Anda di halaman 1dari 80

The 2008 PBD Yearbook I 

DBP Yearbook Inside Rev3 (Final)1 1 12/22/08 5:23:35 PM


3“Super-sizing”
the regions
Luzon Urban
14 Beltway
3 ‘Super-sizing’ the regions
6 North Luzon Agribusiness Quadrangle:
Feeding the nation is big business

14 Luzon Urban Beltway:


Keeping the country’s main arteries healthy

24 Central Philippines:
A tourist haven

38 Agribusiness Mindanao:
24 Central Agribusiness
Making the promise a reality Philippines 38 Mindanao

50 The bright lights of the “ Cyber Corridor”

54 The Rice Crisis:


Staving off starvation and
instability
60 Tourism estates rake it in
62 Kapitan’s City

64 From malls to resort town

54 The Rice From malls


66 Ayala’s magic now extends to resorts Crisis 64 to resort town

68 Pagcor’s $20B Las Vegas dream

70 A tale of three cities


Boom town

The greening of Makati

Quezon City’s Triangle Park

72 Business inflation forecasts


for the second Pagcor’s $20B Making sense of
and third quarter 68
Las Vegas dream
74 the triple bottom
line
Sidebar: Measuring inflation expectations

74 Making sense of the triple


bottom line
76 A vested interest in coffee
76 Green banking
80 Bankers turned volunteers

Some photos taken by Revoli Cortez

The 2008 Philippine Business and Development Yearbook is published by


Melison Media Enterprises with postal address at 1-34 Santor, Malolos, Bulacan.
All rights reserved with Philippine ISSN 1908-9473

DBP Yearbook Inside Rev3 (Final)2 2 12/22/08 5:23:42 PM


President Arroyo’s State of the Nation Address
‘Supersizing’ the regions
By Ma. Salve Duplito

OF ALL OF ASIA’S CHILDREN, the advancement that’s sizzling enough for both hoped for as a defining moment. “And finally,
Philippines through the years has remained international and domestic investors. After Phase Three: to invest in the natural advantages
some sort of a sleepy, laid-back child that all, in this day and age, a respectable growth and natural resources of each section of our
visitors look at with mild interest, but pass rate and “nice” smiling people will not cut it. nation so that, when harnessed together, the
over so they can exclaim with oohs and ahhs The game has gone up many, many notches major economic regions of the nation are larger
over neighbors China, Japan, Hong Kong, and there are compelling choices everywhere than the sum of its parts.”
Singapore, and now even Vietnam. Don’t be especially in Asia. Making a physically
misled. It’s not that the Philippines is the ugly fragmented nation move in step—together—is Native strengths
one in the brood. But the puzzle is that while it no easy feat.
doesn’t get many negative reviews, it doesn’t Arroyo gave those who were listening a tour
get rave ones either. It is more or less ignored. On July 24, 2006 during the third regular of five new “super regions” built around each
session of the 13th Congress, President Gloria area’s native strengths. As if showing off
Anybody intimate with Asia knows that Macapagal-Arroyo showed the world what her her intimate knowledge of the country she
the country’s English-speaking and skilled background in economics has taught her about governed, she described a long list of hidden
labor force is sought after worldwide as how to push economies ahead: competitive nooks and crannies in these super regions and
senior managers and workers, that royalty advantage. commended local executives overseeing these
and Hollywood personas beat the paths to its dots on the Philippine map—even those where
pristine beaches, and that its mineral deposits “Our three-part plan is moving. First, to the political opposition ruled.
pull in the biggest miners in the world. recover from our decades of debt and lack of
funds, to equitably share income to the people “We will bring Masbate and Biliran into the
That’s just to name a few of its attractions. and to invest in health, education and jobs that RORO (roll-on, roll-off) Eastern Nautical
Another is that the government has an avowed they need,” the President told the nation in her Highway from Surigao through Leyte through
policy to bring an economy of more than 7,000 State of the Nation Address. Naval and Maripipi in Biliran through
islands and a people of deeply diverse cultural Esperanza, Aroroy and Burias Island in
backgrounds to the next level of economic Then she reached for what was obviously Masbate and on to Bicol. The much-awaited

The 2008 PBD Yearbook I 

DBP Yearbook Inside Rev3 (Final)3 3 12/22/08 5:23:44 PM


10-megawatt generator set arrived in Masbate however, will need a macroeconomic mindset
last Saturday. It is ready to power up the to make sure that the master plan will not
province before the end of the month,” was create random pockets of infrastructure marvel.
just one of her commitments during her 2006
SONA. “These projects are planned and implemented
to support and complement each other such
Her vision and messages were simple and as roads that will bring commuters from

Willy Arcilla, president of Business Mentors Inc.


clear: let’s focus on our economic strengths. the rural areas to ports and airports that will
We now have the funds, so let’s build the connect to markets in urban centers. This way,
roads and bridges that will help businesses development gets to reach more Filipinos
thrive. The President is convinced that the across the country,” it says.
newly created super regions will bring the
Philippines to the cusp of economic glory and To prove to critics that the plan does not
recognition—no later than 2010. contain empty promises, the executive order
also spelled out how these are to be financed:
Through Executive Order 561 signed less by revenues from tax reforms, government-
than a month after her closely-guarded SONA owned and controlled corporations, and
announcement, Arroyo made commitments to government financial institutions as well
construct a slew of hard infrastructure projects as from partnerships and other support
that would require more than P1 trillion in from private sector and from bilateral and
investments for five super regions, namely: multilateral donors.
the North Luzon Agribusiness Quadrangle, the
Luzon Urban Beltway, Central Philippines, While the newly created super regions do not
Agribusiness Mindanao and the Cyber mess with existing political boundaries nor Secretary Joseph Ace Durano as its point
Corridor, which traverses all the four other alter regional development councils already person;
regions from Baguio to Cebu to Davao. defined by law, they give e local executives
marching orders to focus on certain primary, • Agribusiness Mindanao, to be composed
“The Super Region development concept aims although not exclusive, development themes: of Regions IX, X except Camigiun, XI,
to spread development across a larger area, XII, Caraga except Siargao, and the
through economies of scale, synergies and • The Northern Luzon Agribusiness Autonomous Region of Muslim Mindanao
complementation. Considering the country’s Quadrangle consisting of regions I, II, the as the country’s typhoon-free food bowl
limited resources, the Super Region aims to Cordillera Administrative Region (CAR), was also designated to be an agribusiness
maximize returns on government investments and the northern part of the provinces of super region; and
by putting resources in programs and projects Aurora (north of Baler), Tarlac (north
that will develop the natural competitive of Tarlac City), Nueva Ecija (north of • Cyber Corridor, which traverses the above
advantages of the country, regardless of Cabanatuan City), and Zambales (north super regions from Baguio to Cebu to
political boundaries,” a copy of an official of Subic) to maximize its strengths in Davao, is envisioned to be competitive
document brief from the National Economic agribusiness. Arroyo appointed then- in information and communication
Development Authority (NEDA) explains. Project Management Staff Arthur Yap technology and knowledge economy,
(now Agriculture Secretary) to be the with Commission on Information and
The planning agency is currently in the process “development champion” for the region; Communication Technology Chairman
of drafting a new Medium-Term Public Ramon Sales as its development champion.
Investment Program wrapped around the entire • Luzon Urban Beltway, which starts from
concept of the super regions. the National Capital Region (NCR), As of May 2008, the government’s
to Region IV-A, and encompasses the achievement report reads like a shopping list
Growth in the Philippines has been grossly provinces of Bulacan, Bataan, Pampanga, of huge infrastructure projects: 20 projects
skewed towards Metro Manila, with Southern Mindoro, Marinduque, as well as the announced during the 2006 and 2007 SONA
Luzon accounting for almost half of the southern parts of the provinces of Tarlac, completed, and these include 12 roll-on, roll-
country’s economic activity while other Zambales, Aurora and Nueva Ecija as a off ports, two airports, two roads, a bridge, two
regions, especially Mindanao in the south, globally competitive industrial and service power projects, and a cold chain.
languish in poverty. Arroyo’s wants her super center, to be championed by the Subic-
region strategy to distribute development and Clark Alliance for Development chairman Eighty-two more are being constructed, 30 of
take advantage of Philippines Inc., minus Edgardo Pamintuan; which should be completed by the end of this
Manila’s sleeping potentials. year, while 47 projects are still in the pipeline.
• Central Philippines composed of Regions
“Guided by economies of scale, the V, VI, VII, and VIII, and the provinces Workable plan
government is investing in mega projects such of Romblon, Palawan, and Camiguin,
as major irrigation projects, railways and road and the Island of Siargao to maximize With 2010 fast approaching, the question,
trunklines that will benefit a greater number the potential of beaches, caves, and other however, remains. Can it be done? Will the
of people,” the document states. The idea, natural resources for tourism, with Tourism reorganization of the regions, like moving

The 2008 PBD Yearbook I 

DBP Yearbook Inside Rev3 (Final)4 4 12/22/08 5:23:46 PM


chess pieces on an economic board, bring
in the elusive development so crucial for
the Philippines to be among Asia’s exciting As of May 2008, the
investment destinations? Will growth be
equitably distributed? The desired outcome government’s achievement
cannot be easily faked: growth in investments,
a vibrant economy singing just the right tunes, report reads like a shopping
higher purchasing power among Filipinos,
and that coveted membership in “Asia’s Tiger list of huge infrastructure
Economy” club.
projects: 20 projects
AgriNurture (ANI) president Antonio Tiu, who
operates a P4-billion nationwide agribusiness announced during the 2006
company, says the economics of the plan is
fairly straightforward: a focused and strategic and 2007 State of the Nation
approach makes good sense whether in
business or governance. Economies of scale Addresses completed, and
will allow the government to take advantage
of each super region’s competitive advantage. these include 12 roll-on, roll-
Commitment, funding and coordination are
crucial, and a plan that can deliver all of these off ports, two airports, two
should work.
roads, a bridge, two power
Tiu’s biggest problem is speed. The
government is not moving as quickly as it projects, and a cold chain.
should, he says.
Eighty-two more are being
“As with all plans Filipinos make, the idea of
the super regions when I first heard it makes constructed, 30 of which
sense. But the implementation is always the
problem. We are moving too slowly,” he says. should be completed by
As a businessman who has taken on himself to the end of this year, while
feed a whole nation with nutritious vegetables,
and who wants to be a regional player in the 47 projects are still in the
Asian region, Tiu has decided not to wait for
the government. ANI has constructed its own pipeline.
facilities that can process tons of vegetables
and fruits per day. He beats on the doors of
government agencies like the Department of opportunities and the best tourist spots in workers, income equality and even hotel rooms
Agriculture to propose projects. His latest: a Asia. It will be such a pleasure to market the and toilets for the tourism sector.
P10-budget viand or ulam for Manila workers. Philippines,” says Arcilla, who has organized
He networks and brainstorms with government numerous trade missions. “We need to solve these things and then
officials on how to distribute vegetables from business will come in. They cannot afford not
the North more efficiently to Luzon. However, “The basics all have to be there first. We to. The Philippines offers great opportunities
while he and the private sector can do their already have a sizable market because we for investors,” says Arcilla.
part, Tiu says the long wait for more effective are the 12th biggest populous country in the
coordination between local government world but our purchasing capacity is still low Businessmen love to tell the story of the slipper
officials take its toll on investors’ ardor. because of high poverty. We offer an excellent salesman who went to a certain town and found
gateway to the ASEAN region which will soon that more than half of the people he met were
A pity, because the Philippines itself as a be economically integrated, but we have a host barefoot. While most would think that he better
product is an exciting item to sell, says Willy of other problems that we need to take care of skip town to sell slippers somewhere else, this
Arcilla, a marketing expert and president of first,” Arcilla says. salesman was beside himself thinking: “Think
Business Mentors Inc. Arcilla says if he were of all the slippers I can sell in this place.”
to market the Philippines, he would have an Arcilla is talking about a menu of conditions
easy time with all its attractions. that investors require before they bring in their The fact that the Philippines may not get much
money: low-cost production base, cheap food, rave reviews now, in this respect, can make
“We have fertile lands, the best tuna grounds low tax rate (instead of mere fiscal incentives), it a ripe investment destination for investors
in General Santos, sardines in Zamboanga, speed and ease of setting up businesses, good who see a slipper-less foot as a ripe business
good lumber in our forests, golden mining education facilities for training of more skilled opportunity.

The 2008 PBD Yearbook I 

DBP Yearbook Inside Rev3 (Final)5 5 12/22/08 5:23:47 PM


North Luzon
Agribusiness
Quadrangle

Feeding
the nation
is big
business
EVERY OTHER WEEK, 33-year old mother Administrative Region (CAR), Regions 1, 2 to projects in post-harvest facilities, especially
and career woman Jenny Angoluan asks her and parts of Region 3, with temperate climate for Region II; flood control structures for
husband to drive her and some of her mommy suitable for different kinds of crops including the Cagayan River; processing facilities for
friends to well-known vegetable “bagsakan” traditional high value tropical ones, potentials corn, highland vegetable farming, silkworm
Balintawak market in Quezon City where they for mineral development, historical, cultural culture, demonstration farms for giant bamboo
buy fresh vegetables at a fourth of prices on and ecotourism sites, river basins in the major and mushroom production, and livestock
supermarket shelves. rice-producing areas in Ilocos, Cagayan development for sheep, carabao and poultry.
Valley and Nueva Ecija, as well as aquamarine
Never mind that she ends her marketing around potentials in the Batanes islands and coastal Looking for incentives and places to hatch
11 p.m. and has to wear boots, especially on areas in the west. a modern agribusiness company? There are
rainy days to protect herself from Balintawak’s pockets of industrial areas in NLAQ that can
muddy enclaves. She makes the extra effort There are 10.2 billion people living in this anchor the modernization of this agriculture
to feed her family of five with fresh produce super region as of the government’s official basket, namely the existing and designated
straight from Benguet and other parts of North 2000 population survey and growing steadily special economic zones of Baguio City, Poro
Luzon. every year. However, only six provinces have Point in La Union, and two in Cagayan, which
a poverty incidence level lower than the 33% are ready for occupancy but are not yet fully
For the longest time, North Luzon has been national average. The population needed used.
the “pinakbet with rice” region of the country, around 50,000 housing units in 2005.
says journalist Tony Lopez: Benguet is already Marine and fishery areas also abound in
the vegetable capital of the nation, Cagayan Last June 19, 2007, the President launched the NLAQ. In 2003, the Ilocos Region was the
Valley and Nueva Ecija are rice granaries, and NLAQ at the Isabela Hotel in Jones, Isabela, a largest producer of milkfish in the country,
the west cost of Luzon and Batanes are rich in symbolic act to reach out to local government amounting to 8,000 metric tons or 67% of total
aquamarine resources. Feeding a nation, or at officials and to urge them to use her “super marine production. It also had the third largest
least Luzon, is big business. The only problem region” plan to spur development. Governors milkfish catch from aquaculture of 39,000
is infrastructure. and mayors from the Cagayan Valley, Ilocos metric tons.
and Cordillera Regions were given time to
Transporting goods from farms and processing raise their concerns. North Luzon also has potentials for
plants to Metro Manila is a costly headache to mariculture, particularly for oyster production.
agribusinesses. The results are tons of wastage The idea is to bring the super region to a Its production (oysters, mussels, and seaweeds)
at the producer level and expensive goods at production level that would supply cheap and in 2003 was 3,195 metric tons, representing 3%
the consumer level. fresh food not just to Luzon’s burgeoning of the total. Mariculture zones are located in
population, but also export these to nearby Badoc and Pagudpud (Ilocos Norte); Balaoan
This should all change if the grand plan Southern China, Taiwan, Japan, Hong Kong and Sto. Tomas (La Union); and Dasol and
encapsulated in the creation of the North Luzon and Korea, which are just a few hours away by Anda (Pangasinan).
Agribusiness Quadrangle (NLAQ)—one of plane. Travel time from Laoag to Hong Kong,
President Gloria Macapagal-Arroyo’s super for instance, is an hour and 15 minutes; three Because the super region also boasts of rustic
regions—is rolled out in totality. hours to Shanghai, China and about the same but charming places like Pagudpud’s beaches,
time to Taiwan. Vigan’s Heritage Village, Sagada’s mummies,
The entire NLAQ spans a total of 66,495 and, of course, Banawe’s rice terraces, tourism
square kilometers of fertile land in 17 Investors in the agriculture sector should note is also a major attraction in the region. Lately,
provinces and 15 cities within the Cordillera that the government would be giving priority droves of Taiwanese tourists have been

The 2008 PBD Yearbook I 

DBP Yearbook Inside Rev3 (Final)6 6 12/22/08 5:23:48 PM


communication technology as a marketing
tool.

Infrastructure support

If life is a highway, NLAQ at present still


has to get a life. There are 10 existing inter-
regional roads that traverse NLAQ, but these
are grossly insufficient to connect the area to
each other to boost business and trade. There
lies the opportunity for companies that are into
construction of public highways.

When it comes to transportation by air, the


Laoag International Airport is the only one in
Region I with international and national flights
to Kaoshung, Hong Kong, Guangzhou and
Pudong/Shanghai. The San Fernando Airport in
La Union, the Vigan Airport in Ilocos Sur and
the Lingayen Airport in Pangasinan continue
to cater to just a small percentage of total air
travel to the region due to inadequate facilities
and low demand. Local flights in these airports
include mainly general aviation, military,
government and private flights.

For Region II, four public airports need to be


upgraded and improved. Additional airports
are also needed, particularly in Sta. Ana,
Cagayan to support the operations of the
Cagayan Special Economic Zone and Free
Port (CSEZFP) and in the island municipalities
to attain the envisioned tri-modal transport
system.

For Cordillera, the air navigational facilities


of Loakan Airport has been modernized, and
is expected to increase its functionality, and
support the fast-growing tourism, trade and
industries of the CAR region.

Included in the government’s wish list is the


modernization of the Baguio Airport to support
the manufacturing and tourism industries of
the region through fast, reliable and safe air
flocking to Ilocos Norte’s Fort Ilocandia, Lepanto Consolidated is already mining gold; transport services, more frequent and direct
Pagudpud and Baguio for cultural immersion, Bacnotan Cement Corp. is into limestone; flights between Baguio Airport and Manila,
sightseeing, golf, beaches and casinos. while Philex Mines and Climax Arimco Laoag, Subic, Clark, Tuguegarao, Bagabag,
Corp. are extracting copper. The government, and rural airstrips and helipads to cater to
There’s golden potential also in hydroelectric however, favor companies that are interested requirements of fast regional air travel to and
power generation and irrigation, because in sustainable, large and small-scale mining, from Baguio (e.g. medical missions, tourism,
NLAQ is the premiere watershed cradle of and rehabilitation of abandoned mines in the governance, etc).
the Philippines, constituting 31% of the total region.
drainage area of major river,basins. Seaports, which require massive investments
To increase productivity in the region, the and time, will have to be improved and
At least four companies have already taken government’s master plan also includes constructed within the region. The main ports
advantage of NLAQ’s metallic and non- promotion of investments in digital of San Fernando, La Union and Currimao,
metallic mineral resources such as gold, infrastructure like telecommunications, Ilocos Norte continue to cater to local and
copper, chromite, calcite, manganese, white broadcast media and cable television to international vessels containing mostly cargo
clay, sand and gravel. Well-known miner help businessmen use information and commodities moving in and out of the region.

The 2008 PBD Yearbook I 

DBP Yearbook Inside Rev3 (Final)7 7 12/22/08 5:23:50 PM


The Currimao Port was further developed
for better passenger and cargo handling
capability. The port has now a roll on-roll off
ramp servicing the Ilocos Norte-Batanes route.
Meanwhile, the operation and management of
the San Fernando Port has been privatized under
the Bases Conversion Development Authority.

For Region II, its open sea attribute and


its proximity to East Asian countries offer
a potential for maritime sea transport. But
Region II’s existing municipal port and fish
ports need to be improved and upgraded, aside
from the deficiency in sea or maritime vehicles,
especially connecting Batanes to the mainland
and the isolated coastal areas to urban hubs for
socioeconomic interaction.

The idea is to
bring the North
Luzon Agribusiness
Quadrangle (NLAQ) to
a production level that
would supply cheap
and fresh food not just
to Luzon’s burgeoning
population, but also
export these to nearby
Southern China,
Taiwan, Japan, Hong
Kong and Korea.

Power projects

With all the expected economic activity in the


super region, will the existing power structure be
sufficient to make the wheels of business turn?

In Region I, the 345 MW San Roque Multi-


purpose Project in San Manuel, Pangasinan
was completed in March 2003 through the
build-operate-transfer (BOT) scheme. Exactly
20 barangays were energized from 2001 to
2003, bringing the barangay coverage to
99.69 percent. In the Cordillera region, all
poblaciones have been served since 1997. At
the barangay level, 91.29% (or 1,070 out of
1,172) have been energized at the end of year
2002. Kalinga, Ifugao, Benguet and Abra
have service coverage of over 90%, while the

The 2008 PBD Yearbook I 

DBP Yearbook Inside Rev3 (Final)8 8 12/22/08 5:23:53 PM


province of Apayao has the least barangay Despite the region’s abundant water resources, Fruit and Vegetable Minimal Processing and
coverage at 57.25%. regional irrigation coverage merely stands at Packaging Plant in Benguet is expected to help
47.70% or 225,691 hectares out of the potential preserve the quality and increase the shelf life
In Region II, 331 barangays, or 27% of the irrigable area of 472,640 hectares. The national of vegetables from Benguet.
population (about 15,000 families) are still government lacks funds for irrigation or has
not energized. However, the government is a problem with delayed funding releases, and The Banaoang irrigation plant is happily ahead
targeting 100% coverage by end of this year. need more local government involvement in of schedule.
communal irrigation systems.
The Cordillera’s first hydroelectric power plant, The following projects are on schedule: the
the 75-megawatt Ambuklao HEP, has been Under the master plan for NLAQ, the national Baler-Casiguran Road, Casiguran Airport, the
non-operational since the 1990 earthquake government, local government units and the Poro Point International Airport.
when it was heavily damaged. In 2002, the private sector are investing in 23 massive
CAR’s net power generation was 627.76 infrastructure projects that will add seven new The following are still in the pipeline:
megawatts per hour, which is 2.8% of the airports, three ports, three roads, four irrigation Alaminos Airport, Salomague Seaport, and
Luzon Grid. Having only a peak of about 107.5 projects, a cold chain facility, three power and the 30-megawatt North Luzon Wind Power
megawatt, CAR is a net exporter of energy. two flood control projects. Project.

