MEMORANDUM

FOR : The Director

THRU : The Chief, Forest Investment Development Division (FIDD)

FROM : FIDD Technical Staff

SUBJECT : TRAVEL REPORT ON THE CONDUCT OF KEY INFORMANT

INTERVIEWS (KIIs) OF MOSSER ENVIRONMENT
CORPORATION, SAN CARLOS BIOENERGY, INC. RELATIVE
TO CASE DEVELOPMENT STUDY AS INPUT IN THE
FORESTRY INVESTMENT ROAD MAP (FIRM)

DATE :

Pursuant to Travel Order Nos. 1320 and 1321, representatives from the Forest
Investment Development Division (FIDD) of the Forest Management Bureau (FMB)
conducted a Key Informant Interview (KII) in one of the Integrated Forest Management
Agreement (IFMA) area that was pre-identified by the team and affirmed by the Department
of Environment and Natural Resources (DENR) Regional Office No. VI- Western Visayas.
The team was composed of For. Donna Riza C. Gopez, Economist III and For. Luimyla
Valente-Peña, Forest Management Specialist II.

The criteria in the selection of the area which were set by the FIDD Technical Staff,
were the following:
 The area to be selected should be compliant in forestry laws, administrative rules
and regulations, terms and condition of the tenure contract and related fees and
charges;
 The operation performance should be financially sound;
 The tenure agreement should be existing for at least five years; and
 The tenure area should be safe and secured.

Based from the criteria set, Mosser Environment Corporation (MEC) located in
Bacolod South Road, Himamaylan City, Negros Occidental with an approved IFMA
considered from among the organizations who produce woody biomass and fuelwood in the
island of Negros. The team also included in their itinerary the San Carlos Bioenergy, Inc.
(SCBI), one of the end user of woody biomass, in order to map the value chain of woody
biomass and how it contributes to the economic condition of the region and the Philippines in
general. The team also visited different private entities that develops plantation. One is under
a CBFMA (CALIFA) and the Energy Development Corporation-Negros Island Geothermal
Business Unit (EDC-NIGBU). Among the KII sources were the Chief Executive Officer of
MEC, MEC’s company forester, Division Manager of the Engineering Department of SCBI,
and Watershed Management Specialist of EDC-NIGBU. Details of the chosen IFMA holder is
shown below.

Table 1. Basic Information of Mosser Environment Corporation (MEC).

Year Established
Current CEO Alaine Ian Canson
Chief Operation Officer Vincent Fritz Cruz
Tenurial Instrument IFMA
Date granted
Total IFMA area awarded
Total no. of regular employees

RESULTS AND DISCUSSION

The island of Negros is known as the sugarcane producer capital of the country.
Approximately 70% of the country’s raw sugar source comes from it. To trace back the origin
of sugarcane plantation, it is said that Negros was once dominated by elite landlords called
hacienderos who acquired large hectares of land which they soon planted with sugarcane which
is not a sensitive type of crop and can be grown in almost all types of soil. From then on, the
sugarcane industry in the province has prospered and enormously helped the country to boost
its national economy.

There were, however, concerns that constantly troubles the environment sector when it
comes to sugarcane farming such as burning to clear the sugarcane plantation after harvest.
Moreover, since said plantations are located on relatively flat areas, they are highly susceptible
to floods. Nonetheless, most landowners and business magnates remain in this kind of industry
because the profit generation is immediate and continuous and its maintenance is manageable.

This does not stop the philanthropist, businessman and true environmentalist, Charles
W. Mosser from doing the thing that he adores. He was one of San Francisco’s top real estate
developers and property managers, whose humanitarian works included planting more than
three million trees in the Philippines. When Charles Mosser arrived in the Philippines and
married a Filipina in late 90s, his ultimate goal was to plant trees all over the island of Negros.
He was not oblivious to the fact that establishing plantations require spending millions. His
dream was to create a world full of luscious green vegetation given that previously, areas were
barren and cogonal. Many years later, his family eventually realized that all the seedlings that
Mosser have planted will reap benefits and will bring home fortune which later on led them to
apply for an IFMA. After Charles Mosser died in 2016, his family took over the company and
successfully competed and operated their wood business at present.

About a 4-hour drive from Bacolod City, MEC’s field office can be found along the
highway just across the municipal hall of Himamaylan City, Negros Occidental. The field
office can be accessed through daily commercial flights from Manila to Bacolod or Manila to
Dumaguete. Whether you come from Bacolod or Dumaguete, MEC’s field office can be
reached through private and public transports which will only differ on the travel time rendered.
 Mosser Environment Corporation is not a typical wood business company. Instead of
producing and selling round logs, they value wood chips and wood shavings derived therefrom
which is more sought after than the prior. Wood chips and shavings in quantity are manageable.
Primarily the use of wood chips and shavings are

FINANCIAL ANALYSES

The initial Benefit-Cost Analysis (BCA) were derived using the data/information
gathered from the KII and the existing costs required by the NGP. Some general assumptions
used in the computation are as follows:
 Spacing : 4 X 5 meters
 Stocking Density : 500
 Area : 150 hectares
 Mortality Rate : 20% allowance for replanting & 30% for field mortality
 Price for Labor : P200 per manday
 Price for wildling : P20 per seedling or wildling
 Labor requirements and infrastructures (standard costs used by the DENR)
 Production per member: 25 items rocking & lazy chairs per month (peak season)
: 10 items rocking & lazy chairs per month (lean season)
 Selling Prices : P1,500 per 1 rocking chair & P1,800 per 1 lazy chair
 Production Costs : P1,000 per 1 rocking chair & P1,200 per 1 lazy chair
 No. of years : 24 years for BCA
 First harvest : 12th year

Assuming 50 PO members or households would engage in Rattan production and

manufacture of furniture/items, the resulting values for the Net Present Values (NPVs) are
P3.05 Million at 12% discount rate and P0.38 Million at 15% discount rate (Table 2). The
computed Internal rate of Return (IRR) is 16%. On the other hand, assuming all or 75 PO
members or households would engage in Rattan production and processing, P7.16 Million
and P3.05 Million are the resulting NPVs at 12% and 15% discount rates, respectively
(Table 3). The computed IRR is 19%.

