Extracting mainly gold, mining posted a growth of 9.6 percent from a negative 20.6 percent in 2006, boosting the growth of the Davao region to 6.7 percent from only 4.3 per cent in 2006. This growth rate exceeded the average six-year target of 5.7 percent in the regional development plan.

Growth in services, which make up 42 percent of the region’s GRDP, was pegged at 5.9 percent, a slight drop from the 6.4 percent in 2006 because of a slowdown in trade, real estate, and government services.

Agriculture, which makes up 28 percent of the gross regional domestic product, posted the highest growth of 7.2 percent in 2004, but plunged to only 2.6 percent in 2005, moving slightly up to 3.1 percent in 2006 before dipping down again to 2.1 percent last year.

Northern Mindanao, which posted a 7.9 percent growth last year, has overtaken Davao for the first time, according to Dr. Edmundo Prantilla, an economics lecturer at the University of Southeastern Philippines (USEP). “That region has a lot of the flourishing industries that we don’t have,” Agustin added.

Prantilla noted that while Davao has always been considered Mindanao’s top performing region, its continued reliance on agriculture has slowed it down, compared to the vibrant manufacturing industries of Northern Mindanao. He said Davao should use the latest technology to boost agricultural production which seems to have reached a plateau.

Biggest Asset

On the other hand, Agustin sees mining as the last hope for the Davao region to boost its economy. “There seems to be no way to get out of the rut except through mining. If mining can soar, the performance of the region will be Number One in the Philippines. Now we’re Number Six but we can easily slide down to Number Seven.”

He said, however, that the region should encourage only “responsible” mining, which means that only big companies who can afford to “take care of the environment” should be allowed to operate. He said that environmental costs will be very prohibitive for small miners, who make up a large number of those engaged in mining in the provinces.

Eighty-eight kilometers north of Davao City, in Nabunturan town, an 18-karat gold ring, mounted and encased in a glass case, sits conspicuously in the lobby of the Compostela Valley capitol.

Gov. Arturo “Chiongkee” Uy, who could barely hold it in the palm of his hand, launched the 1.5-kilogram gold ring during the March 8 Bulawan Festival, on the 10th founding year of the gold-rich province. It was the biggest gold ring in the country, a symbol of the province’s biggest asset, which is its huge gold deposits, according to Uy.

The first-term governor wants to transform his province into a jewelry-making center. But at the moment, the measly revenues the province has been getting from mining have been a cause for dismay.

Region’s Poorest

“It’s an irony that we have gold in the province, yet the local government is not getting any of the revenues from mining,” said Uy, who has been in public office for the last nine years.

The province is literally sitting on a pot of gold and yet the people here remain poor.

Compostela Valley and Davao Oriental, the sites of some of the world’s biggest deposits of gold and nickel, have the highest incidence of poverty in the region.

According to the Mines and GeoSciences Bureau, the Davao region is one of the top five gold regions in the country. MGB estimated the metallic mineral reserves in Davao region to include 44.8 million metric tons of gold, 363.6 million metric tons of copper, mostly concentrated in Compostela Valley, and some 475.7 million metric tons of nickel in Davao Oriental.

Uy is also trying to entice mining investors from China to put up processing plants in Compostela Valley, which also showed some deposits of chromite and silica.

Four large-scale mineral development projects in Davao region could attract foreign direct investments of up to US$1.73 billion and create some 9,500 direct and indirect jobs, with potential annual revenues of US$654 million.

Wary

Small miners coughed out 15 percent of their gross to the Philippine Mining Development Corporation (PMDC), which promptly turned it over to the national treasury in Manila. But the province, which is supposed to share 1 percent of those revenues with the town and the barangay where gold was extracted, has not been getting its share, said Uy.

SASA PORT: High freight rates continue to dampen exports.Compostela Valley is now revising its tax code to extract revenues from mining while lobbying to increase share from existing 1 to 5 percent. He said the province will increase its revenues tenfold if it is able to set up checkpoints in the mountainous mining areas for environment taxes and ore transport permits from miners.

Some local government units in the region, however, are wary about mining. Davao City, for instance, shuns mining outright. Wendel Avisado, the city administrator and executive director of the Davao Integrated Development Plan (DIDP), said the city refused to identify mining among its priority industries despite the gold potentials of some of its areas because it will destroy the environment and affect the quality of life of the people.

“The fact that it is extractive means that it is destructive,” Avisado said. “No amount of responsible mining will prevent it from destroying the environment. In fact, people are often left without any other means of income after the whole mountains are reduced to waste. Mining investors only take advantage of the profit they get, and then run away,” he said.

Easy Money

In Davao Oriental, which has been one of Mindanao’s last frontiers because of its remaining forest cover, Governor Cora Malanyaon said she is not really that hot about mining. “But it is there and it is legal. We can’t do anything to stop it,” she told Newsbreak.

Environment activists have opposed mining in Mati’s barangay Macambol, for instance, because it will threaten two protected areas, nearby: Mt. Hamiguitan and Pujada Bay. Activists said the jobs brought about by mining could not compensate for the communities that will be displaced and villagers who will lose their capacity to produce their own crops.

Uy said Compostela Valley has always been a “mining town,” where mining could be an easy way out to create jobs because there are still enough lands for food production. “We haven’t come to a point yet where we need to choose one over the other. There are still lots of space to expand.”