Cagayan Valley is a region of rich water “These investments shall increase agriculture The rest are delayed: Halsema Highway, the
resource. Its four mainland provinces production, hasten the delivery of agriculture Tabuk-Tuguegarao Road, the Bagabag Airport,
comprise about 58% of the entire area of the produce from the farms to the markets, reduce the Basco Airport, the Itbayat Airport, Port
Cagayan River basin and are traversed by transport costs, cut travel time, and increase Irene, the Bangui Bay Windfarm Project, and
four major rivers and its tributaries, lakes and farmers’ incomes while helping lower food the Agno River Flood Control Project.
swamplands. The island province of Batanes projects,” a government document on updates
also has its own share of inland and seawater on the super regions states. Feeding a nation with affordable food is a
resource. Given these endowments, the region business that doesn’t run out of style, especially
possesses tremendous potentials for the As of May 31 this year, the government with the expected global economic slowdown.
development of about 240,000 hectares of land has completed the Dingalan port in Aurora NLAQ appears to be a region well positioned
for agriculture. and windmills in Batanes. The La Trinidad for the times. – Ma. Salve Duplito

The 2008 PBD Yearbook I 

DBP Yearbook Inside Rev3 (Final)9 9 12/22/08 5:23:55 PM


The 2008 PBD Yearbook I 10

DBP Yearbook Inside Rev3 (Final)10 10 12/22/08 5:24:39 PM


The 2008 PBD Yearbook I 11

DBP Yearbook Inside Rev3 (Final)11 11 12/22/08 5:24:56 PM


The 2008 PBD Yearbook I 12

DBP Yearbook Inside Rev3 (Final)12 12 12/22/08 5:25:00 PM


The 2008 PBD Yearbook I 13

DBP Yearbook Inside Rev3 (Final)13 13 12/22/08 5:25:05 PM


Luzon
Urban Beltway

Keeping
the
country’s

Subic-Clark-Tarlac Expressway
main
arteries
healthy
DRIVING THE LENGTH of the Subic-Clark-
Tarlac Exchange (SCTEX) for the first time
makes motorists feel like they have been competitive industrial and service center with President Gloria Macapagal Arroyo, in her
transported to the great highways of North high quality of life for its people.” State of the Nation speech indicated that she
America. wasn’t blind to the weaknesses of the region.
The Luzon Urban Beltway is composed of the
More than the fact that it is wide and smooth, National Capital Region (NCR), provinces in She said: “To be world-class, we invest in
and that the sight of mountains blasted in Region IV-A, and the provinces of Bulacan, five comprehensive strategies for global
the middle to make way for the only decent Bataan, Pampanga, Mindoro, Marinduque ad competitiveness [in the Luzon Urban
highway in North Luzon that is not used for the southern parts of Tarlac, Zambales, Aurora, Beltway]:
drying rice on a clear day is breathtaking, the and Nueva Ecija.
major treat provided by the SCTEX is this: it 1. Make food plentiful and affordable to
is the only major road project that will connect Government’s vision for the super region is keep our labor cost globally competitive;
Luzon’s east and west coasts. not just to make the Luzon Urban Beltway
the center of the country’s industrial and 2. Reduce the cost of electricity to make our
It used to be that all goods from the Pacific service sectors but also to turn the region into factories regionally competitive;
side of Luzon still had to turn the bend at the something that will rival Hong Kong and
tips of Luzon to get to Manila. That’s because Singapore, and other wealthy Asian cities. As 3. Modernize infrastructure at least cost to
before the SCTEX, all major roads in the area of 2004, services account for 59% of Metro efficiently transport goods and people;
went South to North and vice versa like the Luzon’s gross regional domestic product, while
North Luzon Expressway and the South Luzon industry contributes 34% and agriculture, 4. Mobilize, upgrade and disseminate
Expressway. Thus, SCTEX is the shaft of an forestry and fishery a minimal 7%. knowledge and technologies for
economic arrow, if you must, that should help productivity; and
Luzon by bringing Clark and Subic together Since the National Capital Region is already
and creating the biggest economic region in the the center of commerce, business, industry, 5. Reduce red tape in all agencies to cut
country, both in scale and economic might. and media—home to the Makati and Ortigas business costs.
business districts—and accounts for half of the
Construction projects like the SCTEX, roads, country’s gross domestic product, that seems to There are also other non-economic
ports, railways, transmission lines, gas pipelines, be the most economically logical plan. considerations, namely human trafficking and
wastewater treatment plants, food terminals red tape.
and airports reduce the cost of business, attract The region, however, is bursting at the seams.
investments, increase the value of land, and Cavite is growing at 6% per annum and Rizal The business plan is to eradicate all these
hopefully lift every citizen’s boat as well. In at 5.7 percent. Twenty-six million people as weaknesses with reforms in both soft and hard
the Luzon Urban Beltway super region created of 2000 occupy 41 square meters of land. infrastructure.
by the government in 2006 through Executive Traffic is incredibly congested and the dreamed
Order 561, these mega infrastructure projects logistic strength, ironically, needs more The network of roads and railways will move
are at the crux of making the area a “globally infrastructure investment. goods and people more efficiently.

The 2008 PBD Yearbook I 14

DBP Yearbook Inside Rev3 (Final)14 14 12/22/08 5:25:08 PM


Socioeconomic conditions colorful, humongous billboards. Housing The government has also prioritized reducing
backlog is projected to be at 95,000 from air and water pollution, for example by
In a services-oriented economy, companies’ 2005 to 2010, or 48.5% of the total backlog in cleaning up and developing Manila Bay, the
greatest assets, people that move up and down the country. There are not enough hospitals, Pasig River and other major river systems and
elevators and ride commuter trains may opt to classrooms and teachers for the rising tributaries, and turning concrete jungles into
migrate to other countries or scale down living population. residential gardens. Property developers like
to the provinces, and occasionally get burned Ayala Land, and other companies within the
out, cold feet, and even kick the bucket. No The government says it will solve these issues highly competitive real estate industry have
wonder that for the Luzon Urban Beltway, a by improving the quality of basic social taken on the challenge of greening Metro
high quality of life for its people is a crucial services (it is targeting medical tourism for Manila.
precondition for reaching First World status. subsidizing health services for the poor),
People need to spend less hours on the road creating onsite and off-site housing for Lately, taxicabs that have converted to liquefied
in traffic, have stable and high-paying jobs, informal and low income dwellers in Metro petroleum gas and buses that use compressed
be allowed to take time off for recreation, and Manila and expanding the public transport national gas have been plying Manila streets,
build families that are happy and contented. system so they can still come to work without and reducing air pollution, thanks to the spike
spending half of their day on the road. in oil prices early in 2008.
The figures show there’s still much to be done.
Marinduque, Mindoro Oriental and Mindoro “So that our commuters in Metro Manila The vision
Occidental suffer from worsening poverty, will not be so tired, we will spend money
with an incidence level of 40%, higher than on expressways and trains. We will have a The Arroyo administration envisions Bataan,
most of Asia. By Asian standards, even Bataan, continuous highway from Clark to Metro Bulacan, Pampanga, Tarlac and Zambales—
Bulacan, Pampanga, Tarlac, Zambales, Cavite, Manila to Batangas Port. together—as a human resource transshipment
Laguna, Batangas, Rizal and Quezon’s average and logistics hub in the Asia-Pacific region
poverty incidence level is still steep at 13% We will construct the Northrail to Clark and and as a developed industrial heartland with
to 14%. Metro Luzon’s labor force makes the Southrail to Lucena and on to Bicol, and seamless and integrated physical access into
up 39% of the country’s total. Because of upgrade the link between them. We will also the area.
the population density, many live in muddy extend the LRT to Bacoor,” Arroyo said in her
shanties hidden under city bridges and behind 2007 SONA. The least advanced of the super region,

The 2008 PBD Yearbook I 15

DBP Yearbook Inside Rev3 (Final)15 15 12/22/08 5:25:17 PM


Mindoro Oriental and Occidental and
Marinduque can be a gateway to southern
Philippines and a food basket for Metro Manila
and Calabarzon.

Region IV-A (Cavite, Laguna, Batangas,


Rizal and Quezon) will house the region’s
greatest assets, with well-planned town clusters
supported by modern intermodal transportation
and digital infrastructure to connect them with
each other and preserve their quality of life.

The National Capital Region, stretching


from Quezon City all the way to Paranaque

MRT-3 passengers
and Alabang, will be maintained as a major
business and transaction center in the Asia-
Pacific region.

Information technology parks and special


economic zones will play major roles in this
vision. There are 24 IT parks now in the region,
accounting for 82.75% of the country’s total depend on efficient power distribution and To be truly an Asian center of commerce, the
and 39 special economic zones or 81.25% generation and cheap electricity to electrify its government wants to open up the Pacific Coast
of the total. These areas were built to cater industries and businesses. but are swamped by problems such as the
to companies looking for fiscal incentives, narrow development corridor due to geographic
buildings designed for efficiency and structures The controversial Wholesale Electricity Spot constraints of the Sierra Madre Mountain
that will complement industries. Market, the government says, has already range, the Laguna Lake and the Manila Bay.
reduced the cost of electricity since it was
Clark and Subic are being groomed to be implemented in 2006. The solution: construct East-West roads like
logistic hubs since they are located at the heart the Marikina-Infanta Road and the Umiray-
of Asia. Air travel from both areas to major Other interventions to improve the super Dingalan Road, and rehabilitate existing roads
cities such as China and Hong Kong takes less regions are to upgrade the information and like the Nueva Ecija-Aurora Road.
than two hours. Singapore, Seoul, South Korea community technology infrastructure (a big
and Thailand are just three hours away. Tokyo technology hub in Quezon City near the UP There will be new road constructions and
is four and the United States is 18. Diliman Campus is testament to the private upgrading of facilities in Real and Dingalan.
sector and government cooperation about this),
By sea, Tokyo and Kuala Lumpur are farthest, English training and streamlining of business Update on projects
but only six hours away, while Seoul is five, approval processes.
Brunei, Beijing and Singapore at four, and As of May 2008, four projects have been
Taipei and Bangkok are only three hours away Compared with Vietnam, China, Indonesia, completed in the Luzon Urban Beltway super
by sea. Malaysia and Thailand, Filipinos in the Luzon region: the roll on-roll off ports of Lucena and
Urban Beltway have higher minimum wage Cawit and the port of Batangas were the first to
Interventions rates at US$4 to US$6 per day. be completed in 2007.

The proximity, however, might as well be This is partly because of the high cost of living: In early 2008, the Subic Port was finished,
ignored without world-class airports and food is expensive and cheap and potable water completing all four priority LUB projects. The
ports. Clark and Subic both have international do not flow from faucets and are instead mostly four projects, amounting to P14.14 billion,
airports and are increasingly servicing flights, bought. enhanced the RoRo and sea port facilities and
but not yet at optimum levels. The government services in Luzon.
believes it can make the Batangas port fully The government has listed both high on its
operational before 2010, and use Sangley Point priority list and has started plans to develop Fourteen more road projects are being
and Fernando Airbase for civil aviation. Aurora, Marinduque, Mindoro and Nueva constructed to interconnect the industrial,
Ecija as food baskets for the super region. commercial and transport hubs of the super
Electricity, however, is still expensive. At Fruits, vegetables and other food items are region:
US$0.09 per kilowatt hour for residential areas, to be efficiently transported from Mindanao
US0.0933 for commercial and US$0.0809 and the Cagayan Valley to the Luzon Urban 1. The Subic-Clark-Tarlac Expressway
for industrial, power in the region costs much Beltway through efficient transport systems. Project’s Clark to Tarlac leg and eight
more than in South Korea, Malaysia, Vietnam, New water sources are also being developed, overpasses are under construction, which
China, Thailand and Indonesia. This is a namely the Wawa Dam, Laguna Lake and will truly make the expressway useful for
major concern for the super region, which will Laiban Dam. agribusinesses from North Luzon;

The 2008 PBD Yearbook I 16

DBP Yearbook Inside Rev3 (Final)16 16 12/22/08 5:25:19 PM


2. SCTEX Porac Interchange which will 7. EDSA Rehabilitation Project, which is 11. Manila-Cavite Toll Expressway Project
enhance traffic and logistics along the hoped improve travel time and pedestrian will connect Zapote, Las Pinas to Kawit,
SCTEX and improve its accessibility to safety along Metro Manila’s main Cavite;
Pampanga; artery involves re-blocking, sidewalk
rehabilitation, among other things. The 12. Daang Hari-SLEx Link Road will link
3. Tarlac-La Union Toll Expressway, Bicutan Interchange has already been Daang Hari in Bacoor, Cavite to the
which will support the socioeconomic completed and the EDSA-LRT Corridor SLEx;
development of Regions I, II and construction is expected to be finished by
CAR, and help decongest traffic along March 2009. 13. Southern Tagalog Arterial Road Project
McArthur Highway; Phase II is a 19.74 kilometer road that
8. C6 Lakeshore Expressway will serve as will cut travel time from Sto. Tomas
4. Tarlac-Nueva Ecija-Aurora-Dingalan an alternative North-South expressway in Batangas to Batangas City by 40
Port Road connecting the XCTEX to the link to decongest EDSA, C5 and its minutes; and
Dingalan Port in Aurora; arterial roads through a 16.7-kilometer
expressway from the Bicutan Interchange 14. Marikina-Infanta Road will link
5. North Luzon Expressway Project, which to Ortigas Avenue Extension; Sumulong Highway to Masinag,
will connect existing roads through an Antipolo, traversing the Sierra Madre
84.5-kilometer parallel expressway to the 9. Metro Manila Skyway Stage 2 will link Mountains to the intersection of
east of the Pan-Philippine Highway, from the NLEx to the SLEx. Sinoloan-Famy-Real-Infanta rad.
Plaridel, Bulacan to San Jose, Nueva
Ecija 10. SLEx Extension Project will rehabilitate, Government is investing around P202.23
upgrade and expand the Alabang billion in eight railways in the super region
6. C5-NLEx-SLEx Link that will connect Viaduct and the toll road from Alabang that will not only speed up travel but will also
the North Luzon Expressway to the to Calamba, and construct a toll road connect North and South Luzon and close the
South Luzon Expressway via the C5 connecting SLEx to the Southern Tagalog MRT and LRT loop.
Road. Arterial Road; These are

The 2008 PBD Yearbook I 17

DBP Yearbook Inside Rev3 (Final)17 17 12/22/08 5:25:21 PM


1. Northrail Project is an 80.2-kilometer Calamba, Laguna to Lucena, Quezon to Government’s vision is not just to make
rail track that will cut travel time from shorten travel time. the Luzon Urban Beltway the center of the
Caloocan to Malolos, Bulacan by 42 country’s industrial and service sectors but
minutes and from Malolos to Clark, Two new airports, Diosdado Macapagal also to also turn the region into something
Pampanga by more than an hour; International Airport will promote Clark as that will rival Hong Kong and Singapore,
one of the best international logistics and and other wealthy Asian cities. As of 2004,
2. Northrail-Southrail Linkage Project will services center in the Asia-Pacific Region, and services account for 59% of Metro Luzon’s
rehabilitate the 34-kilometer railway the controversial Ninoy Aquino International gross regional domestic product, while
from Caloocan to Alabang and upgrade Airport 3 has a capacity of 13 million industry contributes 34% and agriculture,
the 27-kilometer railway from Alabang to passengers per year on a 63.5-hectare site forestry and fishery a minimal 7%.
Calamba, Laguna; of the Villamor Air Base has already began
servicing flights this year. grid requirement of South Luzon. Bid
3. LRT Line 1 North Extension will extend documents are up for finalization.
a 5.4-kilometer elevated seamless line Power and energy projects, amounting to
from the Monumento Station of LRT P48.7 billion, are expected to improve the 5. 350 megawatt expansion of the Pagbilao
Line 1 to the North Avenue Station generation and distribution, and lower the cost Coal-Fired Power Plant. Studies and
of MRT 3 to reduce travel time from of power. technical reviews are ongoing.
Monumento to North EDSA from 21
minutes to seven minutes; 1. The 230-kilovolts Concepcion-Clark Government is pursuing P9.88 billion
Power Transmission Project will provide worth of flood control projects, namely the
4. Metro Rail Transit 3 Capacity Expansion reliable and more efficient transmission KAMANAVA area flood control and drainage
will involve buying more light rail system to serve the growing power system improvement project and the Pinatubo
vehicles from 2008 to 2014 to transport demand of the Clark economic zone. Hazard Urgent Mitigation Project to lessen
more people; damages in Sasmuan, Guagua, Lubao and San
2. Bataan Liquefied Natural Gas Terminal Fernando City in Pampanga.Two water projects
5. MRT 7 is a 22-kilometer rail transit will create a 180 million cubic feet per costing P11.35 billion will secure the region’s
system, with 14 mostly elevated stations day facility that will serve as a receiving water supply. One will benefit 2.25 million
from the North Avenue station in terminal of imported LNG. Discussions people living in Muntinlupa, Paranaque, Las
EDSA, Quezon City to the Intermodal on business strategies have begun early Pinas, Pasay, Bacoor and Imus; and the other
Transportation Terminal in San Jose, Del this year. will recover raw water lost due to leaks and
Monte Bulacan; ensure the structural integrity of Angat Dam,
3. Bataan-Manila Pipeline is a 140- which conveys half of the water supply of
6. LRT Line 2 East Extension to Masinag kilometer natural gas transmission line Metro Manila.
extends the LRT Line 2 (Recto to and distribution facility. This is expected
Santolan) eastward to Masinag, Antipolo; to be completed in 2012, but discussions There are 80 small irrigation projects that
are ongoing. have already been completed, but 40 more are
7. LRT Line 1 Extension is an 11.7- ongoing, one septage treatment plant project
kilometer railway line extension from 4. Binan-Sucat 230-kilovolt Transmission in Antipolo, upgrading of 10 hospitals and
LRT Line 1 in Baclaran to Bacoor, Cavite Line Project will install a 14-kilometer relocations and housing projects. There is no
to cut travel time; and transmission line at the Binan-Laguna way but up for this region, and the government
and Sucat, Paranaque City substations is running on a deadline, things that astute
8. Southrail Project Phase IA will to increase transfer capacity by 880 investors are already taking advantage of.
rehabilitate the railway line from megawatts and accommodate the power –Ma. Salve Duplito

The 2008 PBD Yearbook I 18

DBP Yearbook Inside Rev3 (Final)18 18 12/22/08 5:25:23 PM


The 2008 PBD Yearbook I 19

DBP Yearbook Inside Rev3 (Final)19 19 12/22/08 5:25:27 PM


The 2008 PBD Yearbook I 20

DBP Yearbook Inside Rev3 (Final)20 20 12/22/08 5:25:32 PM


The 2008 PBD Yearbook I 21

DBP Yearbook Inside Rev3 (Final)21 21 12/22/08 5:25:35 PM


The 2008 PBD Yearbook I 22

DBP Yearbook Inside Rev3 (Final)22 22 12/22/08 5:25:38 PM


The 2008 PBD Yearbook I 23

DBP Yearbook Inside Rev3 (Final)23 23 12/22/08 5:25:39 PM


Central Philippines

A tourist
haven
FOR YEARS, traveling by road from
Mindanao, the southern-most major island
of the Philippines, to Metro Manila was
impossible. Around 2,075 islands and
islets stand between Mindanao and Metro

Sailing in Boracay
Manila; and before 2006, there was a lack
of respectable roads, bridges and ferryboat
facilities between them.

In September 2008, Ma. Jennelyn and Jonathan


Montales, a young couple eager to see the
beauty of the Philippine countryside, decided
to travel by land from Davao to Metro Manila bonding together as a family for one whole Dumaguete, Bacolod, Iloilo, and Puerto
when the company Jonathan was working for week,” said Jennelyn. “It was surprisingly easy Princesa. Outside these cities are mountains
asked him to relocate. They left Davao with and the roads, except for Samar’s, were really where peaks reach 900 meters, hills, river
one-week’s worth of clothing and supplies in good,” she added. basins, flood plains, plateaus and valleys.
their Nissan Frontier, sat baby Jill securely in
her seat, and went northward in the adventure Transformation The area is ripe for eco-tourism, a recent craze
of their lives. They had earlier shipped the rest in the tourism industry. It has 73 declared
of their belongings by container van to their The transformation is part of the results of National Integrated Protected Areas System
new home in Malolos, Bulacan. a master plan for the Central Philippines areas covering more than 320,000 hectares; and
super region created by President Gloria 38 proclaimed watershed reserves accounting
The leisurely drive brought them from Davao Macapagal-Arroyo in 2006 under Executive for almost 311,000 hectares of the super region.
to Surigao where they enjoyed a four-hour Order 561. During her State of the Nation
roll-on-roll-off (RORO) trip on calm seas Address on the same year, Arroyo explained
from Lipata Port to Liloan Leyte. From there, why the super region would be developed
they drove for two hours going to Tacloban, mainly for tourism.“Central Philippines has Topbilled by
stopping along the road for lunch and snacked the competitive edge in tourism in its natural
while driving. They even had time to see wonders and the extraordinary hospitality of Boracay, Cebu,
where Gen. Douglas McArthur landed and to its people. The area sweeps across Palawan
sleep at Hotel Alejandro in Tacloban, a hotel and Romblon, the Visayas and Bicol, plus Bohol and
with a historical collection of World War II the northern Mindanao islands of Camiguin,
memorabilia. Siargao and Dapitan. Topbilled by Boracay, Palawan, Central
Cebu, Bohol and Palawan, it attracts more than
“It was like Corregidor, and we enjoyed it half of the foreign tourists to the Philippines. Philippines
immensely,” Jennelyn said. It is also the center of geothermal power in

The next morning began with a drive that


the country, which we continue to develop,”
Arroyo then said.
attracts more
led them to San Juanico Bridge that connects
Leyte and Samar; then another RORO ride Central Philippines spans 24 provinces, 45
than half of the
(this time for two hours) going to Matnog,
Sorsogon. They spent two days at Pepperland
cities, 524 municipalities and 63 congressional
districts. Its land area is 30.5% of the entire
foreign tourists to
Hotel in Legazpi City and went on to Manila
after the leisurely weeklong trip. The cost: less
Philippines and it has 39% of the country’s
coastline—long white beaches and rich coastal
the Philippines
than P20,000 including fuel, food and port fees. marine resources, which includes world-
Much cheaper than if Jennelyn, Jonathan and class Boracay.Seven of the country’s most-
baby Jill took the plane and had the Nissan visited beaches are found in the geographical While tourists ranging from domestic to
Frontier shipped to Manila. regions of Cebu, Aklan, Negros Occidental, Hollywood personalities to royalty have beaten
Bicol, Samar, Palawan and Mindoro. Central the path to Boracay, only few have discovered
“It would have cost the company P36,000 Philippines has nine primary growth areas: the lonely and pristine beauty of places like
just to ship the car. Plus we had a great time Naga, Legazpi, Tacloban, Tagbilaran, Cebu, Sagay City where an island no bigger than

The 2008 PBD Yearbook I 24

DBP Yearbook Inside Rev3 (Final)24 24 12/22/08 5:25:44 PM


the size of an average store in a mall during As of 2004, Central Philippines accounted Harnessing coastal and marine resources
high tide boasts of ultra clear waters and a rich for 20.8% of the country’s economic output,
diving spot offering the sight of the biggest with Central Visayas and Western Visayas Central Philippines’ numerous bays and gulfs
clam in the Philippines. There’s Pucio Point, providing bulk of economic activity. are far superior to those of other Southeast
suspected to be the deepest point in the world Asian countries, and yet, none are included in
next to the Marianas Trench, in the Antique In 2006, the region saw the highest growth in popular Asian cruises.
Province, and dozens more of hidden surprises mining and quarrying, followed by the sectors
for the tourist looking for places to unwind. of electricity, gas and water, agriculture The super region’s fishing grounds account
The uneven development of tourist attractions and fishery, trade, and consumption. Private for 37% of the national fish production. There
indicates there is still huge untapped potential services, which include tourism, grew are 10 existing mariculture parks (at least five
in Central Philippines. 6.5% but contributed 10.2% to the super hectares in size) that yield milkfish (bangus),
region’s gross regional domestic product. grouper, siganid, seaweeds, abalone, mussel
Tourism revenues from Central Philippines The master plan for the Central Philippines and oysters. Thirteen more are planned for
reached P83.82 billion in 2005, with Western Super Region, based on documents from the Samar, Cebu, Bohol, Negros Oriental, Palawan,
and Central Visayas getting the lion’s share, National Economic Development Authority, Coron and Calatrava.
raking in 38% and 35%, respectively. In shows that seven “strategic themes” for
2007, 5.84 million tourists trooped to central the area revolve around harnessing coastal For ecotourism, the Northwest Panay Peninsula
Philippines. “Using sustainable tourism as the and marine resources and addressing the Reserve, for example has been declared the
main development thrust enables this super small islands’ fragile ecosystem, linking last ecological frontier in the Philippines, with
region to tap the development potentials of the islands through efficient transportation endangered species such as the writhed-billed
even the smaller islands and protect these and communication facilities, promoting hornbill (aceros waldeni), the Visayan tarictic
islands’ fragile marine and coastal ecosystem, the Central Philippines Tourism Center, (Penelopides panini), the Negros bleeding heart
Medium, small and micro enterprises, developing agribusiness, small-and medium- pigeon, the Philippine hawk eagle, and the
agribusiness and other job-generating activities sized enterprises and export potential, Visayan spotted deer. There are 15 more small-
will be spurred by an enhanced infrastructure pursuing responsible mining and quarrying, island fragile ecosystems scattered all over the
program and an increase in tourism activities in optimizing power potentials and ensuring region that indicates there’s something in the
this Super Region,” a government brochure on adequacy and sustainability of supply and Central Philippines not just for the senses, but
the super regions states. enhancing social services. also for the soul seeking to understand nature.