Table 2. Resulting Financial Values, assuming 50 PO members of UMACAP

engage in rattan production and processing.

Amount in Pesos Description

₱21,625,366.45 Present Value of Costs at 12%
₱15,659,706.51 Present Value of Costs at 15%

₱24,680,031.83 Present Value of Benefits at 12%

₱16,038,796.55 Present Value of Benefits at 15%

₱3,054,665.39 Net Present Value at 12%

₱379,090.04 Net Present Value at 15%

16% IRR
 Table 3. Resulting Financial Values, assuming 75 PO members of UMACAP
engage in rattan production and processing.

Amount in Pesos Description

₱29,852,043.72 Present Value of Costs at 12%
₱21,005,972.02 Present Value of Costs at 15%

₱37,020,047.75 Present Value of Benefits at 12%

₱24,058,194.82 Present Value of Benefits at 15%

₱7,168,004.03 Net Present Value at 12%

₱3,052,222.80 Net Present Value at 15%

19% IRR

The said financial values imply that Rattan production and manufacturing/
processing is feasible, assuming all other factors constant. Rattan in its raw material form
in the forest or CBFM area does not require much maintenance since it reproduces
naturally, provided also that standing trees, as the host species, would not be cut.

GENDER ROLE ANALYSIS

The traditional stereotype gender roles in MEC where men overpower women in terms
of planning, operation and decision-making is highly evident. The CEO quoted that in the wood
industry equation, the domination of men among the brood of employees are given. Since wood
business is a job requiring huge physical strength, the company preferred abled body men as
employee. By physical strength, MEC CEO means felling of trees, manual lifting of logs,
hauling. In a company with 36 regular employees, only 13% are female. They can be found
working in the accounting and administration departments. There are times that their services
are needed in the wood shop to sort the sizes of the wood lamina as the company recognized
that women have high attention to details.

PARTNERSHIP MECHANISM

Being in existence for 33 years, the relationship among and between PO members is
highly evident. Even though there are PO members who are quite successful than the others,
the proceeds and profit sharing is equally distributed among members. From the partnership
arrangement, UMACAP benefits from livelihood opportunities and technical assistance
provided by other parties. The income being generated from rattan manufacture goes to
establishment, improvement and repair of their facilities such as the mess hall, proposed
dormitory and commercial training center. In fact, the organization’s water reservoir initiative
has materialized because of the income they have generated over time. For each household, the
profit goes to addressing their basic needs, children’s education and health services. In
UMACAP, only the President decides on where to use their money, with consultation to other
PO members.
Given the chance to request for more livelihood activities for them to dwell upon, livestock
raising, and bamboo production and manufacture are their ultimate choices. Necessary
trainings and capacity buildings related thereto to be provided by concerned agencies will be
much appreciated by the organization. The officers of UMACAP also perceive several
potentials and opportunities at their disposal such as a formation of a furniture association
within the province of Leyte. UMACAP’s proposal to purchase machineries to fast track their
work is approved under the CARP funding. Figure 5 shows the linkages of different
stakeholders and partners to the PO under CBFMA.

Figure 5. Linkages of Different Stakeholders and Partners to the PO under CBFMA.

ISSUES AND CHALLENGES

With a depleting source of raw material for rattan within their approved CBFMA, the
organization is having a hard time to convince local gatherers to do the job for them as the
other sources of rattan is in far-flung areas, about 6-10km walk from the national highway.
Also, the competition from among barangays and within the abounding sources of rattan is
very high so they suggested that cutting permit must be confined only on same and adjacent
location of the approved CBFMA.

RECOMMENDATIONS

The DENR should execute a formal written agreement such as MOA or Partnership
Engagement between and among POs starting from the production of rattan raw materials, use
or rental of machineries and importation of manufactured and finished products for proper
monitoring of resources. It shall also be recommended to include a non-execution clause that
will subject the violator to appropriate fees and penalty.

The UMACAP has created committees, which are proved to be effective in

implementing the functions of officials and members. These are Plantation Establishment
Committee, Harvesting Committee, Monitoring Committee, Nursery Operations Committee,
Election & Education Committee, Livelihood Committee, and the Infrastructure Committee.
Not all POs have these kind of committees. Hence, it is recommended that said committees be
adopted or replicated in other POs or Community Associations.
 Based on the data of DENR Region 8, Rattan species are abundat in the region. Thus,
it is suggested to include Rattan as one of the priority species in the Regional Investment Plan,
incorporating the Marketing and Communication Plans for Rattan products.

FOR THE DIRECTOR’S INFORMATION AND FURTHER INSTRUCTION.

Donna Riza C. Gopez Luimyla Valente-Peña

Economist III Forest Management Specialist II