“We sit on a mining belt,” echoed Avisado, “So, for those who want easy money, they can go into mining. But there’s always a price to pay for it. This activity will definitely destroy the environment. You can’t see it now, but the generations to come will suffer from the greed of our own generation.”

“I’ve been telling people to discard the getrich-quick mentality,” Malanyaon said. “We have land, as our greatest resource, and so, let us focus more on agriculture, planting food that we need and crops that have ready markets.”

Agri for Growth

The Davao Region, however, is still dependent on agriculture. Of the eight industry clusters identified to spur growth in the region, five of them are agriculture (and aquaculture) crops: bananas, wood, mangoes, coconuts, and seaweed.

Fresh bananas, pineapples, coconuts, and their by-products make up the bulk of exports in the region, so that, in the industry cluster plan, the region still expects much from banana and the wood industries to provide most of the jobs.

In fact, jobs expected from the ICT sector is minuscule compared to close to 300,000 jobs targeted to be created by the banana and wood sectors by 2010.

Of the 150,000 jobs expected from the banana industry, only 27,000 were actually delivered. The region, however, is offering some 18,389 proposed expansion areas for more banana plantations.

As the region’s chief export, the banana industry is looking to attract P1.1 billion worth of investments and to rake in $4.5 billion worth of exports by the end of the medium term. But like the wood sector, which is still reeling from the effects of the total log ban, it has failed to deliver the expected jobs.

LGUs Remiss

Agriculture has remained in a slump and failed to kick off because of built-in weaknesses that remain unaddressed. Businesses continue to gripe about high freight rates and other problems, which continue to dampen interest in agricultural exports and agro-processing in the region.

Local businessmen blame this on the Cabotage Law, which prohibits vessels from transporting cargo between two domestic ports other than those designated international ports.

But aside from that, Agustin said, the local government has also failed to lead the way. He said it’s not enough to identify investment priority areas and offer local incentives. The government should also put up infrastructure and support facilities.

One of the concerns that have dampened agricultural exports is the lack of a food storage terminal that could extend the shelf life of agricultural goods before they are shipped to markets. “As much as 50 percent of fresh farm produce rot along the wayside, which could have been prevented if we had a food terminal,” said Agustin.

Its nearness to big international ports and air cargo services would have made Davao City ideal for this facility. The city has, in fact, identified a 16-hectare site in Toril but failed to promote the idea to possible private investors, so that the identified site lay untapped for years.

Tagum’s Initiative

Now Tagum City is putting up its own food terminal, through a loan facility it could get easily, either from the Land Bank or the Development Bank of the Philippines. The food terminal facility will feature not only a refrigerated storage area, where fresh farm produce can be stored while waiting to be shipped outside, but also a food exchange facility (where to market some of these goods) and a research and development laboratory for product upgrading.

But on top of these, agro processing and more value-added to the region’s agriculture exports should be encouraged, said Virgilio Leyretana, chair of the Mindanao Economic Development Council (Medco). “We should stop thinking of ourselves as a mere food bowl,” he said, referring not only to the Davao region but also to the whole of Mindanao.

Regional planners believe that by increasing growth in the economy, in industries that will create jobs, they will automatically improve the quality of life and reduce poverty in the region. This did not prove to be true.

The region exceeded its economic target in the last three years but the number of poor people in the region also increased. Estimates of the National Statistical Coordination Board (NSCB) pegged a million more poor people in the region in 2006 compared to those in 2003.

Didn’t Trickle Down

Even the NSCB itself conceded that the figures imply that government’s poverty alleviation efforts failed to reach the poor.

Latest NSCB estimates show that a family of five in the Davao region needed at least P6,290 to meet their basic needs in 2007. A sole wage earner in the region needs to earn P207 a day to bring his or her entire family above the poverty line.

Although daily minimum wage in the region increased to P230 for agricultural workers and P240 for non-agricultural workers, these existing workers’ wages are only slightly above the survival level of families.

“This could only mean that the income stayed at the level of the industry and did not really trickle down to benefit the families,” explained Agustin.

Of the 745,995 jobs targeted within the six-year period, only 104,000 jobs have been created so far.

Mining is looking to attract 30,000 jobs, but so far only 4,548 mining jobs have been created in the Davao region.

Pollution Feared

NEDA’s midterm assessment report also pointed out other threats to the environment that could affect the region’s quality of life.

Although air quality in the cities is still generally good, there’s a prevailing fear that the coming of new industries will increase pollution. Even the coastal waters in the Davao Gulf have already shown signs of strain.

In 2002, there were 228 industries in the region classified as hazardous. Of the 315 firms in the region that could pollute the water, only 230 had water pollution control devices, while 85 firms that did not have them were still allowed to do business.

Timber cutting, on the other hand, has been rapidly destroying forests at alarming levels and the diminishing forests have been blamed for the increasing poverty in the uplands. Malanyaon said the lifting of the total log ban in her province also made it very difficult for authorities to apprehend illegal loggers.

Although Hedcor’s hydropower plant in Santa Cruz, Davao del Sur, registered one of the biggest single investments in 2005, some sectors raise the possibility that it might dry up one of the city’s main water sources, the Panigan River.

Other indicators, such as the rising infant and maternal mortality, the declining cohort survival rate in the region’s elementary education, and access to potable water to at least a third of the region’s barangays also point to the fact that the bustling Davao region, despite all its potentials for growth, still has so much work to do before it can rightly become the country’s most livable region.

source:  http://newsbreak.com.ph/index.php?option=com_content&task=view&id=5834&Itemid=88889377

Comments