The 2008 PBD Yearbook I 25

DBP Yearbook Inside Rev3 (Final)25 25 12/22/08 5:25:45 PM


Boracay sunset
However, years of overfishing using cyanide intensive road projects are expected to reduce Because the business and knowledge process
and dynamite, siltation in mangrove habitats travel time from Mindanao through Visayas outsourcing sectors are major investors in the
and both domestic and industrial pollution to Luzon by 10 hours and to cut transport cost region, the Arroyo administration also dreams
may endanger these ecosystems. The national of people by 40% and cargo by 30%, based of a central Philippines that is not just linked by
government, with the help of local government on the 2004-2010 Medium Term Philippine roads and nautical highways, but also by fiber
units in the super region, is rushing to create Development Plan of the Arroyo government. optic and wireless networks. This is a challenge
fish sanctuaries in municipalities and enforce especially in smaller islands that abound in the
fishery laws to prevent more damages. The A NEDA-United Nations Development super region, a problem that can only be solved
plan to protect these ecosystems also involves Program study released in 2005 shows that with the support of local government units.
planting mangroves, rehabilitating coral reefs, freight cost P1.75 per kilo via container van,
and using an integrated approach to watershed/ but this can go down to P1.68 via RORO. Promoting tourism and small businesses
river basin and coastal management. Across Losses and spoilage, handling and wharfage
the super region’s coastal areas, all these costs are also bound to come down, resulting From rich dive sites, to Palawan’s famous
interventions will not be sustainable without in a total transport cost savings of P1.35 per underground river, from caves to volcanoes,
the support of locals, many of whom through kilo. from whale sharks, to manta rays to dolphin
years of ignorance and neglect, pollute their watching, possibly no area in the entire
natural treasures. These may, however, be offset by taxes and Asian region is more densely packed with
regulatory fees from local government units natural wonders as Central Philippines.
Linking the islands and cargo handling costs in RORO ports. The super region master plan has created
a more focused tourism brand image for
Jennelyn and Jonathan’s experience two There is also much to be done to improve the region, with coordinated marketing of
months ago shows that the western, eastern, existing air links in the region. Airports tourism sites packaged together in island
and central nautical highways are not purely and feeder ports are a major component of hopping experiences, for example. As the
government public relations stunts, but the the Arroyo’s infrastructure plan for Central tide of tourism is lifted, so do boats of small
ambitious plans to link the more than 2,000 Philippines so that the region can fully benefit business serving the sector, as well as export
islands within the Central Philippines super from the country’s proximity to major cities companies that can be competitive with the rest
region will require even more investments in like Japan (four hours away from Mactan of the world. At present, the major exports of
roads, bridges and RORO facilities.Road links Cebu International Airport), Hong Kong (two Central Philippines are sea vessels, electronics,
from places like Cataingan to Aroroy, Masbate, hours) and Singapore (three hours). Small furniture, wearables, fashion accessories,
and then a RORO-boat link from Aroroy to things also matter much to the weary traveler handicraft, house décor, gifts, toys and house
Pilar, Sorsogon, plus a host of other capital- like signages, rest areas and clean toilets. wares and agriculture products like coconut and

The 2008 PBD Yearbook I 26

DBP Yearbook Inside Rev3 (Final)26 26 12/22/08 5:25:46 PM


The 2008 PBD Yearbook I 27

DBP Yearbook Inside Rev3 (Final)27 27 12/22/08 5:25:50 PM


Whitewater rafting
the increasingly popular virgin coconut oil (12% Bais, Cebu Cybertown IT Park, the Cebu minerals.However, the government is watching
of Central Philippines is planted with coconut), Light Industrial Park, the Cebu South Road out for unsustainable practices of informal or
mango, abaca, nuts and seaweeds. In The Properties, the Federated IT Park and the small-scale mining operations, conflicts arising
shipbuilding industry received in 34 bulk carrier Mactan Export Zone in the Eastern Visayas. from overlapping claims made by mining
orders in 2006 for delivery in 2009. companies and indigenous communities, poor
Mira Nila in the Central Visayas appears to be community acceptance of large scale mining
To realize the vision of more tourist arrivals the largest with over 3,000 square kilometers. operations due to environmental concerns and
and SME growth, the government has gone The others are the MRI Ecozone, the New share in benefits and sand extraction in offshore
on numerous entrepreneurship workshops and Cebu Township, the Panglao Tourism Estate, areas resulting to a scarring of the environment.
caravans, created one-stop shops for business the Pulambato-Bogo, Polo Ecocity and West
documentation and enterprise advisory under Cebu Industrial Park, all in Central Visayas. With the help of organizations like the US
the Department of Trade and Industry, improved Agency for International Development, even
infrastructure like airport and port facilities Responsible mining non-government organizations are trying to help
and is hard at work on ensuring reliable power solve the problem by simplifying procedures
supply. Some of Central Philippines’ riches will have to for processing local government units’ share in
be extracted and dug out to be enjoyed. Based excise taxes to give them ownership over the
Available areas for investments are the Rio Tuba on June 2006 estimates, there’s an estimated mining operations that are approved in their
Special Economic Zone in the ROPA region $367.4 billion worth of nickel reserves in the areas. Some of the interventions for Central
with 423.9 hectares, the Bicol Industrial Park, super region, accounting for 90% of the area’s Philippines also involve rehabilitating mined-
Global Industrial Maritime Complex, the Isarog potential mineral resources. Copper is valued at out areas in accordance with Environmental
Heights Special Economic Zone, the Legazpi $30.2 billion, while gold is at $14.2 billion. Protection and Enhancement Program and Post-
City Special Economic Zone, the Naga Agro- mining Land Use Plan.
Industrial Center, te Rapu-Rapu Economic Zone Central Philippines also accounts for almost
and the Tiwi Ecozone in the Bicol region. 20% of the country’s mineral production, which The Philippine Mining Act and People’s Small
is why there are around 18 existing mining Mining Act are also expected to help improve
Further down south are the Leyte Industrial projects in the area and at least 16 more are responsible mining in the areas, as well as a
Development, the Leyte ICT Park, the starting to explore in what they believe are more robust partnership between province and
Amihan Woodlands Township, the Asia Town, mine sites that will yield precious metals and private sector through corporate vehicles.

The 2008 PBD Yearbook I 28

DBP Yearbook Inside Rev3 (Final)28 28 12/22/08 5:25:51 PM


The 2008 PBD Yearbook I 29

DBP Yearbook Inside Rev3 (Final)29 29 12/22/08 5:25:53 PM


Power supply

Tourism and business will not thrive when


power supply is intermittent or faulty. As of
2006, geothermal energy in Central Philippines
still had the highest generating capacity, while
hydroelectric power has not yet been fully
tapped.

This has caused power rates to be fairly


expensive in the region. The Bicol peninsula
has the highest at up to P9.19 per kilowatt-hour
for residential consumers, P8.72 per kwh for
commercial establishments and P10.15 kwh
for industrial users. In the region, power is
cheapest in some parts of central Visayas with
P5.04 per kwh for residential, P4.9 per kwh for
commercial and P4.84 per kwh for industrial
users.

Many Palawan, Masbate, Northern Samar, and


Eastern Samar baranggays still do not have
electricity, but all other barangays already
enjoy power. The problem is that by 2011, the
government expects critical capacity for the
Visayas to start. This can partly be solved by
Transmission Corp.’s upgrades and installation
of transmission lines and substation capacities
in the area and interconnect small island grids
of Bantayan, Guimaras, Siquijor, Camotes and
Romblon.

With sustainability of power becoming more of


an issue, not just in central Visayas but also the
rest of the Philippines, there is renewed search
into potential renewable energy sources which
include micro hydro, rice residues, and coconut
residues.

Wind energy is also encouraged for


Catanduanes, Guimaras, Masbate, Northeast
Coast of Negros Occidental and Palawan.
Solar energy and biofuels also present ripe
opportunities for investors in the region.

Update on projects

There are 52 priority infrastructure projects


for central Philippines including 18 seaports,
16 airports, nine power and electrification, six
roads and bridges, two flood control projects
and one railway system. As of May 2008, 11
have been completed, namely two roads, seven
RORO ports and two airports.

The improvements are happening, but


businesses and tourists want more, so that
the rest of the world can see what Central
Philippines can offer. –Ma. Salve Duplito

The 2008 PBD Yearbook I 30

DBP Yearbook Inside Rev3 (Final)30 30 12/22/08 5:25:55 PM


The 2008 PBD Yearbook I 31

DBP Yearbook Inside Rev3 (Final)31 31 12/22/08 5:25:56 PM


The 2008 PBD Yearbook I 32

DBP Yearbook Inside Rev3 (Final)32 32 12/22/08 5:25:59 PM


The 2008 PBD Yearbook I 33

DBP Yearbook Inside Rev3 (Final)33 33 12/22/08 5:26:02 PM


The 2008 PBD Yearbook I 34

DBP Yearbook Inside Rev3 (Final)34 34 12/22/08 5:26:05 PM


The 2008 PBD Yearbook I 35

DBP Yearbook Inside Rev3 (Final)35 35 12/22/08 5:26:07 PM


The 2008 PBD Yearbook I 36

DBP Yearbook Inside Rev3 (Final)36 36 12/22/08 5:26:10 PM


The 2008 PBD Yearbook I 37

DBP Yearbook Inside Rev3 (Final)37 37 12/22/08 5:26:13 PM


Agribusiness
Mindanao

Making
the promise
a reality
When the Mindanao super region was created
in 2006, President Gloria Macapagal-Arroyo
said the country’s second biggest island is
the government’s priority for agribusiness
investments in the south, and that she will plow
in more money in the super region than in the
others.

“Our investment priorities mirror those for


North Luzon and more because Mindanao has million persons in the labor force as of 2006, Economic zones that are ready for occupancy
the poorest regions and poorest provinces and 5.4% of which were unemployed and 26% for new entrants include the Ayala de
because we have to spend on a logistics system were underemployed. Official poverty statistics Zamboanga Park in Region IX, First Cagayan
linking it to the north,” she said in her 2006 also showed that 39.1% of Mindanao was de Oro Business Park, Jasaan Misamis Oriental
State of the Nation Address before the 13th still under the poverty line. The super region, Ecozone, Pueblo de Oro IT Park, Global Ispat
Congress. likewise, accounted for 23% of the national Industrial Park and NSC Special Economic
housing backlog with almost 140,000 housing Zone in Region X. In Region XI, the five
The super region is composed of 25 provinces, units needed. ecozones are the Apo Estates Special Economic
27 cities, 411 municipalities and 10,044 Zone, the First Oriental Business & Industrial
barangays encompassing Regions IX, X except Strategic themes Park, the Samal Casino Resort, the SRC
Camiguin, XI, XII, Caraga except Siargao and Calumpang and Tiger Valley Industrial Estate.
Autonomous Region of Muslim Mindanao. It is As is the case when government and business
where more than 18 million Filipinos live. want to invigorate an economy, infrastructure Region XII has four, namely, the CIIF Agro-
investments take priority. These projects are Industrial Park, Filinvest Technology Park
Then presidential adviser for the peace expected to turn Mindanao into the country’s General Santos, the General Santos Special
process (now press secretary) Jesus Dureza main agri-fishery export zone with brisk Economic Zone and the Sarangani Economic
was appointed as development champion for activity in fruit and vegetable production and Development Zone.
the region and he promptly met with local processing, feed milling, animal production,
government executives in Mindanao eager to meat processing, snack foods, coconut, In the Caraga Region, there’s the Nasipit
jumpstart economic activity in the super region, ornamental horticulture production and Agusan del Norte Industrial Estate, the Philnico
which accounts for 35% of the country’s land industrial tree plantations. Industrial Estate, Shannalyne Technological
area. and Environmental Park and the Tuba Agro-
Almost all rubber exports, for example, Processing Center. In ARMM, there is only
The pregnant expectations from local chief come from Mindanao, with six oil palm and one, the Maguindanao Ecocity.
executives were to be expected. The plans for rubber plantations scattered all over the super
the super region were anchored on the creation region. The other major crops include cacao, Official figures show that minimum wage rates
of five major growth centers that would turn pineapple, banana, coffee, cassava, corn and in Mindanao are still much lower compared
central and northern provinces into a major coconut. There are eight banana plantations with neighboring countries (Malaysia,
transshipment hub; western and northern that cluster in the central area of Mindanao and Thailand, Taiwan, South Korea and Singapore),
provinces into a fishery and mariculture center; two pineapple plantations, one in Bukidnon at $3.28 to $4.10 per day. Electricity costs
the northern and eastern provinces into an and another in Polomoloc. The major are also lower at P4.62 per kilowatt-hour,
agro-forestry and mineral center; the center agricultural exports so far are coconut oil, compared with the P6.27 per kilowatt hour
provinces into an agri-industrial core and the banana, tuna, pineapple (fresh, preserved and average price for the country.
eastern southwestern provinces, including juice concentrates), oil, rubber and desiccated
Davao, into an urban and agri-industrial center. coconut.Several companies have already The way for an even better agri-business sector,
discovered the seaweed, palm oil, coco- based on the super region master plan, is to
Imagine how these would benefit the 8.514 based and halal poultry industries’ potentials. intercrop in coconut plantations and to urge

The 2008 PBD Yearbook I 38

DBP Yearbook Inside Rev3 (Final)38 38 12/22/08 5:26:14 PM


local government units to invest in post harvest
facilities. Hybrid rice and corn are also being
promoted and state universities have been
given mandates to research and develop better
ways of expanding mariculture development
and agri-business produce.

For fisheries, the Medium Term Philippine


Development Plan envisions an aquaculture,
fish processing and canning, crab and prawn
production, as well as seaweed farming and
processing center for Mindanao. There is
much to be done to reach this status: establish
multi-species hatcheries, seed Lake Lanao with
fingerlings, form fishermen’s cooperatives and
buy bigger and better boats. For mariculture
development, the government’s priorities
involve establishing seaweed nurseries, post
harvest equipment such as smokehouses and
seaweed solar driers, mariculture parks in the
Island Garden City of Samal and promote
exports.As of 2006, Mindanao contributes 42%
of total fishery production and is the center
of the tuna and sardines industry. It is also a
major producer of carageenan. The marine and
fishery areas are in Pangul, Butuan, Gingoog,
Sibuquey, Lianga, Murciellagos Bays and in
the Sulu Sea, also in Davalo and Moro Gulfs,
and in four lakes, Lanao, Buluan, Mainit ad
Pinamaloy. Seaweeds are most prominent
in Lanao del Norte, Sulu and Tawi-Tawi.
Aquaculture products with high potentials
include groupers (lapu-lapu), seabass (apahap),
eels (kasili), mussels (tahong), oysters (talaba),
sea urchin (tuyom), milkfish (bangus), carp
(tilapia), prawns (sugpo), crab (alimango),
catfish (hito) and aquarium fish.

For livestock and poultry development,


government’s priorities are for preventive
measures against avian flu and other
diseases, processing plants, cold storage and
laboratories, improving genes of existing
production stock, quality standards for pork
and poultry products and strict quarantine
measures and other related regulations.

The plan also intends to expand goat production


to cater to the Middle East market, develop
a home-based meat processing industry and
encourage public and private partnerships to
further develop the halal food industry.

Mineral resources are also a major strength of


the super region, since it is rich in gold, nickel,
copper, iron, ore, lead, zinc, chromite, and
magnetite. Mindanao accounts for nearly of
the country’s gold reserves and 83% of nickel
reserves. Its nickel deposit is the largest in
Asia.

The 2008 PBD Yearbook I 39

DBP Yearbook Inside Rev3 (Final)39 39 12/22/08 5:26:17 PM


Zamboanga, Surigao and Diwalwal are the
most notable mineral reservations so far,
but at least 11 major mining products and
corporations are already exploring Mindanao.
The value of potential copper reserves has
been placed at $6.49 billion, gold at $2-$3
billion and nickel at $2 trillion.

Gas and oil deposits are also found in the Sulu


Tawi-Tawi shelf, the Cotabato basin and the
Agusan Davalo Basin.

Roads and bridges

Under the plans for the super regions, the


government intends to supply international
demand for fish products.

For this to be sustainable, it will regulate


fishing in traditional areas. Mindanao will also
increasingly become a source of food to Visayas,
Central Luzon, Metro Manila and Calabarzon,
all of which suffer from the loss of agricultural
lands and from increasing population.

To supply such demand, all these strategic


themes will need road networks, seaports and
airports to work, which will link Mindanao
to these areas through the Western, Central
and Eastern nautical highways. Transporting
goods through the highways reduces cost by
11% and time by 10 hours.

Mindanao is the beneficiary of nationwide


farm-to-market roads, small irrigation
projects, and hospitals. On top of that,
government has lined up eight more roads,
one bridge, seven airports, two seaports, one
major irrigation project, and eight power and
electrification projects.

The going, however, has been slow. Only


three projects have been completed since that
meeting. There is the Diosdado Macapagal
Bridge in Butuan City, which now enhances
travel from the Surigao-Agusan-Davao Road
to the Butuan City-Cagayan-Iligan Road. The
goal iss to support the growth of the Caraga
geographical region, especially sleepy Butuan
City. And then, there are the 210-megawatt
clean-coal-fired power plant in Misamis
Oriental and the solar power pPlant in
Cagayan de Oro, both are now contributing to
Mindanao’s power requirement.

Aside from the three completed, there are


25 more projects waiting in the wings in the
massive region, and these will incur equally
massive costs.

The 2008 PBD Yearbook I 40

DBP Yearbook Inside Rev3 (Final)40 40 12/22/08 5:26:20 PM


Government is spending P20.43 billion in all
for new major road networks in the Mindanao
super region to make it easier to bring farm
produce to the market faster and cheaper.

The Dakak-Dapitan Road project will widen 10


kilometers of road in Dapitan City leading to
Dakak, which is famous for its coral reefs and
diving spots. Businessmen and tourists should
have a more reliable, efficient and safer access
to Dapitan City and Dakak by August 2009,
when the road is expected to be finished.

A bigger and longer road, the Dinagat Island


Road Network, should also be passable by
April 2009. It connects the municipalities
of Cagdianao, Loreto, Dinagat, San Jose,
Basilica, Libjo and Tujanon in the province of
the Dinagat Island, with a total cost of P504
million. Even barangays in Esperanza, Agusan
del Sur will be included in another road
network costing P92 million, but the project
is still in the process of completing detailed
engineering.

In the works is a P2.07 billion, 88-kilometer


road project that will provide access to the
agricultural, industrial, fishing, commercial
and tourism activities in the provinces of
Maguindanao and Sultan Kudarat. The
government expects that the contract packages
will be completed by October 2009.

Iligan City’s growing traffic congestion is


expected to be eased by a new circumferential
road costing P363.1 million, allowing transfer
of goods to and from the “City of Waterfalls”
to be quicker and cheaper by December next
year.

The Zamboanga West Coast Road, also known


as the Sibuco, Saraway, Siocon, Baliguian,
Gutalac Coastal Road in Zamboanga del Norte
will serve as a backbone link connecting seven
coastal towns and two major cities, namely
Zamboanga City in the south and Dipolog City
in the north. Construction is still in its early
stages as of May 2008, but the government is
targeting to finish by December next year at a
cost of P3.65 billion, which will make it easier
to transport the area’s major products – yellow
fin tuna, corn, coconut and rice.

In Davao, the strongest geographical region


of Mindanao, a major P6.84-billion road
project will rehabilitate 448 kilometers of
road straddling Surigao del Norte, Surigao
del Sur, and Davao Oriental. The project
has been divided into six sections, namely
Bacuag-Claver, Marihatag-Hinatuan-Bislig,

The 2008 PBD Yearbook I 41

DBP Yearbook Inside Rev3 (Final)41 41 12/22/08 5:26:29 PM


Manay-Mati, Cortez-Tandag-Marihatag, In Misamis Oriental in the northern part of
and Bislig-Manay. As of end-May 2008, Mindanao, a totally new international airport
the 66.65-kilometer Manay-Mati section in is being built in Laguindingan. Airlines are
Davao Oriental is almost complete (90%), expected to start using the airport by January
and the whole project should be completed 2012, providing people and goods access to
by June 2010. The Davao region, which has Cagayan de Oro City and Iligan City. It will
traditionally been agri-based is morphing replace the existing Lumbia Airport in Cagayan
with amazing speed into a center for agro- de Oro and will be the first international airport
industrial business, trade and tourism because in Northern Mindanao. Other areas that will
of its bananas, pineapples, fresh asparagus, benefit are five coastal towns in Lanao del
and fish products that are exported to different Norte, El Salvador City and Gingoog City of
countries, especially to Brunei Darussalam and Misamis Oriental.
parts of Malaysia and Indonesia.
Three other airports are also being rehabilitated
To link Tubod, Lanao del Norte and Tangub and improved, one in Ozamis, another in
City in Misamis Occidental, which has the Pagadian and the last in Zamboanga del Sur,
biggest area of brackish-water fishponds in costing the government a total of P987.46
the region and is famous for seafood, the million.
government is also constructing the P4.45-
billion, 2.36-kilometer Panguil Bay Bridge. As for seaports, two major projects costing
Based on the plan, the bridge will allow P995.49 million are expected to contribute
unimpeded flow of goods and services between to the super region’s competitive edge in
Lanao del Norte and Misamis Occidental. agribusiness. The Cagayan de Oro port in
Misamis Oriental should be fully operational
Airports and sea ports by February 2009 with a better back-up area
for the newly constructed wharf.
Aside from road networks, airports are also
one of the major components of the Arroyo The Davao Port in Sasa, Davao City will
administrations infrastructure plan for the cost P422.62 million and is expected to be
Mindanao super region. Nothing delights a completed by January next year.
businessman or investor more than modern,
efficient and well-maintained airports. Irrigation and power
Government has seven airport projects for
Mindanao to transport people and produce In an agribusiness zone, water and power come
from the region to the Luzon Urban Beltway, together to improve yield. Irrigation projects in
costing P9.802 billion. the Mindanao super region is seen to expand
the country’s palay production by 302,851
The Butuan Airport’s timetable shows it should metric tons.
have been done by September 2008, but the
project has been delayed. Improvements were The Kabulnan Irrigation project straddles
made in the runway extension, widening, Maguindanao and Sultan Kudarat, costing a hectares, which should benefit 18,000 families
asphalt overlay, air navigation facilities, airfield huge sum of P13.52 billion and expected to and increase palay production by about
lighting system and the terminal building. be completed by December 2012. It will have 138,851 metric tons.
the capacity to irrigate 20,000 hectares of
Cotabato Airport is expected to be completed land, boosting palay production by 109,795 Power and electrification has been major
in February 2009, at a cost of P302 million. metric tons annually. Documents from the problems in this huge super region. Although
Some of its components like the supply and National Economic Development Authority the 210-megawatt Mindanao coal-fired power
installation of the O-shaped carousel conveyor, (NEDA) show it should benefit up to 10,000 plant by the National Power Corp. in 2006
relocation of runway lights, rehabilitation farm families in the area and allow the provided adequate power supply until this year,
of the terminal building and air navigation fisheries sector to benefit from the 610-hectare government forecasts that Mindanao will need
facilities were still in the bidding process as of water surface area of the reservoir. On top of additional capacity of 100 megawatts.
end-May 2008, but the asphalt overlay of the that, it will generate up to 66 megawatts of
runway and its widening has been completed. hydroelectric power. Government is already The Arroyo administration is, thus, preparing to
looking for funds for this massive irrigation spend P29.22 billion on nine electrification and
Dipolog’s airport also got a facelift to the project. power projects to meet this rising demand.
tune of P353 million. The project involved
shore protection, asphalt overlay for the Aside from this, 119 small irrigation projects The P16.27-billion 210-MW clean coal-fired
runway and widening, a perimeter fence, a have already been funded in 2007, while power plant, constructed under the build-
better administration, terminal and fire station 141 are still undergoing restoration and operate-and transfer scheme and currently
buildings, and air navigation facilities. rehabilitation. All told, they cover 16,933 operated by STEAG State Power Inc., was built

The 2008 PBD Yearbook I 42

DBP Yearbook Inside Rev3 (Final)42 42 12/22/08 5:26:31 PM


to increase the energy supply of Mindanao by The Agus 3 yydroelectric power plant in kV). All the portions are under right-of-way
generating an additional 210 megawatts (MW) Pantas, Lanao del Norte is a P1.68-billion acquisition for the power sites and stringing
of electrical capacity. It currently supplies project. The Lanao Hydropower Corp. has sections. The whole project will be completed
20.61% of Mindanao’s total generation mix. created a special purpose company, the Agus by June 2010.
Completed and operational in November 3 Hydropower Corp., to implement, construct,
2006, the plant is currently helping stabilize operate, and eventually maintain the power The General Santos-Tacurong 138 kV
Mindanao’s power supply by reducing its generating facility in the long run. transmission line project will straddle the
dependence on relatively expensive oil-based provinces of South Cotabato and Sultan Kudarat
power plants. The P1.90-billion Agus 6 yydroelectric power and cost P1.09 billion. This project, which will
plant units 1 &2 upgrading project in Iligan be implemented by the National Transmission
The solar-powered plant in Cagayan de City shall enhance the power generation Co., is under bidding. The government has
Oro was built at a cost of P265 million capacity of the plant by the time it is completed spent P1 million to initiate the development
and started operations in September in December 2010. The National Power Corp. of Jatropha nurseries in Bukidnon. This shall
2004. The plant, which consists of 6,5000 is currently reviewing bids for the project. help promote biofuels as an alternative energy
polycrystalline silicon-based panels, is located source. Right now, the Philippine National Oil
in Brgy. Indahag, Cagayan de Oro City, By 2009, the P8.01 billion Abaga-Kirahon- Co.’s Alternative Fuels Corp. is conducting a
Misamis Oriental but provides power for Maramag-Bunawan transmission project will technical and economic evaluation of the Zubiri
the municipalities of Jasaan, Tagoloan and establish the backbone transmission system Group’s proposal to assess the feasibility of
Villianueva in Misamis Oriental. The plant is from Northern Mindanao, where the majority establishing nurseries in Bukidnon.
100% emission-free and has no identified threat of the cheap and environment-friendly hydro
to the public’s health. Moreover, the plant’s plants are located, to Southern Mindanao, In Gen. Santos City, P1.5 million has been
operational costs are minimal, as compared to where the bulk of the major industrial and spent on Jatropha nurseries. One (1) production
conventional power plants (i.e., diesel and coal- commercial customers are. The project is sit in Brgy. Calumpang is in operation
fired power plants) since its operation is fully divided into three (3) transmission sections: the while negotiations for site acquisition and
automated, requires only ancillary services for Abaga-Kirahon (138 kV), Kirahon-Maramag development are under evaluation by PNOC-
daily maintenance. (230 kV), and Maramag-Bunawan (230 AFC.

The 2008 PBD Yearbook I 43

DBP Yearbook Inside Rev3 (Final)43 43 12/22/08 5:26:32 PM


The list of projects indeed shows that Zamboanga peninsula accelerated 5.2
The plans for the “construction is crisscrossing Mindanao,” percentage points from almost zero in 2006.
as Arroyo claimed in 2007. Investors and Davao’s per capital GRDP went up to 5% in
Mindanao super region businessmen are hoping all these road networks, 2007 from 2.6% in 2006. ARMM and Northern
are anchored on the airports and seaports will make it easier and Mindanao rose to 2.9% from 1.3% and 5.7%
creation of five major cheaper for the country’s “food bowl” to truly from 4.7% respectively. Socksargen was
supply even Luzon with much-needed produce sluggish, however, and grew 4.4% in 2007,
growth centers that at cheaper rates. hardly budging from 4.2% in the previous year.
would turn central and
As it is, shipping pineapples and other produce “If we can harness the forces of good in
northern provinces into to Hong Kong is cheaper than Metro Manila. our nation, the positive force at work here at
a major transshipment home and those from abroad such as the US,
More importantly, these developments are Malaysia, the OIC and others, we shall prevail
hub; western and hoped to bring a sense of inclusion among in Mindanao with a peace agreement that brings
northern provinces Filipinos living in Mindanao, and put an end to freedom and hope to all Filipinos.
into a fishery and the peace and order problem that has been the
bane of the super region. With this peace, we would reap dividends
mariculture center; the in resources invested in agribusiness, not
northern and eastern Official figures from the National Statistical aggression, to build up, not tear down, the
Coordination Board give hints that these Philippine south,” Arroyo said in 2006.
provinces into an agro- projects are bearing fruit.
forestry and mineral A dream that many, even those who are not the
center; the center The Mindanao super region grew 5.1% in 2007, administration’s allies, also wish will happen
with all the regions of Mondanao registering for the Mindanao super region, proving that the
provinces into an agri- increases in per capita gross regional domestic master plan is indeed more than a “gimmick”
industrial core and the product, with Caraga turning in the best but more of a blueprint for development.
performance. – Ma. Salve Duplito
eastern southwestern
provinces, including
Davao, into an urban
and agri-industrial
center. Businessmen
come in all shapes
and sizes, but they
agree on one thing.
Mindanao’s typhoon-
free land is best suited
for agribusiness. The
land and seas are
ripe with potential;
there are no doubts
about that. It’s just
that the government
and investors have to
fight a different kind
of cyclone that has
ravaged this super
region for years, and
that is poverty and
unrest.

The 2008 PBD Yearbook I 44

DBP Yearbook Inside Rev3 (Final)44 44 12/22/08 5:26:34 PM


The 2008 PBD Yearbook I 45

DBP Yearbook Inside Rev3 (Final)45 45 12/22/08 5:26:37 PM


The 2008 PBD Yearbook I 46

DBP Yearbook Inside Rev3 (Final)46 46 12/22/08 5:26:39 PM


The 2008 PBD Yearbook I 47

DBP Yearbook Inside Rev3 (Final)47 47 12/22/08 5:26:41 PM


The 2008 PBD Yearbook I 48

DBP Yearbook Inside Rev3 (Final)48 48 12/22/08 5:26:43 PM


The 2008 PBD Yearbook I 49

DBP Yearbook Inside Rev3 (Final)49 49 12/22/08 5:26:46 PM


The
bright
lights of
the ‘Cyber
Corridor’

UP-Ayala Land Techno Hub


IN NOVEMBER 2008, President Gloria
Macapagal-Arroyo inaugurated the UP-Ayala
Land Techno Hub on Commonwealth Ave. in
Diliman, Quezon City, a 20-hectare affair that
already has modern-looking structures, two
of which has HSBC and IBM prominently
displayed on one side.

The techno-hub, Arroyo says, is the around $8,000 monthly in revenues from his For these businesses to flourish, the
Philippines’ version of US’ Silicon Valley BPO business. He’s blind. He discontinued government has said it would sharpen
and would be the country’s foremost IT his studies in UP Diliman after an unknown education, training services and career
laboratory, training ground and incubator. gunman shot him in the head and in the chest, advocacy in the areas of IT network and
Arroyo, with Ayala Land president and chief hit an optic nerve and rendered him blind. project management finance and accounting,
executive officer Jaime Ayala and University However, he continued studying at the UP engineering and other related services. It
of the Philippines president Emerlinda Roman Open University to learn all about computers would invest P66 billion in the super region,
“pressed the button” instead of cut ribbons and discovered that with the Jaws screen a princely sum, but something the Arroyo
to signal the official launching and start of reader, he could do what anyone could, or even administration hopes would create jobs for
operations of the techno hubs. better. the country’s growing labor force. From more
than 343,000 employed in the industry in
The area, once home to Ferris wheels and The vision 2007, the National Economic Development
other rides especially during Christmastime, is Authority (NEDA) projects that more than
expected to significantly fuel the information From the point of view of policy makers in 900,000 will be employed in the industry by
and communication technology (ICT) sector’s Malacanang, this is welcome proof that the 2010.
already-bristling growth. The ICT sector creation of a CyberCorridor Super Region
brought in more than $5 billion revenues for in 2006, straddling all the major Philippine “I had coffee with some call center agents last
the economy in 2007, almost one third of islands, was an idea way ahead of its time. Labor Day. Lyn, a new college graduate, told
what the government collected in taxes for me, ‘Now I don’t have to leave the country in
that year and is already a major source of Back then, the vision was to create an ICT order for me to help my family. Thank you.’ I
foreign exchange for the economy. The Arroyo channel—a virtual highway—running over was so touched, Lyn, by your comments. With
administration hopes the industry will bring in 600 miles across the country, from Baguio these structural reforms, we not only found
$6.8 billion in 2008 and that by 2010 the figure City in the North and Zamboanga down south jobs, but kept families intact,” Arroyo said
would reach $13 billion. of the archipelago. during her 2006 State of the Nation Address
before the 13th Congress.
At the ground level, the industry has become “Supported by a $10-billion high bandwidth
a savior for many Filipinos, including Analy fiber back-bone and digital network, the Many others are making decent careers and
Pinaroc, 34, who needed a job to supplement CyberCorridor is home to numerous cyber earning sizable incomes in the industry,
the family income and send her three children service providers that supply expert services especially those who are reaping the gains
to better schools. Analy has never been to in various fields of ICT like BPO, contact from the industry’s shift into knowledge
the United States, but her English is clear centers, animation, medical and legal process outsourcing (KPO). The Philippines
and immaculate. It was good enough for her transcription, software development, e- is known for its highly intelligent workforce,
supervisor, who promoted Analy this month. learning, e-entertainment and gaming, and and KPO offers just the right opportunities
other back office operations (e.g. finance and for managers who used to look for jobs
Then there’s Marx Vergel Melencio, an accounting, human resource development, abroad to work at home and earn more
owner of a small company who rakes in etc.),” a brochure on the super region says. money.

The 2008 PBD Yearbook I 50

DBP Yearbook Inside Rev3 (Final)50 50 12/22/08 5:26:47 PM


KPO offers services higher up in the value This distinctly American culture has made The AAG project will link Malaysia to the
chain like financial capability assessment the call center business and the ICT sector as US via Singapore, Thailand, Brunei, Vietnam,
for mortgage companies, enterprise resource a whole the fastest growing industry in the Hong Kong, the Philippines, Guam, Hawaii
planning, process mapping engineering, Philippines in recent years. According to AT and the US West Coast through an undersea
financial markets, process control, animation Kearney, a top Netherland-based consulting cable system that is not easily disrupted by
and simulation (think Disney and gaming), firm, the Cyber Corridor ranks eighth in the national disasters. The network is owned by
automotive and aerospace design and 2007 survey of preferred ICT destinations in the a consortium that includes the government of
development, writing and content development, world. Brunei, Telstar of Australia, AT & T of the US,
and international financial reporting systems, Bharti of India, CAT of Thailand, PLDT of the
for example—and can thus charge clients The plan Philippines, PT Telekom of Indonesia, Telekom
higher fees. These are not just data entry of Malaysia, StarHub of Singapore, and VNPT
jobs; these are lots of think work for hotshot For the government, the direction appears to of Vietnam.
Filipino MBA holders, software engineers, be well-lighted and clear: the Philippines is
accountants, management engineering experts, already a favored offshoring and outsourcing “The award-winning communications system
and mathematicians. destination, so the Cyber Corridor Super Region will support the rapidly growing business
should spur more of this growth through more process outsourcing and call centers industry in
John Clements International Consultants investments in infrastructure, education and the country and strengthen its bid as the most
says in an article that the country serves as a training. favorable investment destination for BPOs and
fertile ground for KPO firms that deal with call centers,” President Arroyo said during the
engineering design, financial consulting, and In the Arroyo administration’s Medium Term launching for the facility.
medical content and services. Philippine Investment Program (MTPIP), the
government identified the following projects For Arroyo’s Metro-Manila-is-not-the-
“Projections for industry growth for BPOs for the Cyber Corridor: government broadband Philippines pronouncement to actually happen,
is estimated to reach up to US$ 20 billion by network budgeted at P5.1 billion (this has been infrastructure and investments must be spread
2010, compared to US$ 12 billion for KPO,” scuttled due to allegations of graft), the ICT across the regions. The CICT has been trying to
it says. education and distance learning at P11.1 billion, do this through three projects: the PC ng Bayan
the public access and postal program at P3.5 program (which provides cheap computers
According to the Professional Regulation billion, the disaster prevention and Preparedness using open source software), the Community
Commission, the Philippines has over two at P3 billion, the government mass media e-Center Project and the National Broadband
million licensed professionals in 2006. Of and broadcast services at P4 billion, and the Deployment Plan. The last one has been
this number, more than 100,000 are certified technical assistance projects at P221 million. scuttled due to allegations of corruption.
public accountants, over 120,000 are midwives,
there are over 26,000 electrical engineers, Because of the increasing demand for Under the Community e-Center Program, the
electrical and communications engineers, knowledge workers, CICT chair and Cyber CICT began in 2006 the Internet in Schools
as well as chemical engineers number up to Corridor super region development champion (iSchools) projects to wire schools, empower
more than 22,000 each, there are over 16,000 Ramon Sales is pushing for a better education teachers so that they know how to use these
architects, medical technologists number up to system. At present, there are some fears in the computers for a better classroom experience for
over 40,000, while there are more than 95,000 industry it will soon run out of talent, and this students (ICT literacy/competency training for
licensed physicians and over 40,000 dentists. is exacerbated by poorer and outdated curricula teachers, lab management, sustainability), tech
even in top schools in Metro Manila. support, and monitoring and evaluation. So far,
Official government figures also show that there are 1,671 high schools with connectivity,
the Philippines has a skilled labor force of The answer: the National English Proficiency spread out all over the country.
29 million people. There are 350,000 tertiary Program being implemented by the Department
level graduates every year and 36,000 of of Education and the Commission on Higher There are eCare Centers (target is to have
these graduate from ICT-related degree Education, the distance learning program to one per region) specially designed to provide
programs like computer science. Around be implemented by the DepEd; and training access and training programs for persons with
100,000 receive degrees in commerce or for work scholarship project implemented by disabilities (PWDs).
business administration. The META Research TESDA.
Group has ranked the Philippines eighth Then there’s the eLGU CeCs to enable local
among knowledge workers from 47 countries When it comes to setting up capital-intensive government units to deliver services more
back in 2000. Rubin Report also ranked infrastructure, government encourages efficiently, while providing their respective
the Philippines number one producer of partnerships with the private sector and constituents with access to the Internet and
knowledge workers. persuades local government units to also pick up other ICTs. The project also recognizes
the tab when necessary. model websites and best practices in the local
Another thing that makes the Philippines a hot government to encourage replication of useful
outsourcing destination: Filipinos are more In May 2007, for example, the ICT sector got a and innovative applications.
attuned to Western culture than most Asians. boost from a 20,000 Asian American Gateway
Few in this country appreciate a touchdown but (AAG) fiber optic cable network in Bauang, La The CICT also hopes that regional ICT
most understand what a three-point shot can do Union in Northern Luzon, providing a boost to Centers will spur regional development
to a basketball game in the last three minutes. the Cyber Corridor dream. through the use ICT in education, commerce

The 2008 PBD Yearbook I 51

DBP Yearbook Inside Rev3 (Final)51 51 12/22/08 5:26:49 PM


and governance and spearhead the building can allow their backroom operations in A recent survey by the Business Process
of local e-marketplaces or one-stop-shops for the Philippines to answer calls from their Association of the Philippines (BPAP) and
e-commerce, e-learning and e-government customers at a quarter of the cost. AOL is a Outsource2Philippins (O2P) and managed
services. major example. by strategic marketing communications firm
TeamAsia, shows that 65% of respondents
Accounting, data entry and payrolls of felt that 2009 prospects were “excellent to
companies in the US were done by staff in outstanding” given the shift in the industry to
The ICT sector Quezon City. In 2003, Forrester Research, a higher-value services.
technology research company in Cambridge,
brought in more Massachusets, predicted that by 2017, 3.3 BPAP expects to grow 35% to 40% this year,
million back-office jobs in the US will migrate and 40% annually until 2010, to employ around
than $5 billion to other countries, including China and Russia. one million people from 300,000 at present.
The Philippines is widely expected to get
revenues for bigger, and bigger slices of that pie. There are some early signs that this optimism is

the economy
not just a sick man’s last grasp for hope. StarTek
Companies outside Metro Manila have based in Denver, Colorado, is expanding

in 2007, almost discovered that the industry is like a gold mine.


Davao, Metro Cebu, Subic, Bacolod, Clark in
its workforce in its first facility in Makati
City to provide customer care, sales support,

one third of what Pampanga, among others, had been abuzz with
the golden opportunities. Arroyo has just given
complex order processing, accounts receivable
management, among others. It operates 21

the government a directive to Sales to create an ICT hub in


every province, enabling it to house at least one
facilities in North America and the Philippines.

collected in taxes call center. Major player Oracle says the financial crisis
will force US firms to keep their best talents
for that year “We need to wire the entire country to
attract more BPO and hardcore technology
and find out how to maximize their employees
well, a trend that augers well for human
and is already a companies, and help train young Filipinos
into world class workers in programming,
resource software programmed in places like
the Philippines. Citigroup, which has been
major source of embedded technologies and network
engineering,” she said in a speech at the UP-
bailed out by the US government, says it
will expand its workforce in the Philippines,
foreign exchange Ayala Techno Hub. picking the country as its hub for its BPO
operations.
for the economy. Even real estate companies have been getting
in on the action. They are capitalizing on Convergys will be opening and staffing five
The Arroyo the ICT boom by building structures that new facilities. The first facility, Cebu Asiatown
are uniquely designed for ICT firms. Cyber i3, was opened in September. Two more sites
administration parks have sprouted all over the country, are scheduled for opening in December—UP

hopes the
with many aspiring for tax incentives Science Ayala Park and Nuvali in Laguna. In
from the government—and getting them. April 2009, the Glorietta 5 facility in Makati

industry will bring Telecommunications companies like ePLDT


found a growing demand for broadband. As
and San Lazaro in Manila would likewise be
opened. That will make 15 facilities from just

in $6.8 billion in a result, mother company PLDT’s stock rose


from P300 to more than P3,000 per share at the
one in 2003.

2008 and that, by beginning of 2008. London-based outsourcing firm Logica has
said in early November that it would double
2010, the figure Then the US economy collapsed dragging the
rest of the world with it and created a cloud of
its workers by end-2008 from 400 to 800.
Curiously, Logica is currently in a restructuring
would reach $13 fear that choked everyone, especially those in
the richer parts of the globe. At a time when the
mode and is depending on its operations in
the Philippines to cut down its costs. Logica
billion. world’s biggest countries are in recession, can
the Philippines’ CyberCorridor super region
provides software support for SAP customers
in Europe.
continue expanding as it had in recent years?
The Bank of New York Mellon, a global leader
There are more positive thinkers than in asset management and securities servicing,
Global crisis naysayers. American companies who are not in fact believes it’s the country’s BPO/KPO
in the brink of shutting down are desperate for industry that will help the country weather the
Since Arroyo’s nationwide address in 2006, ways to cut costs—now more than ever—and global financial crisis, mirroring the BPAP’s
it looked like the happy days will never end. these will turn to countries like the Philippines, sentiment that the BPO sector is “one of the
American and European companies have BPO executives, the government and foreign few bright lights amid the gloom and doom of
discovered that cutting edge connectivity analysts say. the global financial crisis.”

The 2008 PBD Yearbook I 52

DBP Yearbook Inside Rev3 (Final)52 52 12/22/08 5:26:50 PM


The picture, of course, is not totally peaches New investors also need buildings suitable to Davao, Dumaguete, Iloilo, Legazpi, Lipa,
and cream. Major call center firm Advanced their operational requirements. The scorecard San Fernando in Pampanga, and Sta. Rosa in
Contact Solutions reportedly retrenched 900 measures the number of existing and planned Laguna.
workers in October 2008. eTelecare, another IT parks or buildings, availability of IT-ready
big contact center, has reported a 17% drop in buildings, three-star hotels or better, and long- All these have passed the scorecard. More
its net income as of September 30. term accommodations for principals. (You cities are in the process of being scored.
don’t want your American counterpart to be
An investors guide sleeping in a hovel). After accomplishing the scorecard, cities and
local governments are required to:
Investors who want to position themselves Vendor support that service
1. Conduct initial educational or priming
for growth in the ICT sector despite the telecommunications, hardware and software activities;
global crunch have five mature sites in the requirements are also included in the scorecard,
Philippines to choose from, namely Metro and even the time needed to get a qualified 2. Conduct a multi-stakeholder SWOT
Manila, Metro Cebu, Clark, Pampanga, Baguio engineer for on-site support is scored (can he analysis workshop;
City and Metro Davao. There are 21 locations be reached within four hours? for example) 3. Accomplish cyber services corridor
with existing strategic ICT plans already and scorecard which assesses key parameters;
the CICT is schedule to conduct scorecard They say it takes a village to raise a child.
4. Have a strategic planning workshop
exercises for 10 more. In the ICT sector, it takes multi-stakeholder with CICT or Department of Trade and
support to have a cyberpark up and running. Industry officials to develop targets, action
The scorecard currently used by the CICT is The scorecard puts much weight on whether plans and roles;
a highly detailed and intricate scoring system the mayor to the governor to the local
5. Implement their plan and evaluate their
developed by the McKinsey group. It provides chamber of commerce is on-board. Having an
progress periodically and modify them if
prospective investors and businesses with a investment promotion body and even non-
needed
highly measurable list of attributes so they government organizations providing support to
can make an informed decision on where they the industry are also plus factors. 6. For the CICT and DTI to present the status
should bring their business. of the new location to the ICT industry.
Most ICT businesses continuously consume
Prospective investors would be interested power 24x7 after launching day, just like any Challenges
to note that score cards use metrics such 7-11 store. Thus, the cost of power, guarantee
as workforce development, presence of of no brownouts, quality and availability of With the lofty goals and vision of empowering
telecommunications facilities, real estate sustainable energy sources are rated highly in the Philippines through the ICT sector, the
development, vendor support, local the scorecard. This is also true when it comes government’s work is cut out for it, and the job
government unit and community support, to availability of transportation for cyber doesn’t look like child’s play. Even after years
sustained power supply, tax incentives, peace services workers, number of flights per day, of continuous growth, the ICT sector still has a
and order, and transportation, among others to and international flights to the area. long to-do list.
help locators or investors determine where they
want to bring their business. The first part is on In keeping with the move to rationalize The demand for knowledge workers has
human capital development and potential as a fiscal incentives, the Philippine government far outpaced supply. More and more ICT
supplier and the second part on infrastructure maintains that quality of labor and companies are finding it difficult to look for
and potential as a location. infrastructure pull in investors more forcefully qualified ICT workers, and the headhunting
than tax incentives. But for companies that business has become highly competitive.
To determine whether investors would have can ensure transfer of technology and locate Telecommunications and transportation
access to a sufficient talent pool, the scorecard in areas outside Metro Manila, the Arroyo infrastructure are still experiencing hiccups
measures workforce development by assessing administration offers tax incentives. These are especially when there is high traffic of
the number of top colleges and universities also part of the scorecard. information going through the wires.
in the area, the presence of bridge program
providers, whether major fields of study are IT- Quality of life, in the scorecard, is measured by More IT Parks and office facilities are still
related, accounting, nursing or physical therapy assessing peace and order, traffic congestion, needed, power in some regions are still
degrees, whether graduates prefer to work in recreational amenities, air pollution, health care expensive, red tape is a continuous headache
the area and whether special programs that help facilities fit for expatriate communities. for companies looking to set up their
graduates to speak English flawlessly and give businesses and in some areas, especially in
them the financial support to do all these things Excluding Metro Manila, there are currently 24 Mindanao, there is a problem with insurgency
are offered. “Next Wave Cities” established as part of the and crime rates.
Philippine Cyber Corridor.
Telecommunications infrastructure is the Yet as they say, the proof of the pudding is in
lifeblood of ICT firms, and the scorecard Out of these 24 cities, 17 currently host the eating. Big players are confident that the
measures the number of telecommunication major offshoring and outsourcing operations, crisis notwithstanding, the Philippines will
providers in the city, fiber-optic capabilities, namely Bacolod, Bacoor, Baguio, Batangas, continue to attract offshoring and outsourcing
bandwidth and whether there is still room for Cabanatuan, Cagayan de Oro, Cainta, companies looking to cut costs, and the Cyber
new entrants. Camarines Sur Province, Cebu, Clark/Angeles, Corridor, is poised for more growth.

The 2008 PBD Yearbook I 53

DBP Yearbook Inside Rev3 (Final)53 53 12/22/08 5:26:51 PM


Rice field

The Rice Crisis

Staving off Starvation


and Instability
By Norman Sison

Three dollars a day won’t get you far at Finally in April earlier this year, like a pot of Even in reasonably prosperous Malaysia, the
today’s food prices. If you live in the United rice steaming on the stove, simmering anger ruling coalition was nearly ousted by voters
States, it isn’t even enough for a gallon of at rising food prices reached boiling point. concerned over soaring food and fuel prices.
gasoline. But that’s what ordinary people in Haitians took the streets and demanded swift In Thailand, which is the world’s largest rice
Haiti make daily. government action, setting up roadblocks, exporter, supermarkets placed signs limiting
looting stores, burning tires, battling with the amount of rice that shoppers were allowed
So when food prices steadily went up by at police and troops, and attacked the presidential to purchase.
least 40% beginning in 2007, it didn’t take palace.
much to connect the dots and predict where the The riots in Haiti and elsewhere were a clear
situation was heading. Not long after Haiti, similar protests or lesson that government leaders in other
street demonstrations flared in Burkina Faso, countries—especially in developing countries
After all, when inflation goes up and incomes Cameroon, Cote D’Ivoire, Egypt, Indonesia, like the Philippines—understood only too
remain stagnant, something’s got to give way. Mozambique, Uzbekistan and Yemen. well.

The 2008 PBD Yearbook I 54

DBP Yearbook Inside Rev3 (Final)54 54 12/22/08 5:26:52 PM


At least 70% of the nation live below the in six assistance packages, which are the However, the Philippines needs to import
poverty line, with poor Filipinos living on a essential ingredients in making food abundant, at least two million metric tons annually to
dollar or two a day. accessible, and affordable.” maintain a two-month stock as a buffer against
shortage. So if there is no shortage, why is
Based on a poll of 1,200 household heads In line with the Filipino penchant for an agricultural country like the Philippines,
across the country conducted last June 27-30 shortcutting names with acronyms, the once a rice exporter in the 1970s and home to
by Social Weather Stations, about 2.9 million program, dubbed FIELDS (short for fertilizer, the International Rice Research Institute, the
Filipino families or 16.3% had no food on the irrigation and infrastructure, education and world’s top rice importer?
table at least once in the past three months extension, loans, dryers and other post-
due to soaring food prices, up from 15.7% in production facilities, and seeds and other Dy’s estimates, based on figures from the
March and higher than the 10-year average genetic materials), hopes to solve the country’s National Food Authority, pegs Philippine rice
hunger rate of 12.1 percent. perennial rice shortage once and for all. consumption from 122 kilos per person in 2002
to 134 kilos today.
Politics of food Of the P36.6 billion set aside for the new
agriculture program, P500 million would go But Dy emphasizes that the biggest factor,
Jeffrey Sachs, an economist and special adviser to organic fertilizer production, P12 billion which other experts are also pointing out, is
to United Nations Secretary General Ban for irrigation and infrastructure, P2 billion for the inability of more and more people to afford
Ki-moon, said soaring food prices worldwide research and development, and P3 billion for the staple. He says the situation is “really an
is the “worst crisis of its kind in more than 30 educating and training. At least P2 billion will income crisis” rather than a simple supply-
years.” go to building rice and corn processing centers demand problem.
and P8 billion for procuring seeds. Almost half
President Elías Antonio Saca of El Salvador of the funding, P15 billion, will be earmarked “The primary reason is the low purchasing
called it a “perfect storm” at a meeting of the for loans, benefiting at least 200,000 farmers. power of the masses,” Dy outlined in a paper
World Economic Forum in Cancún, Mexico. issued in March, caused by the government’s
Leadership failure failure to reduce the wrenching poverty in the
Sachs predicted “more political fallout to country.
come” unless the situation eased soon enough. Driving north from Manila on the way to the
Fearing protests, Indonesia revised its 2008 Ilocos region or vice versa, the rice fields With the cost of fertilizer also going up, it
budget and increased the amount to be spent are ripe for harvest. To avoid being slowed seems unlikely for the prices of rice and other
on food subsidies by about $280 million. down in bustling Urdaneta City, Pangasinan, farm produce to go down in the near future. Dy
motorists can detour by taking a two-lane said the huge demand for fertilizer in Brazil,
In the Philippines, the Arroyo administration cement road that leads to Asingan. But because due to its hard push into the production of
contracted rice imports in advance, spending of the lack of drying facilities, farmers use one biofuels, is pushing fertilizer prices up. “The
almost P59 billion. President Arroyo phoned lane of the road during harvest time to dry their days of cheap fertilizer are gone,” he says. “It
Vietnamese Prime Minister Nguyen Tan Dung golden brown palay. will be difficult to establish food security if
herself to purchase 1.5 million tons of rice. farmers don’t have enough access to fertilizer.”
However, the practice forces irate drivers
The Philippine move was the result of two to carefully move to the shoulder to avoid Adding to the problem, the Philippines suffers
factors. One, Thailand, which produces 10 collisions and avoid falling into the paddies from a lack of large land areas suitable for rice
million more tons of rice than it consumes, as well or to just drive over the grain and get paddies like the Mekong delta in Vietnam.
moved to limit its rice exports. Two, Thailand back on the lane after an oncoming vehicle has This problem could be offset if government
and other rice exporting countries briefly passed. improves productivity by investing in
toyed with the idea of forming a cartel similar agriculture and support infrastructure like
to the Organization of Petroleum Exporting The lack of agricultural facilities is one of irrigation, roads and research and development.
Countries, raising the possibility of even higher several factors that Rolando Dy blames for
food prices. the rising price of rice. This is a result of Dy also blamed chronic corruption, which had
decades of “under-investment in agriculture resulted in substandard farm roads and lack of
In early April, the national government hosted and infrastructure,” says Rolando Dy, dean of agriculture infrastructure.
a conference at the Clark Special Economic the University of Asia and the Pacific’s School
Zone in Angeles City, Pampanga, and unveiled of Management and concurrent executive Folly of complacency
a P36.5-billion agriculture program to counter director of the university’s Center for Food and
the looming food crisis. This was on top of the Agribusiness. The Philippine government isn’t alone in its
P5 billion in subsidies set aside for farmers and shortsightedness.
an additional budget of almost P3 billion given In her State of the Nation Address in July,
to the Department of Agriculture and meant for President Arroyo said domestic rice production In the 1960s, population growth outpaced food
boosting rice and corn production. had been growing by an average of four supply in Asia, raising the threat of starvation
percent annually since 2002. She took care to in poor countries. Wealthy nations stepped
“We must work harder to grow and breed point out that the figure was growing faster in and poured billions of dollars into crop
what we need,” Arroyo told delegates. “We than the country’s annual population growth research to improve yields and to avoid a
are going to cluster our food production drive rate, currently at two percent. looming hunger crisis.

The 2008 PBD Yearbook I 55

DBP Yearbook Inside Rev3 (Final)55 55 12/22/08 5:26:53 PM


By the next decade, the resulting food self- In 2001, rice traded on the international In Australia, a six-year drought blamed on
sufficiency eventually became known as the market at $300 per metric ton. These days, it’s global warming is forcing a giant rice mill to
Green Revolution and the threat of starvation between $500 and $700 per ton. In January shut down, taking off 20 million tons from the
faded by the 1980s. this year, the Philippines was buying rice at world export market.
nearly $500 per ton. It has gone up by at least
So did most funding for crop research from 40% since then. Another is higher crude oil prices, which
wealthy nations in the 1990s. That included resulted in higher transportation costs,
money for the International Rice Research The upward price movement during the past especially for countries that import rice. It
Institute (IRRI), one of 14 institutes in a global seven years, according to the IRRI, indicated also pushed up at least the cost of transporting
network of research centers left as a legacy that “we have been consuming more than we fertilizer.
of the Green Revolution. Known collectively have been producing.”
as the Consultative Group on International “Rising oil prices and concerns about climate
Agricultural Research, the centers focus on The higher consumption was due to growing change have also spurred rapid investments,
improving crop yields and food production in population in Asia. “Population growth is particularly in developed countries, in biofuels
developing countries. outstripping production growth and this is such as ethanol produced from maize grain
projected to get worse. Demand for rice in Asia or biodiesel produced from oilseeds. This
“Rice prices declined steadily in the 1990s, is expected to continue to rise as its population has increased pressure on international trade
leading many governments to believe that expands. of grains and livestock feed as well as on
the supply of food was plentiful. Lower agricultural land in some countries. Until
prices were taken for granted, leading to Even after allowing for some decrease in per now, the direct impact of biofuels on rice
complacency in agricultural research and capita rice consumption in Asian countries
development,” according to a 12-page paper with higher income levels, it is projected Rolando Dy, Dean of the University of Asia
issued earlier this year by the IRRI, based that in 2015 Asia will need to produce 38 and the Pacific’s School of Management.
in Los Baños, Laguna, to explain what’s million more tons of rough (unmilled) rice
happening around the world. than it produced in 2005. Globally, demand production and rice trade has likely been small.
is increasing by around five million tons each However, if the industry continues to grow, rice
Then came a host of other factors, both short- year. This means that in 10 years, the world production and prices may be affected more
and long-term, that eventually orchestrated will need to produce 50 million tons more than seriously,” the IRRI paper warned.
a worldwide crisis by the turn of the it does now.”
millennium: growing population, declining With supply now threatened, major rice
crop yields, lack of areas for farm expansion, This was compounded by gradual decreasing exporting countries imposed export restrictions
failure to develop agriculture, skyrocketing crop yields, which the IRRI said, has to protect their domestic consumers and ward
crude oil prices, extreme weather believed to “decreased substantially” over the past 10-15 off possible foot riots.
be caused by global warming, and recurring years in most countries.
pest outbreaks. “These restrictions have further contributed
In South Asia, average yield growth decreased to the recent increase in rice price as the rice
As in the 1960s, the foremost factor is, again, from 2.14% per year in 1970-1990 to 1.40% supply in the world market has dwindled.
rising population. “The poorest of the world’s per year in 1990 to 2005.
poor are the 1.1 billion people with income of While exporters are holding on to their stock
less than a dollar a day. “In the major rice-growing countries of Asia, of rice, importers are rushing into the market to
yield growth over the past five-six years has buy more rice to meet their consumption needs
Around 700 million— almost two-thirds—of been almost nil. Globally, yields have risen by and to build their own stock. Hoarding by
these people live in rice-growing countries less than one percent per year in recent years,” traders for speculative purposes has added fuel
of Asia. Rice, the dominant staple in Asia, the IRRI paper stated. to the fire in some countries.”
accounts for more than 40% of the calorie
consumption of most Asians,” according to the The IRRI attributed the decreasing crop yields From plenty to want
IRRI. to a number of factors.
Ironically, the food surpluses during the 1970s
“Poor people spend as much as 30-40% of Among them is extreme weather due to to the 1990s eventually led to a worldwide
their income on rice alone. Ensuring sufficient global warming. “Global temperatures, crisis that experts now say would need a
supplies of rice that is affordable for the poor particularly night-time temperatures, have second Green Revolution to solve – and this
is, thus, crucial to poverty reduction. steadily risen in recent decades because of time with sustained attention.
increasing greenhouse gas concentrations in the
Given this, the current sharp increase in rice atmosphere. Some evidence suggests that rising A case in point is the International Rice
price is a major cause for concern.” temperatures may have already contributed to Research Institute, which saw much of its
lower rice yields in recent years, but a thorough funding disappear.
Thanks to the Green Revolution, higher global assessment is yet to be conducted.
crop yields led to lower rice prices. But the Further, human-induced climate change is Money comes from government donations,
decline ended in 2001. Prices rose and sharply expected to increase the severity and frequency private grants and aid from international
increased in the first quarter of 2008. of extreme weather events.” development institutions.

The 2008 PBD Yearbook I 56

DBP Yearbook Inside Rev3 (Final)56 56 12/22/08 5:26:54 PM


Planting rice

“Public spending on agricultural research Korea, and Japan, particularly in growing talk of increased funding, but we haven’t seen
in Asia grew by an average of 3.9% per seasons with abnormally higher temperatures. much of it yet,” says IRRI spokesman Adam
year during the 1990s, compared with 4.3% In Vietnam, planthopper and virus outbreaks Barclay. “We have been told that USAID
annually during the previous decade. In 2000, were a major reason behind the government’s (United States Agency for International
overall public research intensity, measured by decision to restrict rice exports,” according to Development) will reverse its decision to
the percentage of agricultural gross domestic the IRRI paper, which also attributed the higher significantly cut funding to IRRI and the
product invested in public agricultural seasonal temperatures to global warming. other Consultative Group on International
research, remained low at 0.53 for developing Agricultural Research centers. We don’t have
countries as a whole,” according to the IRRI Jacques Diouf, director general of the Food any figures yet, though.”
paper. and Agriculture Organization of the United
Nations, estimates revitalizing the world World Bank president Robert B. Zoellick
Even if the institute gets adequate funding now, agriculture could run up to $30 billion a year. impressed on the Mexico conference that the
solving the worldwide food crisis could take a crisis was “man-made” catastrophe. “It does
few years. Combating the brown planthopper “The problem of food insecurity is a political not take complex research. We know what has
pest problem, for instance, could take four to one,”’ he said during the June conference held to be done,” he said in his prepared speech.
seven years, according to experts. in Mexico, criticizing wealthy countries for “We just need action and resources in real
cutting funding on agricultural programs meant time.”
A brown planthopper outbreak could destroy to feed the world’s poor. “It is a question of
20% of a harvest and they are currently priorities in the face of the most fundamental of Earlier this year, the Asian Development
multiplying by the billions throughout the human needs. And it is those choices made by Bank pledged to support the IRRI and other
region. The IRRI could create rice varieties governments that determine the allocation of institutions in efforts to boost productivity.
resistant to the insects, which live only on rice resources.”
plants, but the institute lacks the funding. Work Haruhiko Kuroda, president of the ADB,
on rice varieties that could prove crucial in World leaders are now rushing to act. In May, blames the food price surge on several “short-
coping with global warming had to be dropped US President George W. Bush asked Congress term cyclical and long-term structural factors”
as well. for $770 million to help boost agricultural outlined by the IRRI.
productivity in poor countries.
“Since 2005, planthopper outbreaks have He also attributed part of the blame on Asia’s
affected several million hectares of rice land in However, the IRRI has yet to receive the developing economies, saying that improving
countries such as Vietnam, China, Indonesia, needed financial boost. “There has been much incomes have resulted in more and more people

The 2008 PBD Yearbook I 57

DBP Yearbook Inside Rev3 (Final)57 57 12/22/08 5:26:56 PM


eating meat, which, in turn, are pushing the For the medium and long term, the ADB will
price of food and feed grain. provide funding for vital infrastructure—rural
Based on roads and bridges, rural electricity, irrigation,
“Looking at the supply-demand dynamics, among others— to boost agricultural
figures from we believe that the era of cheap food is over,” productivity.
Kuroda wrote in a May opinion-editorial to
the National the Wall Street Journal, warning that over
a billion people in Asia alone are “seriously
Gauging from its current project pipelines, the
ADB estimates that up to $4.7 billion would

Food Authority, affected” by the surging food prices. need to be invested in agriculture across Asia in
the next two years.

Philippine rice The ADB estimates that up to 60% of average


incomes goes to food; up to 75% if you include Over 70% is expected to go to financing rural
the cost of energy such as gasoline, which is infrastructure development. Kuroda expects
consumption partly pushing food prices up. at least $2 billion to be spent on boosting
agriculture in 2009 alone.
has increased For the short-term, Kuroda believes that
“targeted income- and cash-support measures The IRRI estimates that the world would need
from 122 kilos are more effective” in helping the poor cope to produce an additional 50 million tons of
with the situation. rice annually, or nine percent over current
per person in “Through targeted support to the poor rather
production, to meet projected demand. Asia
alone is expected to account for 58% of rice

2002 to 134 than general price subsidies, governments will


be able to focus on the truly needy and ensure
consumption.

kilos today. But better coverage, as well as free up resources


to boost much-needed investment in the farm
“The best strategy for keeping the price of rice
low is to ensure that production increases faster
sector,” he wrote in the Journal. than demand,” the IRRI stated in its paper.
University of
Even those living just above the poverty line “To achieve this, a second Green Revolution
Asia and the may not be spared. is needed now as much as the first Green
Revolution was needed to avoid famine and
Pacific’s School An increase of 30% in food prices would mass starvation.”
increase the number of poor by an additional
of Management nine million in the Philippines alone. However, with land being continuously lost
to urbanization, industrialization and biofuel

dean Rolando If food prices continue to rise beyond the reach


of the poor, Kuroda says, the situation could
production, among other things, the IRRI
doubts that Asia’s rice areas could be expanded

Dy emphasizes erase gains made in the past years to ease much


of the wrenching poverty in Asia by 2015 as
from the current 136 million hectares to meet
future demand.
set by the United Nations in its Millennium
that since more Development Goals. “The main source of additional production will,
therefore, have to be yield growth.” Global
and more people In a paper issued in July, the ADB announced average rice yields must continue to increase
that its short-term response would be to by an annual rate of at least 50 kilos per hectare
are unable to strengthen “targeted safety nets” aimed at or 12% above current levels to keep pace with
helping the poor such as cash transfers, food- the demand.
afford the staple, for-work, food stamps and school feeding
programs. In its paper, the IRRI outlined a list of

it is more than Already, the ADB has sent missions to several


short and long-term measures: investing
in agricultural research and infrastructure,

income crisis Asian countries seeking assistance to map


out measures in collaboration with other
develop a new generation of rice scientists
and researchers, strengthening safety nets for
development institutions such as the World the poor, accelerating use of higher-yielding
rather than Bank and the International Monetary Fund and rice varieties, and changes in government
the Food and Agriculture Organization of the policies.
a simple supply- United Nations.
Nations “must invest now” in agriculture, the
demand problem. The ADB will provide up to $500 million to institute warned, to avert a worldwide crisis.
finance its short-term support for the hardest- “Rice production can be revitalized, but there
hit countries. are no silver bullets.”

The 2008 PBD Yearbook I 58

DBP Yearbook Inside Rev3 (Final)58 58 12/22/08 5:26:57 PM


The 2008 PBD Yearbook I 59

DBP Yearbook Inside Rev3 (Final)59 59 12/22/08 5:26:59 PM


Tourism estates rake it in
By Emmie Abadilla

Property markets elsewhere in the world residential condominium rising in Makati City. Metro Manila has been earmarked for new
have slumped but that of the Philippines “We expect 18,143 units from 28 upcoming O&O facilities this year, with 189,614 square
continue to flourish. Despite difficult times and residential condominiums to be completed meters already pre-committed before start of
skyrocketing fuel costs, local developers and between 2008 and 2013. Likewise, in Fort construction. “Offshoring and outsourcing
buyers see the country as one of the hottest real Bonifacio, 11,652 units will come into the will continue to drive demand for real estate,
estate hubs in Southeast Asia to date. market from 33 residential condominiums particularly in the office space market.”
being constructed in the same period,”
“Investment opportunities in real estate, Frankum says. Tourism estates
tourism and infrastructure remain high in this
country,” stresses property services global BPO boom Significantly, the country’s biggest developers,
leader CB Richard Ellis (CBRE) Philippines which had shied away from mega-tourist-
general manager Trent Frankum. “Foreign The offshoring and outsourcing (O&O) oriented developments for a long time, have
investors are looking at the positive effects of boom in the Philippines has created further made the plunge and are now reaping profits.
the stable Philippine peso, increasing tourist opportunities for the real estate market,
arrivals, the business process outsourcing Frankum points out. “Major investors and Everyone has ventured into multi-billion peso
(BPO) boom, and the positive effect of businesses are looking at the Philippines tourism real estate and leisure community
overseas Filipino worker (OFW) dollar because it is one of the largest English- projects, from Ayala Land Inc. (ALI) to SM
remittances.” speaking nations in the world and has 33.5 Investments Corp., from tobacco tycoon Lucio
million Filipinos in the workforce.” Tan’s Eton Properties Phils. Inc. to the state-
Last year, tourist arrivals broke the two-million owned Philippine Amusement and Gaming
mark for the first time since 2004, with arrivals Already, major multinational BPO operators Corp.
rising to 3.091 million. CBRE expects new are expanding their presence in the Philippines.
markets, such as Russia, Middle East, China, Accenture leased 1.3 million square feet. The slump of property markets overseas has
and Korea, to sustain tourism growth. CBRE Teletech, which has six facilities in Metro not dampened the luxury property sector either.
also projects arrivals will increase to 3.4 Manila, is starting to build call centers outside “We even registered stronger sales in Middle
million this year and generate US$5.8 billion in the metropolis. East and Asia for this year. The domestic
international tourism receipts. real estate market has been quite good. The
In addition, major financial companies such as Philippines continues to grow 6 to 7%, so the
In addition, hotel room occupancy rates rose to HSBC, Citigroup, and JPMorgan are enlarging market is still strong and demand-driven,” ALI
73.06% in 2007 from 71.95% in 2006. “New the Philippine sites of their customer support president Jaime Ayala pointed out mid-year.
hotel and resort developments are currently operations. Hongkong Shanghai Banking Corp.
in strategic business locations such as Makati (HSBC) currently has four locations, which Increasing prices has not stood in the way of
City, Fort Bonifacio, and the Bay Area as well total to 859,200 square feet, and plans to open sales either, considering that local construction
as top tourist destinations such as Cebu and more sites. Citigroup and JPMorgan, on the costs are shooting up by more than 35% this
Boracay, further enhancing industry prospects,” other hand, have 214,812 and 107,400 square year due to record price increases of oil, steel,
he points out. feet of space leased, respectively. cement and global shipping on the back of the
devaluing American dollar.
The projected number of tourists arriving “Third party BPOs are not stopping in their
in 2008 is set at more than 3.4 million, the expansion, with a handful such as Convergys, As a result, developers have immediately
majority of whom will pass through the IBM, Sykes, TeleTech and People Support slapped at least 20% increases for pre-
National Capital Region, Metro Manila, and already securing more sites in the country,” construction projects and 15% price
some 30% or 1.02 million will use new direct Frankum noted. adjustments corresponding to the rise in global
flights to the Mactan-Cebu International construction costs over the next six months.
Airport as their entry point to the Philippines. Other major O&O service providers continue
to develop sites in Metro Manila and Metro Nearly all construction materials used for
New development projects include the US$153 Cebu. According to CBRE research, a total building Philippine high-rise buildings are
million Kingdom Hotel, a combined hotel and of 731,871 square meters of property in imported. Exporters of steel reinforcement

The 2008 PBD Yearbook I 60

DBP Yearbook Inside Rev3 (Final)60 60 12/22/08 5:27:01 PM


bars, electrical wirings, aluminum, copper- investors want to replace failed pension specialists, David Stanley Redfern Ltd., PLC’s
based components and Portland cement plans and other saving schemes with solid UK-based marketing partners, expect the
from China, Korea, Malaysia and Taiwan are investments in real estate. The savvy ones Philippines’ real estate sector will sustain at
expecting over 40-50% price increases due to look for investments that will earn them a least a 24% per annum growth for the next five
the depreciation of the US dollar combined monthly income for their retirement. Our hotel years.
with record high oil prices which is constantly rates, for example, are the same, if not more
pushing up shipping costs. expensive than those in the US or Europe, but Reliable OFW money
the entry level to purchase real estate is only
Nevertheless, all these will have minimal effect Surprisingly, many European investors have
on the industry in general and even less effect not yet discovered the potentials of the
on the current market base. Philippine real estate market. But that is not

“If you know your trade, if you are offering a


Everyone has even a cause for worry. Dollars from overseas
Filipinos alone can sustain a property boom
good product, the market is here to stay. Real
estate markets go in 10 year repetitive cycles.
ventured into good for the next half decade, according to
industry experts.
We had far worse time in the past two cycles
during the late ’80s and the Asian financial
multi-billion At present, real estate purchases account for as
crisis near the end of the ’90s compared
to today,” says Beth Collingz, overseas
peso tourism much as one third of around $14 billion foreign
remittances from OFWs per year. Overseas
marketing director of PLC (Pacific Concord
Properties) Global, lead marketing partners
real estate workers and their families no longer splurge
on consumer goods as they did in the past. And
for the Lancaster brand of condo hotels in the
Philippines.
and leisure they acquire property for their own use, not for
speculation.

At the time, they only had a very limited


community Equally significant, the current crop of OFWs
market base with Philippine real estate
investors confined to wealthy local Chinese
projects, from are mostly professionals such as nurses and
information technology people. Gone are the
businessmen. Few owned cellular phones and
mobile technology has not come into fashion.
Ayala Land semi-skilled and unskilled workers, laborers,
factory workers and domestic helps that the
The internet was not even around yet and
communication was limited to sending a fax
Inc. to SM country exported in the 1990’s.

offer to buy properties. Investments The shift to savings and investments came
two years ago when OFW remittances started
When mobile telephony and electronic mail
came of age, “The whole world suddenly
Corp., from to pick up, confirmed Century Properties
managing director John Victor Antonio.
became our market in the new millennium,”
says Collingz. And her company’s sales from
tobacco tycoon “Up to 70% of all our online inquiries come
some 10 million Filipinos abroad, combined
with foreign investors from Asia, Europe and
Lucio Tan’s Eton from abroad. Overseas Filipinos want to stretch
the value of their dollars, so they buy properties
the Middle East, continued to climb. Properties Phils. here,” he explains.

“Today’s technology, unheard of 15 to 20


years ago, is the heart of our sales campaign.
Inc. to the state- Half of Century Properties’ total sales come
from OFWs although the figure could go as
Now, I receive daily calls and emails from
buyers in Australia, Hawaii, New York, Doha,
owned Philippine high as 60% of all sales in other firms.

Dubai and the UK. I even get calls from clients


located in Fiji and Mauritius. Communication
Amusement and “About 30% of all remittances end up in
spending for the real estate sector, whether it
drives the sale of Philippine real estate upwards
through 2008 well into 2012 and beyond,” she
Gaming Corp. is used to buy or property or spent on housing
improvement.”
says.
Hence, developers, from ALI and Century
Although the property purchases of some Properties to Megaworld Corp. and Robinsons
Filipinos based in the US plummeted because 10% of what they have to pay for a studio in Land Corp., are now jumping on the
of the credit crunch, it is not enough to slow Manhattan, credit crunch or not. So, investing bandwagon, courting OFW buyers, going on
down the industry. here is ideal.” road shows all over U.S. and Europe, with
some establishing overseas sales offices in
“It is a blow, but an insignificant one,” Actually, Russians are taking up some of the promising areas.
Collingz maintains. “We do not focus on the slack. First-time Russian overseas buyers are
US as a sole marketplace for our sales. Many now scouting for purchases in South East Asia, Everyone is banking on the boom, which can
new investment clients are out there. Global the Philippines, specifically. Overseas property last four more years or longer.

The 2008 PBD Yearbook I 61

DBP Yearbook Inside Rev3 (Final)61 61 12/22/08 5:27:03 PM


Kapitan’s
city
BEER MAGNATE LUCIO TAN has joined
the band wagon of tycoons cashing in on the
tourist estate boom via the P10 billion Eton
City, the first master-planned residential island
development in the country.

His Eton Properties Philippines, Inc. (EPPI)


broke ground last December 2007 on a 1,000-
hectare site along the South Luzon Expressway
in Sta. Rosa, Laguna to launch Eton City’s
maiden showcase, South Lake Village. It also
happened to be EPPI’s ninth project since it
became a real estate company last year.

Location map
No doubt about it, Tan is positioning the
mixed-use leisure township as the future
“Makati of the South”. To be developed over a
ten-year span, Eton City integrates residential
enclaves with world-class hotels, a business
district, and a golf course, plus a full range of Each island accommodates 8 to 12 residential NSM&A has designed several waterfront
commercial and resort-style recreation facilities lots of three types: lake village lots about development projects in Bermuda and inthe
found only in next generation cities on the 500 to 600 square meters each, lakefront lots Philippines and is now executing the master
other side of the planet such as The Palm and measuring 600 to 800 sqm, and island lots that plan of South Lake Village.
The World in Dubai, and Lake Las Vegas in span 800 to 1,200 sqm. The lots are priced
Nevada, and Foster City in San Francisco, between P10,000 and P12,000 per sqm. “Our studies showed lakeside communities
California, both in the United States. offer significant growth as a result of the robust
Together, the lake island villages will tourism market,” Ignacio says.
In fact, Foster City serves as the main occupy about 150 hectares and will showcase
inspiration for South Lake Village, reveals Eton waterfront living in the Philippines. “Given the steadily increasing remittances from
President Danilo Ignacio. Homeowners here are meant to have the best of overseas Filipino workers, the low interest rate
both worlds: resort-style living with city luxury regime, the upsurge in foreign tourist arrivals,
“This island, built on engineered landfill by and comfort. and BPO requirements, we are confident the
the bay, is very popular with Asians living in market will be keen on Eton’s inventory
the United States,” he says. Naturally, EPPI The second phase of Eton City covers one and line-up of new projects. We believe that
believes Eton City will be just as popular in the more high-end residential village while demand for our core business will remain
country. phase three entails the development of a resilient.”
central business district that houses shopping
“We have a one-of-a-kind development, malls, office buildings for business process Green architecture
something nobody has done in the Philippines. outsourcing hotels and residential condos.
We offer not just lake front lots but actual Phase four includes the construction of an 18- NSM&A takes care of the “green architecture”
‘island lots’ and ‘island homes’,” Eton City hole golf course and still another village. and sustainability of Eton City. Its
General Manager Alex Jazmines points out. environmental plan addresses concerns ranging
Waterfront living from lake water supply, mosquito infestation,
Centerpiece flooding and erosion, to conservation and
Waterfront properties and waterfront living are pollution.
Eton’s centerpiece, South Lake Village, hot these days.
features 18 islands, each measuring a hectare First of all, live rivers surrounding the area
within a 35-hectare man-made lake. Eton may “It’s one of the current trends in the real estate ensures ample water supply. Rainfall and
even add a 19th island to cater to social events market. In Thailand, Singapore, Australia and natural creeks will feed Eton’s man-made lake.
like weddings. The lake villages, connected to the US, areas near water are considered prime
the mainland via land bridges, are slated to be property,” confirms architect Nestor Mangio “The continuous inflow and outflow of lake
turned over to homeowners in the middle of of NS Mangio & Associates(NSM&A), Eton’s water will prevent stagnation and mosquito
2009. partner. breeding,” Jazmines says.

The 2008 PBD Yearbook I 62

DBP Yearbook Inside Rev3 (Final)62 62 12/22/08 5:27:04 PM


In addition, developers are seeding fish in the health and spa zone with a gym, aerobics area,
lake, fattening them on mosquito larvae before clinic and salon; and a landscape/ outdoor Zone To be developed
anglers sport with them. For good measure, for family barbeques and lake activities. The
they have also installed filtering systems and country club shares come free with South Lake over a ten-year span,
aerators. Village lots. Eton City integrates
A detention pond sifts creek water before it is Other amenities on the drawing board include residential enclaves
channelled into the lake. In addition, fountains the River Grove, a world-class championship with world-class
on the lake corridor double as aerators, golf course, a commercial strip with shopping
maintaining proper oxygen levels. Lake liners, and dining areas, high-end residential and hotels, a business
earth fill, rock layers and vegetation contain office condominium communities, a complete district, and a golf
erosion on the lakeside. To curb pollution, only central business district.
kayaks and electric boats will be allowed on course, plus a full
the waters. On top of everything, residents will enjoy range of commercial
enhanced 24-hour security with a guarded entry
“We have looked into a 50-year flood study, and exit, roving guards, security cameras and and resort-style
taking into account the highest flooding levels a road-lined perimeter that keeps the property recreation facilities
in the area,” Jazmines notes. As a result, Eton away from the edge of the development area.
City’s villages will be elevated at the same found only in next
height as the expressway, out of harm’s reach. “We are using the latest security equipment to generation cities
ensure the safety of Eton City dwellers,” the
Most important of all, Eton City is nature- developers note. on the other side of
focused. So, EPPI is leaving out 47 per cent the planet such as
of the 1,000 hectare site as open spaces, way Eton City’s strategic location makes for a final
beyond the minimum requirement of 30%, selling point. The lake community is on both The Palm and The
allowing the lush greenery to create the sides of the South Luzon Expressway, right World in Dubai and
ambiance of a tropical sanctuary. at the entrance of the existing Eton City-
Greenfield interchange so residents can easily Lake Las Vegas in
In all, the luxury lake village community will travel in and out of Metro Manila. Nevada, and Foster
have 11 kilometers of waterfront and plenty
of parks. Residents can enjoy good views of After all, Santa Rosa is a major gateway to City in San Francisco,
Laguna de Bay and Mount Maquiling, along the metropolis, a high growth hub hailed as California, both in the
with their very own lake. the next lifestyle hub minutes away from
Makati. In its own right, the area is a center for United States.
The playgrounds, tree-lined roads, linear parks commerce, not only in Laguna but also in the
along the river and lake-view corridors and entire CALABARZON.
bridges are all consistent with Eton’s green It hosts industrial estates,
plan while the man-made lake forms the heart large-scale firms and
of community sports and recreation. Residents multinational companies,
can build their own private docks, sail and fish along with commercial
on the lake or take their boats to the country centers and first-class
club. housing projects.

The lake homes typify contemporary Asian Strategic location, green


architecture, matching the relaxed, resort-like architecture plus relaxed
atmosphere. resort living combined
with urban luxury
“The design goes well with our tropical makes Eton a true next
climate. Windows face south and north to generation lakeside city.
lessen the heat. It’s like countryside living with – Emmie Abadilla
all the urban amenities,” the architects explain.

The luxury amenities include a 2.2-hectare


Eton City landmarks

South Lake Sports and Country Club, with a


swimming pool zone where residents can relax
in the infinity pool or outdoor jacuzzi; a kid’s
zone where children can go to the gym or play
in the art corner; an adult zone for a variety of
sports and entertainment; a food and beverage
or F&B Zone for banquets and dinners; a

The 2008 PBD Yearbook I 63

DBP Yearbook Inside Rev3 (Final)63 63 12/22/08 5:27:05 PM


From
malls
to resort
town

Swimming pool
PROPERTY MAGNATE HENRY SY builds
resort towns as well as he builds malls. He
proves it with Hamilo Coast in Batangas.

The P7-billion project is his first foray into eco-


tourism real estates and “green development”. The premier coastal residential and resort town
And this early, his SM Investments Corp. combines two sunshine industries: property
(SMIC) expects 2008 sales to hit P2 billion and tourism. Add to that, Hamilo Coast merges SM Investments
from the 40-hectare Pico de Loro, the first urban planning with environment-friendly
of 13 coves in his pioneering 6,000 hectare development. Corp. expects
project along the South China Sea.
Based on the master plan of Cadiz 2008 sales to hit
Riding the country’s tourism surge and going International, Manila and ML Design, Brisbane
with the government’s strategy to position Hamilo Coast will be an integrated network P2 billion from the
the country as one of Asia’s leading tourist of coastal resort communities with a balanced
destinations has been a well-timed move mix of residential, commercial, eco-tourism 40-hectare Pico
on the tycoon’s part. “Promoting Philippine and leisure amenities such as sports facilities, a
tourism should be the task of every Filipino full-service beach, country clubs, a golf course, de Loro, the first
because tourism allows us to compete in the forest parks, exclusive beach enclaves, marina
global marketplace,” SMIC chairman Henry Sy and yacht clubs. of 13 coves in its
stresses.
The developers has conscientiously followed pioneering 6,000-
Needless to say, Hamilo Coast is also reviving the natural terrain of the vast property, which
the economy of Batangas. covers 13 natural coves, limestone cliffs, virgin hectare project
forests, natural parks, rock formations, plus 32
“We expect to employ as many as 70,000 kilometers of coastline. along the South
people for this whole project. Most of them
will come from the local community,” SMIC In keeping with Hamilo Coast’s backdrop of China Sea.
vice president for investor relations, Corazon forest and sea, the architecture of residences,
Guidote notes. resort hotels and other buildings is modern
tropical.
But even while SMIC combines commercial
convenience and home comforts with nature
and adventure, it will see to it that the beach
and sports facilities are environmentally safe
and friendly. It will develop low-density
neighborhoods, ensuring that the building
of the residential condominiums, beach and
country clubs, retail shops, as well as a marina
and yacht club create a low impact on the
Hamilo Coast beachfront

natural surroundings.

In other words, Hamilo Coast is a serious,


green development. In fact, it is the Philippines’
first community designed for ecological
sustainability with a defined environmental
program from concept, planning, design to
construction and operation.

The 2008 PBD Yearbook I 64

DBP Yearbook Inside Rev3 (Final)64 64 12/22/08 5:27:07 PM


Condominium exterior
Hamilo Coast
To ensure that the project will comply with Buyers’ response Location-wise, Hamilo Coast has the advantage
international environmental standards, SMIC of being just two and a half hours away from
has partnered with a global conservation Not surprisingly, buyers have snapped up the metropolis by car and 20 minutes by
organization, WWF-Philippines. shares of the Pico de Loro Beach and Country helicopter. Soon, the travel time will be cut to
Club. A few months after SMIC launched the just one hour by ferry from SM Bay City in
WWF advise the company on proper land project, 300 individual club shares have already Pasay.
use to preserve the area’s natural ecosystem been purchased of the 3,200 to be floated once
and to sustain the needs of future generations. the beach club is finished. Individual shares Future plans include linking SM Bay City
They employ Coastal Resource Management have sold for P460,000 each while shares for seamlessly with Hamilo Coast to allow guests
to revive the habitats of fish and other marine corporate buyers have fetched P850,000 each. to fly to Manila and check in a hotel at SM Bay
creatures along the shores, measure the impact City before they hop on to a ferry for a Hamilo
of Hamilo Coast on the biological capacity of Likewise, the first condos offering studio-type Coast eco-tourism experience.
Nasugbu, and stabilize the soil in the area to units have sold out fast, confirms Efren Tan,
keep the construction debris and run-offs from SMIC vice president for sales. And Hamilo Coast is just the beginning.
killing the sea.
To date, SMIC is starting work on Hamilo In the coming years, SMIC projects its tourism
Furthermore, Hamilo Coast has commissioned Coast’s second phase, fine-tuning it based on estates will become an equally important
adventure specialists, Sandugo, to define eco- buyers’ response by scrapping out studio-type contributor to the company coffers.
friendly and safe adventure courses custom- pads. From this time onwards, the smallest
designed for the site’s topography. Currently, condominium units will be one-bedroom “Our prospects are bright and the possibilities
Sandugo is designing trekking and biking trails affairs aimed at families eyeing vacation homes are endless,” executives conclude.
in the property. outside Metro Manila. – Emmie Abadilla

The 2008 PBD Yearbook I 65

DBP Yearbook Inside Rev3 (Final)65 65 12/22/08 5:27:11 PM


Ayala’s
magic
now
extends
to resorts
A LATECOMER IN RESORT
DEVELOPMENT, Ayala Land Inc. (ALI), has

Location map
hit the jackpot with its $600-million Anvaya
Cove in near Subic Bay and is now scouting
south of Metro Manila for similar sun and sea
sites.

While most Filipinos are tightening their purse and over P14,000 per sqm. Buyers are now environment, economics and planning, they
strings, ALI sold out the P3.5- billion phase starting to build a dozen residences. created a community “where the mountains
one of its first leisure community project much meet the sea” with clusters of vacation and
faster than expected, leaving a market still “Every year, we bring new assets. We have retirement homes, a mountain and beach club
hungry for premium space. sold out our beach and nature club early this plus a nature camp in an area that overlooks
2008 and we have stopped selling shares,” the South China Sea in the backdrop of the
“The demand is very strong,” ALI president according to Ayala. “Now, we are developing Zambales range.
Jaime Ayala confirms. “Anvaya Cove has done the nature camp.”
very well. We sold out phase one, so we are Its showcase Cliffside homes, atop a 1,500 foot
openeda new phase last August. We will also It was fast work too. In 2005, ALI partnered promontory at the south of the site’s main cove,
offer complete units by fourth quarter of 2008,” with the Subic Bay Development and comes with its own one-hectare nature park
he says. Industrial Estate Corp. (Sudeco), the privately and commands a view of the beach, the bay
owned real estate holding firm of businessman and the mountains.
Anvaya, which means “family” in Sanskrit, Carlos De Leon’s family, and started
is a three-phased, 20-year eco-sensitive earthworks right away on the latter’s coastal On the other hand, homes at Mango Grove look
development pitched as a retreat for bonding lands in Morong, Bataan. out into the cove, the green valleys, the beach
and communing with nature. It offers activities club and nature camp. Around the clumps
ranging from barbecues and spas, picnics and The area is just 20 minutes away from of fruit trees, ALI built a 10,000-square-
camping to kayaking and golf, trekking, diving Subic Bay Freeport, a tourist hub in itself meter park to protect over half a century-old
and snorkeling. Target clients include rich complete with dive sites, equestrian center, mangoes, narra, cupang, cashew and bamboo.
locals looking for weekend homes as well as jungle environment, a survival training camp,
overseas Filipinos from America and Europe zoo, ocean theme park, butterfly gardens, The smallest residential cluster, Wood Park,
who intend to retire in their homeland. insectarium and aviaries, go-kart track, car features a natural brook and a Sunset Park.
raceway, golf course, yacht club, duty-free
Phase One covers the bulk of the property, 58% stores and restaurants. Building around natural features, the developer
of the 320 hectares, and includes a beach club, carved out rolling asphalt roads, low-impact
golf course plus 18 executive villas, worth over And just this April, the joining of the new pedestrian, bicycle and cart paths, infinity pools
P20 million each. Clark-Subic Tollway with North Luzon and big playgrounds. They transformed one
Expressway (NLEX) made the leisure stream into a lake for kayaking and lined the
Since 2007, buyers have snapped up the villas, community “the fastest accessible leisure beachfront with restaurants and bars.
which were sold with condominium titles to property in the country”, just 1.5 hours drive
do away with the ban on foreigners owning from Manila. Recreational areas blended wild greenery
property, as well as the house and lot packages. and rolling hills with man-made structures
Master plan like shaded foot and jogging paths lined with
Add to that, ALI has unloaded a total of 300 benches, a multi-purpose gazebo that blends
residential lots ranging in size from 367 to ALI contracted architect Leandro V. Locsin, with existing land forms and interactive
1,200 square meter, priced at between P6,640 Jr. for Anvaya’s master plan. Fusing design, playgrounds.

The 2008 PBD Yearbook I 66

DBP Yearbook Inside Rev3 (Final)66 66 12/22/08 5:27:12 PM


Anvaya Cove Beach Club
Anvaya follows the lay of the land, leaving as In addition, home owners are allowed to build
much as 60% of the site’s natural environment on only 35% of their lots, ensuring ample
While most untouched, maintaining wide open spaces, margins along their perimeters.
protecting wildlife habitats from beach
Filipinos are combers. Residents whose homes surround My Park,
have to build without fences or keep their walls
tightening their It has allocated sanctuaries: a nesting cove low, if at all.
for sea turtles plus a stretch of wetlands
purse strings, for migratory fowl, eagle owls and mallard “We want people to feel relaxed and pampered
ducks. here,” the Ayala says.
Ayala Land, Inc.
The master plan includes view pavilions and Ecotourism
sold out the P3.5- lookout towers along with ecological trails
through the forested parks, foot paths to Originally, the locals thought the area should
billion phase one the coves and secluded beaches, “discovery host a technology park but favoured ALI’s
classrooms” and obstacle courses for adventure project when it came because Morong is best
of Anvaya Cove, seekers. suited for ecotourism.

its first leisure The beach club cum nature camp have trained “Anvaya is a better alternative because the
coordinators to assist families in planning and influx of industrial locators will destroy our
community customizing mountain and beach activities, town,” they commented.
eco adventures, sunset cruises, romantic private
project, much picnics, spas and massage services. However, future homeowners at Anvaya have
to share the responsibility in caring for the
faster than The club has, likewise, hired local fishermen to environment and protecting the coral reefs on
serve as lifeguards, marine and forest rangers the bay.
expected and as well as guides.
Meanwhile, ALI plans to develop an Amara
left a market To light up the place without disturbing sea resort villa community close to the Mactan
turtles laying eggs or confusing hatchlings International Airport, in a 45-hectare land
still hungry for who are sensitive to strong lights, Anvaya has fronting the sea.
waist-high bollards along the roadway instead
premium space. of electric posts. For the Ayalas, building dream homes in
leisure communities has become a serious and
No cables are in sight, with all wiring buried lucrative business.
underground. – Emmie Abadilla

The 2008 PBD Yearbook I 67

DBP Yearbook Inside Rev3 (Final)67 67 12/22/08 5:27:13 PM


Pagcor’s
$20B
Las Vegas
dream

Pagcor’s future city


NEXT YEAR, a $20-billion Las Vegas-style
casino-entertainment complex will rise on the
800-hectare reclaimed site off Manila Bay,
adjacent to the SM Mall of Asia.

The chips—and some $1.5-billion revenues


for the Philippine Amusement and Gaming
Corp. – will roll in soon after. To be completed within 7 to 10 years, the travel with their families and take side trips,”
three-phased project can, likewise, generate Genuino explains.
First called Pagcor City in 2001, the project 200,000 new jobs for Filipinos.
goes by several names: “Manila Bay Tourism So far, only 25% of Pagor City’s land area has
City”, “Bagong Nayong Pilipino Integrated Bluprint been reclaimed. The rest will be added as the
Tourism City”, and just plain “Tourism City”. project gets underway. Of the total, only 35%
Whatever moniker it ends up with, the project Under the plan, the reclaimed site, easily of the total property is allocated for casino
signals the state company’s shift from gaming accessible from the Ninoy Aquino International development.
to entertainment. Airport (NAIA), seaports, as well as the
major commercial and urban centers, will In 2007, Pagcor started the first phase of
“Today’s thrust is no longer casino gaming but be divided into specialized areas with non- Pagcor City which consists of a resort hotel, a
total entertainment,” PAGCOR chairman and gaming operations accounting for 65% of the theme park, and gaming centers. Covering 40
chief executive Ephraim Genuino says. “In development. hectares and entailing an investment of about
the global arena, only 25% of the revenues of $10 billion investments.
gaming destinations, such as Las Vegas, come Pagcor’s blueprint includes a “Tropical Area”
from actual gambling.” with white sand beaches and lagoons facing “Our goal is to complete Phase I in two years
Manila Bay, a “Winter Park” with large and immediately proceed with the second
Pagcor City models itself after The Strip, a ice skating rinks with real snow and skiing phase, which would involve residential
section of Las Vegas which hosts the majority facilities as well as six-star hotels, world- villages, a resort, more hotels and casinos,”
of the world’s largest casinos and 18 of the 25 class theme parks, educational and cultural Genuino says.
largest hotels in the world, with a combined complexes.
capacity of over 67,000 rooms. The Strip rakes Phase III covers a hospital district, retirement
in over $6 billion per annum. It will also have a marina complex with walk- villages, and wellness centers. Japanese
through glass tunnels showcasing different investors, in particular, want to develop a
“We are not just building casinos and bringing marine species in the Asia-Pacific, a fish port retirement village within the reclaimed area to
in gamers. We want to bring in tourists.” says and a seafood restaurant patterned after San cater to the rapidly expanding retiree market.
Pagcor president Rafael Francisco. “With Francisco’s Fisherman’s Wharf, shopping
Pagcor City, we can quadruple our tourist malls, a commercial district, sports stadia, This will include a casino with a 2,500 room
arrivals to 10 million in five years. celebrity-themed restaurants, convention halls, hotel, an oceanarium, a giant Ferris wheel
state-of-the-art theaters, gaming facilities, known as the Manila Eye (after the London
We can catch up with Singapore, which recently residential villages, and a hospital district. Eye), an art museum displaying religious
allowed two casinos, and Macau, Asia’s casino icons, a theatre, sports arena and commercial
capital.” Boardwalks will provide public access to facilities. The casino is expected to open
promenades lined with specialty restaurants around April 2010.
Pagcor, of course, has to rake in the cash and outdoor cafes. An almost 2,000-
too, being the biggest money maker for the foot observation tower will dominate the Investors
government. When its property project is fully landscape.
operational, the state-run company projects to Foreign investors are bankrolling 90% of the
easily triple its 2007 annual income of $500 “It’s important to have attractions that ensure a cost. Already given the nod to proceeds are
million. pleasant stay for casino visitors, most of whom Aruze Corp.of Japan, Genting Berhad Group

The 2008 PBD Yearbook I 68

DBP Yearbook Inside Rev3 (Final)68 68 12/22/08 5:27:14 PM


along with a major entertainment and sports
center.

However, Bloombury needs to pull its act


together after negotiations for a partnership
with Crown Ltd., the entertainment and gaming
firm of Australia’s third richest man, James
Packer, fell through.

Crown declined to participate in Bloombury’s


Groundbreaking ceremony

proposal to develop an integrated casino-


entertainment complex in Manila Bay due
to the global credit crunch which pushed up
borrowing costs and made it harder to squeeze
profits from investments.

For its part, SMIC is committed to help


develop Pagcor City by investing in its own
Mall of Asia complex close by.

of Malaysia, SM Investments Corp., and Recently, SMIC has contracted hotel services
Bloombery of Australia. provider Carlson Hotels Worldwide-Asia
Philippine Pacific to manage Regent- and Radisson-
The Japanese group, which is into the branded hotels within the MOA.
manufacture of pachinko and slot machines, Amusement
has forged a partnership with Wynn Resorts, Earlier, it was reported that SMIC is partnering
operator of Las Vegas and Macau casinos, and Gaming with Australia’s Asia Pacific Gaming to build
to build the Okada Resort Manila Bay. a world-class gaming facility close to Pagcor
Construction starts in January 2009. Corp.’s project City. Belle Corp. has also surfaced as a
possible partner for SM’s casino project.
“The most important thing is to attract people by the bay
all over the world, get them to have fun and But while a casino may be in the works,
give them a pleasant experience,” Aruze is expected nothing is definite todate, according to SMIC
chairman Kazuo Okada says. vice chairman Tessie Sy-Coson.
to generate
For its part, the Genting group has partnered Theme park
with a local conglomerate, Alliance Global 200,000 new
Group Inc., which owns the McDonald’s On top of all these, Pagcor City plays host to
Philippine franchise and Megaworld Properties. jobs and “Bagong Nayong Pilipino”, one of its biggest
locators to date.
Genting’s Star Cruises Ltd., the world’s third quadruple
largest cruise operator, and AGI’s subsidiary, Nayong Pilipino is a unique, interactive,
Travelers International Hotel Group Inc., has tourist arrivals educational park featuring miniature versions
forged a joint venture to build a hotel and of the country’s tourist attractions.
casino complex. to 10 million
It showcases Filipino cultural and historical
Add to that, the Malaysian group is leasing 35- in five years’ heritage along with the replicas of the
hectares to put up a theme park. archipelago’s natural and made-made
time. It will wonders.
Genting, the franchise holder of Universal
Studios theme parks in Asia, has invested S$6 also easily The theme park operator closed down its
billion in an integrated resort project in Sentosa old site in Pasay to pave the way for NAIA
Island. triple Pagcor’s Terminal 3. It broke ground recently on its new
15 hectare home within Pagcor City.
Bloombury Investments Ltd., a British Virgin 2007 annual
Islands firm, also plans to lease 15 hectares If all goes well, this newest gaming-
in the reclaimed area and sink in at least $1 income of $500 entertainment mega-complex may yet be the
billion to build three luxury hotels for a total of local version of Las Vegas and Macau’s Cotai,
500 rooms, high-end retail shopping, celebrity- million. fulfilling the Philippine dream to be Asia’s
themed dining, a showroom and museum, leisure capital.— Emmie Abadilla

The 2008 PBD Yearbook I 69

DBP Yearbook Inside Rev3 (Final)69 69 12/22/08 5:27:15 PM


A Tale of
Boom
Fort Bonifacio firemen, policemen and other professionals will
have their housing.
Perhaps the most notable physical development

town
in Taguig is the emergence of Fort Bonifacio Perhaps, the most ambitious vision for
as the next business district of the country. In Taguig of Mayor Tinga is the building of an
the last six years alone, this former military international airport in Taguig’s 7-kilometer
Among the cities in the country today, Taguig camp has welcomed A-list institutions and lakeshore area. The place, which is very near
stands as the most competitive city for doing establishments such as Fort Strip, Market! Makati, can accommodate two runways unlike
business. This is the finding of a World Market!, Serendra and the Fort Bonifacio the Ninoy Aquino International Airport, which
Bank report entitled “ Doing Business in the High Street its skyline has been dramatically has only one runway.
Philippines 2008. “ changing every year, indicating rapid pace of
growth and development. With so many ongoing activities, there is
The WB report is part of the East Asian no doubt that Taguig will continue to boom.
subnational series, which ranks 178 economies Within the next three years, the city is poised – Rizal Raoul Reyes
in terms of doing business on 10 topics , to become the next tourist destination, with

The
namely : starting a business, dealing with the construction of five luxury hotels with a
licenses, employing workers, registering combined 3,000 rooms in Fort Bonifacio. Upon
property, getting credit, protecting investors, its completion, the 66-storey Grand Hyatt

greening
paying taxes, trading across borders, enforcing constructed by Federal Land, the property
contracts, and closing a business. unit of Metropolitan Bank and Trust Co., will
be the tallest building in the country. Other

of Makati
The report, which was done in cooperation hotel facilities that are confirmed to rise in
with the AIM Management Policy Center and Fort Bonifacio are Sofitel Pullman, Discovery
the International Finance Corp., also include Suites, Ascott Hotel, and Shangri-La.
14 other cities in Metro Manila (Caloocan, Being the country’s top business district, the
Las Pinas, Makati, Malabon, Mandaluyong, A civic center patterned after those in Hong city of Makati under Mayor Jejomar Binay
Marikina, Navotas, Paranaque, Pasay, Pasig, Kong, Singapore, and the United States will has outlined a long–range development plan
Quezon City, San Juan and Valenzuela); three also be built.. The mixed use complex will to ensure there will be balanced growth in the
cities in the Visayas (Cebu, Lapulapu, and house hotel facilities, convention centers, and area formerly known as San Pedro de Macati.
Mandaue) plus Tanauan in Batangas and even retail establishments.
Davao in Mindanao. Part of that balanced growth involves
Other positive developments include the identifying and designating areas where green
In the WB study, Taguig emerged No. 1 in ease ongoing negotiations between the Philippine spaces, pocket parks, and landscaped gardens
of starting a business. A businessman needs to Stock Exchange and Metro Pacific Corp. for can be developed and linked according to an
take only 15 steps , spend 27 days and 6.9% of the transfer of the unified stock exchange to overall Green Plan. This plan, which has been
his minimum paid-up capital to be open for a 5,000 square meter lot in Fort Bonifacio, the be formulated based on the city’s Land Use
business. construction of St. Luke’s Medical Center, and Plan, will include:
the relocation of the embassies of Singapore,
In contrast, one must undergo 23 procedures Korea, and the United Kingdom. • Utilization of some commercial land parcels
in 42 days in Davao; 22 steps in 37 days in in the CBD as green space. Private property
Valenzuela; and 15 steps in 52 days in Manila. On the other hand, the city government is owners will be encouraged to utilize part of
also coming out with their projects to deliver their lots, although zoned as commercial land
Getting the paperwork needed for construction womb-to-tomb services to its residents such in the 1981 ordinance, as green space.
is also easiest in Taguig – 23 steps in 121 as a new state-of-the-art 110-bed district
days compared with Pasig’s 33 procedures hospital, a new university, a Taguig Science • Enhancing streetscapes through landscaping
in173 days . The WB study also highlighted High School, and mass housing for the poor. and the aesthetic improvement of sidewalks.
one major cause of the delay is getting an A 5-hectare city cemetery will be built next to Key street segments that extend throughout
electricity connection – three months in Metro the upscale Heritage Park. And in addition to the city will be identified for priority
Manila and only five days in Tanauan. the housing for the poor, the city’s teachers, implementation of landscaping and sidewalk

The 2008 PBD Yearbook I 70

DBP Yearbook Inside Rev3 (Final)70 70 12/22/08 5:27:16 PM


Three Cities
improvement measures such repaving, tree activities or location, can be covered and Bank as, “the center of gravity of commercial
planting, removal of clutter and obstruction, guided by more detailed development plans. developments in Metro Manila in the coming
signage improvement. In general, priority These include: years.”
will be given to pedestrians. Identified
streets are JP Rizal Ave., Chino Roces Ave., • A government center along JP Rizal Ave., In fact, the World Bank commissioned
Lawton Ave., Makati Ave., Ayala Ave., and which can anchor an urban renewal program Japanese firm Almec to complete the
Sen. Gil Puyat Ave. When completed, and in the traditional part of the city; framework plan. The estimated P3- billion
by extending across the two city districts, project aims to transform a largely institutional
these landscaped street segments will also • The riverfront development area, with and partly blighted area into one of the most
form a series of green corridors that visually Liwasang Makati as it primary element, but economically vibrant districts.
integrate the Old Town, the CBD, and the which extends throughout the Pasig River
Fort Bonifacio areas of the city. frontage to include residential, recreational At present, the city government is working
and some commercial uses; and hand-in-hand with national government
• Development of pocket parks and landscaped agencies and various stakeholders for the
gardens. Small but strategically located • The green circuit or the set of street corridors development of the area.
and highly visible land parcels (e.g. street identified in the proposed Green Plan that can
corners, vacant areas of public facilities, have a distinct landscaping treatment to serve Property experts believe the area has good
rotundas, etc.) will be developed into pocket as an integrating element of the city. prospects because of its accessibility to
parks and landscaped gardens. metropolitan areas metropolitan access. It has

Quezon
connections to three rail stations and one of the
• Expansion of riverside park. The existing biggest areas covered by EDSA.
Liwasang Makati will be a major element

City’s
of the Green Plan. It is in a unique location The Triangle Park Project calls for the
that offers the opportunity to integrate open formation of five distinct commercial cum
and green spaces with active recreational and residential districts.

Triangle
commercial land uses.
Triangle Exchange is envisioned to have the
• Landscaping of major infrastructure highest densities of the Triangle Park. It will

Park
elements. Recent infrastructure projects such have commercial and residential establishments
as the Edsa-MRT3, the Kalayaan flyover, fully integrated with the transit facilities,
and the Skyway link have become very providing the best regional links and commuter
conspicuous parts of the city’s urban form. QUEZON CITY joined the business district access.
The aesthetic impact of these infrastructure development bandwagon when Vice President
elements will be improved through Noli de Castro and Quezon City Mayor The Veterans area is envisioned to be a mixed-
landscaping and other features that will Feliciano Belmonte Jr. recently discussed the use community with a residential focus from
reduce their heavy and obtrusive image. blueprint for the Quezon City Central Business high-rise condominiums to medium and lower
District (QC-CBD) otherwise known as the density dwellings. Greenbelt areas will be
• Enhancing local capability to manage and Triangle Park. built for the residents. The Downtown Hub
maintain green spaces. The Plan serves as an will host institutional locators such as medical,
initial step towards the establishment of an De Castro and Belmonte chair and co- training, science, among others integrated with
institutional framework and corresponding chair, respectively, of the Urban Triangle commercial and residential developments.
organization needed to manage and maintain Development (TriDev) Commission will
the city’s green spaces. This organization will spearhead in charting the strategies for the The Emporium section will be technology hub
cover support requirements such as tree and development of the QC-CBD, a 25-hectare area while the Commons area will consist of a park
plant nurseries and will include substantial located in the North and East Triangles and with cultural, recreational, entertainment and
private sector participation. Veterans Memorial Area. amenity focus. Property giant Ayala Land is
an early bird by virtue of building the Trinoma
The Land Use Plan also identifies special According to the city government’s website, mall.
development areas that, because of their unique the project has been hailed by the World —RRReyes

The 2008 PBD Yearbook I 71

DBP Yearbook Inside Rev3 (Final)71 71 12/22/08 5:27:17 PM


Business inflat
2008
prices of other goods (such as fast food meals) Based on the probability distribution of
and services (such as transportation). Analysts respondents’ forecasts, there is a 31.7% chance
noted that additional inflationary pressures that average inflation for 2008 will be within

second
could come from the rising global prices of 8.1-9% and a 31.2% chance that inflation will
metals and steel for construction as well as be within 9.1-10 percent.
coal and natural gas. Meanwhile, contrary to

quarter
expectations of a strong currency as a downside This indicated that there are expectations that
risk to inflation in the previous quarter, the inflation will be above the 4% (+1.0 percentage
depreciation of the peso (almost 10% year-to- point) target for 2008.
date) could support inflation as it will translate
RESULTS OF THE SECOND QUARTER to higher import costs. Consistent with the survey conducted by the
2008 survey on inflation forecasts showed Bangko Sentral, the Asia Pacific Consensus
higher inflation expectations for both 2008 and For 2009, the survey also showed a higher Forecasts for Philippine inflation also showed
2009 . The mean inflation forecast for 2008 mean inflation forecast of 6.1% compared to rising expectations during the quarter in
was higher at 8.8% compared to the previous the previous quarter’s 4.2 percent. review.
quarter’s 4.9 percent.
Citing base effects, most analysts expect As of June 2008, inflation for 2008 is now
The upward adjustment in inflation inflation to peak in the third quarter of 2008. forecast at 7.3%, higher than the 5.1% forecast
expectations stemmed mainly from the The mean inflation forecast of analysts is in April 2008 and 4.4% in June 2007.
acceleration in fuel and food prices, the impact 10.6% for the third quarter of 2008 and 10.2%
of which has already started to feed into the for the second quarter of 2008. — by Bangko Sentral ng Pilipinas

Measuring be defined as the differential between the yields


of one-year bonds and the 91-day T-bill rate.
out to be a good indicator of what happens
to inflation four months hence. The lag has

inflation Studying charts on actual inflation versus the


term spread, it can, therefore, be observed
an intuitive basis: inflation developments up
to three months ahead are covered by what

expectations that the term spread could correctly move up


with the actual inflation (12 months forward),
happens to the 91-day T-bill rate, while the gap
between the 182-day and 91-day T-bill rate
Yield Curve e.g., in March 2002 or in June 2003. It also covers what is expected to happen to inflation
moved down with actual inflation (12 months after three months. Following the adoption of
Traditional measures of inflation expectations forward), e.g., in October 2005. However, inflation targeting, the BSP started to look at
are contained in the yields of various securities there were also some periods when spreads the market’s view of inflation as represented
in the financial market. This is based on the did not predict future inflation well, especially by private analysts’ inflation forecasts. One
fact that inflation expectations influence the when there were shocks in commodity prices. way was to conduct a survey along with the
shape of the yield curve by affecting expected Such weakness could be due to the following: publication of its inflation report.
short-term interest rates. For example, when 1) the presence of other inter-temporal risks
investors revise their expectations about long- incorporated in the premium between different Looking at the historical movements of
term future inflation rates upward, the yield yields; and 2) information among bond forecasters’ expectations over time, the trend of
curve is projected to steepen. This is so because investors may not be fully available 12 months the forecasts generally moved along with actual
since investors are concerned about their real earlier. inflation (annual average for the following
returns, they would naturally demand nominal year). This is a good indication that the
returns that are high enough to protect them In a previous study, the coefficient of the information contained in the survey is a good
against expected inflation. three-month spread (182-day versus. 91- measure of inflation expectations. Presently,
day T-bill rate) was found to be significant the survey also gathers not only respondents’
Term spreads, based on the yield curve, serve and positive, so that a larger differential is deterministic forecasts, but also information
as another proxy for inflation expectations in associated with a rise in the inflation rate. in probabilistic terms, particularly on the
the absence of sufficient time series data. One Moreover, the differential enters with a lag probabilities attached to the various ranges of
term spread (forecast 9-12 months ahead) may of four months, so that the differential turns inflation.

The 2008 PBD Yearbook I 72

DBP Yearbook Inside Rev3 (Final)72 72 12/22/08 5:27:18 PM


ation forecasts
2008
fuel and food prices during the fist half of the chance that average inflation for 2008 will fall
year. The weaker peso, which drives upward within 9.1-10%, above the 4% target for 2008.
the cost of imported products , also added to

third
the price pressures. Meanwhile, some analysts The Asia Pacific Consensus Forecasts for
reported that inflation may have already peaked Philippine inflation in 2008 and 2009 showed
and pressures have somehow subsided recently. rising expectations in July and August, but

quarter
The softening of commodity prices, especially yielded lower inflation expectations in
energy, due to the slowdown of global demand, September 2008 relative to the previous month.
was expected to support the decline in inflation.
At the same time, weaker consumer spending BSP Inflation Forecasts
PRIVATE SECTOR FORECASTS are higher would likely keep demand pressures on a
for 2008 and 2009, although the forecast curve downward path. The Bangko Sentral’s baseline forecasts
appear to be flattening. Third quarter 2008 indicate that inflation will likely settle above
inflation forecasts showed higher inflation For 2009, the survey also showed a higher the 2008 and 2009 targets. However, future
expectations for both 2008 and 2009. The mean mean inflation forecast of 6.5 percent. The inflation is expected to decelerate to single
inflation forecast for 2008 at 9.7% was higher mean inflation forecast of analysts is 11.1% for digit levels in 2009 to reach the target-
than the previous quarter’s 8.8 percent. the fourth quarter of 2008 and 9.2% for the consistent path by 2010.
first quarter of 2009.
Lingering inflation was expected to continue to The current inflation outlook continues to show
affect the average price level in 2008. Higher Based on the probability distribution of that inflation could settle above the inflation
inflation expectations were largely driven by respondents’ forecasts, there is a 56.9% targets for 2008 and 2009 targets. The inflation
forecasts for 2008 and 2009 declined due to
A comparison of the resulting mean forecasts one month). Thus, respondents to this survey the lower-than –projected inflation outturns
of the BSP survey with current inflation (actual have a lot of information available to them for September 2008, the easing in prices of oil
inflation during the quarter when the survey when they make their forecasts. and non-oil commodities in the world market,
is done) reveals that private sector forecasts and for 2009, some base year effects from
follow the path of the said current inflation. In Conclusion high inflation in 2008. The emerging baseline
general, this observation is common among forecasts show that inflation will unwind
the other measures of expectations. For a more The wide range of available measures of over the next few months. Decelerating to
frequent reading of market analysts’ inflation expectations provides policymakers with single-digit levels in 2009, to reach the target
expectations, one can look at other surveys important information on how stakeholders consistent path by 2010.
conducted by private organizations such as react to evolving price conditions. If these
AP Consensus and Bloomberg. Fortunately, measures indicate that expectations are already The balance of demand and supply conditions,
both surveys are done on a monthly basis. persistent, then they signal to monetary as captured by the output gap ( or the
The mean forecasts from AP Consensus have authorities that there is a possible emergence difference between actual and potential output)
tracked actual inflation considering that a lot of inflation inertia. At the same time, the provides an indication of potential inflationary
of information is already available with the different measures of expectations can be used pressures in the near term. Inflation tends to
minimal (one month) lag within which the by the BSP to test whether its actions in terms rise (fall) when demand for goods and services
actual values are predicted. of transparency and accountability have been exert pressures on the economy’s ability to
effective in strengthening the inflation-targeting produce goods and services, i.e. when the
Meanwhile, the results from the Bloomberg framework by anchoring inflation expectations. output gap is positive (negative). Based on
survey more closely followed the movements This can be done by comparing the BSP’s revised GDP data, preliminary estimates
of the corresponding actual inflation (one targets against expectations. If expectations yielded an output gap of 4.2% in the second
month ahead). The narrower deviation of the should be observed to have increasing causal quarter of 2008, which was higher than the
Bloomberg mean forecasts over actual inflation relationship with the inflation target, then one previous quarter estimate. The positive output
stemmed from the fact that the lag between the can conclude that inflation expectations would gap could indicate demand pressures that may
time the forecasts are done and the release date have a significant degree of dependence or contribute to higher inflation.
of actual inflation is relatively short (less than anchoring on the BSP inflation target. — by the Bangko Sentral ng Pilipinas

The 2008 PBD Yearbook I 73

DBP Yearbook Inside Rev3 (Final)73 73 12/22/08 5:27:18 PM


Col. Nicetas Katigbak helps Lipa reclaim ins title as the country’s “Barako Capital”

Making sense of the triple


bottom line
By Rizal Raoul Reyes

THE MAJORITY OF THE BUSINESS are guided by the big picture of where their On the other hand, 45% blamed lack of
community, particularly members of the small efforts which will be substantial in the resources while 35% believed it was lack of
League of Corporate Foundations are quite long run. Further, Juan says the members are support from top management that impeded
aware of the triple bottom line approach going to realize that this is not mere corporate corporate citizenship. Meanwhile, 30% of
(economic, social and environmental profits). philanthropy. the respondents said lack of interest among
employees was also a major factor.
“The LCF has been engaging chief executive CSR survey
officers and the whole C-suite to coordinate “Twenty-two percent of the companies still
strategies on corporate giving with their In a survey presented doubted that corporate citizenship yields
foundations and community relations teams,” during the LCF 2008 significant business benefit,” he said. As
says former president Pacita Juan. Forum, Asian Institute of far as spending was concerned, 58% of the
Management Professor companies say they invested more financial
Although LCF members Felipe Alfonso said resources in 2007 as compared to 2005 while
have yet to achieve 75% of the respondents 37% said their investments remained the
integration in their pointed out that CSR same.
programs, Juan says “makes a “tangible
Felipe Alfonso,
different companies contribution to the Chairman of the Lopez When asked if their company is investing more
are implementing in business bottom line.” Group of Foundations time and attention, 60% said their companies
a different stages of allotted more or somewhat more in CSR
integration. “The good Alfonso says 83% of the respondents think efforts. This trend, according to Alfonso,
thing is that everybody the public expect companies to deliver quality calls for bigger involvement of companies in
now wants their CSR CSR programs to the stakeholders. However, pursuing corporate citizenship.
Pacita Juan,
efforts integrated into President of Figaro
52% of the respondents think companies
their core businesses,” Foundation, Inc. should raise the bar higher in terms of being In the 21 statements given to the respondents,
says Juan. and former president of more committed in implementing corporate providing skills development training for the
the League of Corporate
Foundations citizenship to the ground level. incumbent workforce and improving the safety
For other basic of the products emerged as the top three issues
activities like community relations, the LCF “Across companies, the top drivers for preferred to be involved by business.
urges members to craft bigger CSR roadmaps corporate citizenship are that CSR fits with
either in education and environment. the company’s values; expectations that it will On the other hand, supporting dependent care
improve the company’s image and reputation; for the elderly, developing alternative energy
At this stage, Juan says doing the basics for and adoption of CSR as part of business sources and safeguarding human rights were
the meantime is a good start while members strategy,” says Alfonso. the least favored by the business sector.

The 2008 PBD Yearbook I 74

DBP Yearbook Inside Rev3 (Final)74 74 12/22/08 5:27:22 PM


Agriculture Secretary Arthur Yap hands over P50 million to finance projects of the Philippine Coffee Board

For the top five issues, improving the quality of “The question is: To what bigger roadmap can consumption is even higher than we projected
products got the highest with 86% followed by I connect my initiatives with? And in LCF we five years ago. We have been successful in
skills development training for the incumbent have answered that. Over the last three years, educating the consumers about Philippine
workforce with 77% while close at third was a lot of our member foundations aligned their coffee. Now it is time to concentrate on the
the improving the safety of products with 76 efforts with these two roadmaps. So, no effort, other end of the spectrum--the farmers” says
percent. no matter how small, is wasted but contributes Juan.
to a bigger goal,” Juan points out.
Despite these challenges, Juan believes it is Juan says the current challenge of the PCB
just a matter of time that companies can find Juan says the beauty of their involvement is to work double time or double the farmer
ways to share best practices to implement is there are many areas waiting for their populations, increase the hectares for coffee
their respective CSR programs. Furthermore, assistance. For instance, she says education plantation.
she says LCF members have to intensify their has many areas that LCF members can help.
efforts to reach out to management and stress to She cites teacher training which can deliver Meanwhile, Maria Fatima Reyes, founder
them the importance of corporate citizenship. a multiplier effect bigger than textbooks or and principal of the Sustainability Strategics
schoolhouses in the long run. (Asia) Philippine Institute of Certified Public
“When management realizes the importance, Accounts, sees leadership and commitment,
it can now rally the employees to pursue “Feeding programs may do well because an business case for transparency and
corporate citizenship,” she says. empty stomach is an empty mind which cannot organizational competence and capacity as the
accept any kind of information,” she says. issues to be reckoned in enabling CSR to be
sustainable.
In a survey presented during For instance, the Philippine Business for
the LCF 2008 Forum, 75% Education has been active in encouraging Reyes points out companies must tap
of the respondents pointed students to take up education courses as part accountants and auditors for their CSR
out that corporate social of developing of pool of skilled teachers in the initiatives must tap the support of the
responsibility “makes a future. accounting and auditing sectors for their CSR
“tangible contribution to the data collection and repository
business bottom line.” However, As far as raising the competency levels
52% of the respondents think of industries is concerned, Juan says the “Accountants and auditors can help companies
companies should raise the bar Philippine Coffee Board (PCB) is one of the develop standards for measurement and
higher in terms of being more more sustainable industry boards not only reporting strategy,” says Reyes.
committed in implementing because of the popularity of coffee but also
corporate citizenship to the because it is in the forefront of addressing of With measurable and comparable data, Reyes
ground level. declining production levels. says companies can now develop a stronger
corporate structure for sustainability in CSR
Even in the coffee industry board, the reporting.
Sustainable program challenge is the sustainability of its projects,
given that the trustees have their own In the long term, Reyes sees Philippine
Juan, who heads Figaro Foundation, Inc., says businesses to run. companies implementing the Global reporting
the amount of assistance given by a company initiative (GRI) in their CSR projects. Further,
does not matter; the more important thing is “Our consumption is ever increasing mainly she says the Philippines will be active in more
the assistance is channeled to a sustainable because of our information efforts on the green projects as part of the global initiative to
program. good quality of our local coffee. As a result, enhance environmentalism.

The 2008 PBD Yearbook I 75

DBP Yearbook Inside Rev3 (Final)75 75 12/22/08 5:27:24 PM


A vested production of the Barako, a local variant of
coffee that has been in declined in terms of
production since the 1990s. The result is a win-
“Our consumption is ever increasing mainly
because of our information efforts on the
good quality of our local coffee. AS a result,

interest in win situation for both Figaro and the farmers


because Figaro enjoys a stable supply of coffee
and the entire value chain benefits.
consumption is even higher than we projected
five years ago. We have been successful in
educating the consumers about Philippine

coffee “It is fine to have a vested interest so that


one can sustain the very program a company
coffee. Now it is time to concentrate on the
other end of the spectrum--the farmers,” says
Juan.
Pacita Juan, co-founder of Figaro Coffee Co. chooses to adopt. Why support a cause that
and current president of Figaro Foundation, is so far removed from your business? How Reviving the country’s coffee industry is a
is one of the champion advocates of the do you sustain the activity if it does not make relevant cause. Being a coffee lover herself,
Philippine coffee industry. good business sense,” she asks. Juan knows the stuff she is
talking about.
Aside from promoting the Filipino brand But for Juan the quest does not stop there.
abroad, Figaro also uses only handpicked She is leading the drive to raise the
Philippine Arabica from the top coffee farms competency levels of industries,
in the country. She says this enables Figaro to particularly coffee.
offer at least 12 flavors of coffee any time to
the customers. Juan said the Philippine Coffee Board
(PCB) is one of the more sustainable
According to Juan, a company’s corporate industry boards in the country, not only
social responsibility (CSR) CSR program because of the popularity of coffee but also
must be related their lone line of business. because it is in the forefront of addressing
“Otherwise, it is someone else’s CSR,” she of declining production levels. Even within
says. the coffee board, Juan says the challenge is
the sustainability of its projects, given that the
For its CSR undertaking, Figaro revived the trustees have their own businesses to run..

Green
banking
ASIDE FROM BEING A VITAL COG in
development banking, the Development Bank
of the Philippines (DBP) is also a major force
in green banking.

The bank raised the ante of green banking


when it recently signed an agreement with
the Japan Bank for International Cooperation
(JBIC) for a 10-billion-yen facility to enable
business enterprises to implement clean
development mechanism (CDM) projects.
Signing of agreement between DBP and JBIC officials
JBIC also funded the bank’s Environmental
Infrastructure Support Credit Program- Right now, 87% of the bank’s official and in support of DBP’s corporate social
Phase II with a combined credit component development assistance (ODA) funds are responsibility. This loan project adds on
of 20 billion yen and a technical assistance provided by JBIC. These loans are open more teeth and provides a real bite into
component of 529 million yen. The objectives to both public and private enterprises at DBP’s avowed commitment in developing
of the grant were to promote the protection and competitive terms through the bank’s retail and more socially responsible and ecologically
enhancement of the quality of the environment wholesale lending windows of the bank. sound operations in business and industries.
and to mobilize, encourage and support This only means that projects that adhere
activities and investments in environment “JBIC 6 is a great leap forward for DBP to CDM standards can be financed even in
-friendly projects. in its efforts of advocating green banking a more economic and longer basis,” says

The 2008 PBD Yearbook I 76

DBP Yearbook Inside Rev3 (Final)76 76 12/22/08 5:27:27 PM


DBP president and chief executive officer
Reynaldo David

The partnership between the two organizations


has been bolstered in this agreement through
financing of CDM projects that can contribute
to the reduction of global greenhouse gas
emissions while, at the same time, attract
investors through the monetary incentives
through CDM participation.

The facility finances the acquisition of fixed


assets, machinery andequipment; building
and plant construction; rehabilitation,
modernization or expansion of existing
facilities; civil works; and working capital
requirements of environment projects. To avail
of the facility, a project should either pass as a
CDM project or have direct or indirect business
relations with Japanese enterprises or market.

The CDM
Forestry program
CDM is one of the features of the Kyoto
Protocol which allowsindustrialized countries nourish nature’s growth.” fund of P50 million.
with a greenhouse gas commitment like
Japan to invest in programs aimed at reducing Forest program DBP’s initiatives have been recognized by
emissions in Third World countries as an the major institutions and agencies. Its forest
alternative to the more expensive emission Green banking started in 2005 when the program was cited recently as an outstanding
reduction schemes. bank launched its Forest Program help in the environmental project by the Association of
reforestation efforts of typhoon-stricken towns Development Financing Institutions in Asia
In May 2006, DBP transferred all CDM-related in Quezon. and the Pacific during its annual convention
functions to Financial Institutions-Business held in Colombo, Sri Lanka. In 2005, the
Development and Marketing from Program Today, the program covers 25 forest projects energy saving programs of the bank got a
Development. spanning 5,946 hectares nationwide. The five-star rating for the bank from the national
program aims to create a double impact government’s energy audit team.. The rating
The transfer generated the following by planting tress and integrating the rural was equivalent to a total percentage score of 90
accomplishments in 2006: communities into the mainstream of economy percent.
by providing livelihood opportunities.
• Build-up of nine potential CDM projects
that are included in the priority sectors of Further, the Institute of Corporate Directors
DBP; “This, of course, is on top of several other named DBP as the top government-owned
initiatives ranging from credit support to and -controlled corporation in the corporate
• Entry into two-profit or service-oriented technical assistance that promote the adoption governance scorecard. The ICC is a non-profit
collaborative arrangements for CDM
of environmentally-sound practices among organization advocating corporate governance
projects with international CDM brokers;
businesses,” says Santo Tomas. reform and professional corporate directorship
and
in the Philippines.
• Explored matching of loan building The program is being implemented through
requirements and available funds in DBP’s alliances with people’s organizations, In 2005, the Social Security System awarded
coordination with fund sourcing to
local government units, state colleges and DBP the best financial institution for social
address funding requirements of business
universities which work with concerned development loans.
development marketing on CDM
communities. Under the program, the bank
provides the funds for the acquisition of Sustainable development from within
seedlings as well as the establishment and
“The bank has always been a strong proponent maintenance of the project. Meanwhile, the The bank is also active in pursuing sustainable
of environmental stewardship,” she says. partners such as Department of Environment development in its own backyard. Bank
“As the need for ecological conservation, and Natural Resources, LGUs and other officers and employees are active in resource
preservation and rehabilitation become more agencies provide equity contribution. conservation by practicing prudence in the
pressing concerns, the bank has taken upon management, use and disposal of office
itself to adopt a more radical green approach Kreditanstalt fur Wiederaufbau, the German resources such as paper, water, electricity,
to business-decision-making, and to strive to development agency, provided the initial seed among others.

The 2008 PBD Yearbook I 77

DBP Yearbook Inside Rev3 (Final)77 77 12/22/08 5:27:28 PM


“Living up to our distinction as the first bank
in the country to be ISO 14001- certified, our
sustaining quest for continual improvement
in all our activities continued to be guided by
the processes and procedures defined under
the DBP environmental management system.
Looking forward, we intend to replicate our
success in this area with the rollout of EMS in
the branches starting with four pilot branches,”
says Santo Tomas.

Further, the bank’s EMS remains compliant


with the 2004 version of the ISO 14001
based on the upgrade audit done by the AJA
Registrars Limited on December 2005.

“In the home front, DBP has maintained


its resolve to consistently improve on its
environmental performance. Through
established processes and procedures under
the bank’s EMS, resource conservation and
environmental responsibility have become
ingrained in every aspect of DBP’s operations,” environment project
says David.

DBP is creating opportunities to enable other Mission statement David points out the gains achieved by
institutions to adopt environmental protection DBP’s CSR programs anchored on the green
and pollution prevention projects focusing Green banking is embodied in the bank’s banking have been a source of pride for the
on renewable energy sources, community environmental policy statement: “The DBP, bank. He said partner agencies such as the
water systems, pollution control and solid in its developmental mission and initiatives, JBIC, KFW and the World bank have made
waste management. Under its various lending is committed to environmental protection and significant contributions to help support DBP’s
facilities, the bank’s combined loan releases sustainable development and shall integrate and environmental programs on-stream.
for 2005 and 2006 totaled more than P6 billion. implement environmental considerations into
all aspects of its operations and services, asset “Sustainable progress must always be attached
management, and business decisions.” to an important corollary environmental
protection. Guided by this basic principle, our
Further, the bank commits to this policy to operations have always pivoted on proving that
profits can be compatible with preserving the
• Develop, implement, and continually
improve an environmental management gifts of nature,” he says.— Rizal Raoul Reyes
team;
• Encourage other institutions to pursue “Sustainable progress
environmental protection and pollution
must always be attached
prevention through the bank’s lending
and technical assistance programs, and to an important corollary
pursue environmental management environmental protection.
practices, including environmental due Guided by this basic
diligence inquiry to risk assessment and
management; principle, our operations
have always pivoted on
• Comply with relevant environmental laws,
regulations and agreements to which DBP proving that profits can be
subscribes; compatible with preserving
• Set and review environmental objectives the gifts of nature.”
and targets along identified significant — Reynaldo David,
environmental aspects; and president and chief
• Ensure that all employees of all levels are executive officer of the
made aware of and are actively involved Development Bank of the
Patricia Sto. Tomas, in the bank’s environmental policy and
programs through appropriate training and
Philippines
Chairman of the Development Bank
of the Philippines information.

The 2008 PBD Yearbook I 78

DBP Yearbook Inside Rev3 (Final)78 78 12/22/08 5:27:31 PM


The 2008 PBD Yearbook I 79

DBP Yearbook Inside Rev3 (Final)79 79 12/22/08 5:27:45 PM


Bankers
turned
volunteers
THE SPIRIT OF bayanihan lives in Land

Clean up time for employee-volunteers of Land Bank of the Philippines


Bank of the Philippine. The bank motivates
its people to practice corporate social
responsibility programs that embody “beyond
the bottom line” principles. Thus, giving
back to the community is a commitment that
Landbankers translate into practice.

Specifically, the LandBank’s CSR initiatives


are geared toward enabling the bank’s priority Wetland
sectors, employees, stakeholders and the in Eastern
communities it works with to attain a quality Samar, and
life leading to economic prosperity and well- the Vitali
being. Wetland in
Zamboanga.
At the forefront of the bank’s CSR initiatives This is
are its environment-related programs and another
projects, including tree-planting, the Adopt-a- tie-up with
Watershed program, Manila Bay Clean-up, and the DENR,
the adoption of six coastlands/wetlands and which
bird sanctuaries. aims to
support the
Every year, bank volunteers from Metro national government’s thrust
Manila, Luzon, Visayas, and Mindanao, troop for environmental protection and conservation.
to parks, public schools and other public areas In this project, the bank commits to take part
to plant trees. This has become a major part of in cleaning up the surroundings of the bird
the Bank’s anniversary activities every August. sanctuaries and planting mangroves. At the forefront of
In its Adopt-a-Watershed program, the bank Another bank program is its annual Manila Land Bank of the
commits to protect six critical watersheds in Bay Clean-up, wherein Landbankers from
the country. These are Magat River in Nueva the Head Office and NCR branches gather to Philippines’ CSR
Vizcaya, Angat-Ipo River in Bulacan, Bago help clean the Manila Bay. Now on its fifth initiatives are its
River in Negros Occidental, Binahaan River in year, the program has been further expanded
Leyte, Lasang River in Davao del Norte, and through a a memorandum of agreement with environment-related
Silway River in South Cotabato. In partnership the city of Manila, DENR, the Manila Yacht
with the Department of Environment and Club, and the 101st Squadron of the Philippine programs and
Natural Resources, the bank sees to it that Coast Guard Auxilliary. Under the MOA, the projects, including
regular clean-up and tree-panting activities bank will finance the construction of trash
are conducted in these watersheds. Bank traps in Remedios and Padre Faura in Manila. tree-planting, the
employees have also taken a personal stake The bank will also shoulder the gasoline and
in this program as they contribute their time engine-tune up expenses of the boats used to Adopt-a-Watershed
and effort for the areas’ rehabilitation and clean Manila Bay. program, Manila
protection.
In response to the environmental problems Bay Clean-up, and
Recently, the bank has adopted six coastlands/ hounding our society, LandBank is steadfast in
wetlands and bird sanctuaries in the country: its mandate and immerses its people in serving the adoption of six
the Las Piñas-Parañaque Critical Habitat the community. As the bank advances this coastlands/wetlands
and Eco-Tourism Area in Metro Manila, the meaningful cause, which to generate profit to
Cabusao Avian Sanctuary in Camarines Sur, finance countryside development, it drives and and bird sanctuaries.
the Lake Mainit in Surigao del Norte, the inspires its people to be drivers of change in
Olango Wetland Sanctuary in Cebu, the Guiuan the society.

The 2008 PBD Yearbook I 80

DBP Yearbook Inside Rev3 (Final)80 80 12/22/08 5:27:47 PM

Minat Terkait