Keeping the faith

By the Mindanao Bureau

MINDANAO, from the outside, has widely been perceived as that island in the south plagued by sectarian strife, with culturally rich but marginalized ethnic communities and machine gun-totting masked kidnappers who behead their victims when ransom is not paid.

There is also the long-peddled image of “The land of promise” — a beautiful, resource-rich island with vast rural areas, but where the risks are high and aplenty for investors and tourists.

These impressions are not entirely without basis, and could have easily been reinforced by scenes — which quickly spread on social media — of the outbreak of the siege in Marawi City carried out by heavily armed men brandishing Islamic State flags on May 23 last year, and the immediate decision that same evening by President Rodrigo R. Duterte to declare martial law, not just in the city, but covering the entire Mindanao.

The fighting in Marawi raged for nearly five months, dealing a blow to the enthusiasm among local non-Mindanaoan and foreign investors that was largely generated by the election of the country’s first president from the south.

But even as the Marawi crisis cast a shadow over Mindanao, stakeholders kept faith.

‘TWO MINDANAOS’
Mindanao Development Authority (MinDA) Deputy Executive Director Romeo M. Montenegro said members of the business sector did not waiver in their optimism in terms of being able to push investments and economic growth.

“The (Marawi) incident to a large extent has created perception issues in Mindanao, of course, with the issuance of travel advisories for certain embassies has also resulted in perhaps postponement of certain travels of nationalities scheduled to have business activities, meetings conducted here in Davao and any part in Mindanao,” Mr. Montenegro said.

But time and again, he said, “Mindanao has been able to demonstrate its resiliency.”

That resilience, to a certain extent, could be attributed to the island’s compartmentalized economies and development.

“The local economy in Marawi City and the surrounding areas will be adversely affected in the same way that Zamboanga City suffered from the bloody siege by the MNLF (Moro National Liberation Front) in 2013. But overall, the impact on Mindanao’s economy is limited,” General Santos City Chamber of Commerce and Industry President Raul Josefino F. Miguel said in an e-mail, quoting from a statement approved by the chamber’s board.

The World Bank, in its Oct. 2017 Philippines Economic Update that includes a special chapter on “Unlocking Mindanao’s Potential”, said its proposed strategic framework “recognizes that there are ‘two Mindanaos’: one that can be characterized as relatively stable and prosperous and another one that is suffering pervasive poverty, violent conflict and poor governance.”

This is true even in the security realm as well.

Lt. Gen. Benjamin R. Madrigal, who heads the military’s Eastern Mindanao Command, acknowledged in an interview that “[t]here are identified areas that are prone to conflict.” Dealing with insurgency, Mr. Madrigal said, is like “ironing clothes”: those parts that are not too wrinkled get just one pass, but the really creased parts need repeated pressing. “Kailangan balik-balikan natin (We need to keep going back),” he said.

GIVING EXAMPLE
Leaders of the Mindanao Business Council (MinBC) and the Davao City Chamber of Commerce and Industry, Inc. (DCCCII) recognize that divide and said local investors should be the first to expand their horizons.

Local investors who have long wagered on Mindanao, said MinBC Chair Vicente T. Lao in a recent interview, should capitalize on the currently upbeat business mood by coming up with projects not just in the cities but in other parts of Mindanao. “We may earn better outside (Mindanao), but the impact of our investments must be felt by our people instead,” he said.

DCCCII President Ronald C. Go, for his part, said as Davao City “has become a haven for investors” now, local businessmen should not rest and leave their money idle in banks. Davao’s business sector, he said, must “start looking for opportunities like the outsiders.”

“We don’t want to be left behind,” Ricardo F. Lagdameo, vice-president of homegrown Damosa Land, Inc. (DLI), said in a separate interview.

DLI is the real estate arm of one of the biggest Mindanao-based companies, the Floirendo-owned Anflo Management and Investment Corp. (Anflocor), whose flagship business is banana export.

“The main strengths of Mindanao are still in its agriculture, tourism and mining,” Mr. Lao said.

“These sectors will be able to take off if the government support it with legislation and policies.”

For agriculture, he said, “The government has to provide the means for Mindanao products to be able to find their way directly into the international markets and don’t have to be consolidated in Manila, because our shipping cost to Manila makes us expensive.”

“Post-harvest and cold storage facilities in the supply chain are also lacking.”

The limited capacity of Mindanao’s seaports was one of the main issues raised in the 2016 Mindanao Shipping Conference. The participants, mostly shipping firms and cargo service providers, cited limited berthing space, transit and cargo shed area for non-containerized cargo, container yard for containerized cargo, and passenger terminal buildings.

Also in January 2016, then European Union (EU) Ambassador to the Philippines Franz Jessen had already said the EU was looking at Davao City as a possible investment area once a free trade agreement (FTA) between EU and the Philippines is concluded. But the city has to first build better and bigger ports to facilitate logistics.

The DCCCII is also pushing for full liberalization of cabotage beyond Republic Act No. (RA) 10668 in order to further increase competition in the local shipping industry and, thus, reduce rates.

Former DCCCII President Bonifacio T. Tan said this particular law, enacted in July 2015, will make Mindanao’s exports more competitive as it would allow foreign ships to transport cargo directly between ports overseas and any point of destination in the Philippines. However, it does not allow foreign ships to transport cargo from one local port to another.

The tourism industry is also expected to benefit from improved ports because it will be able to tap cruise opportunities, Mr. Lao said. The Brunei, Indonesia, Malaysia, Philippines-East ASEAN Growth Area (BIMP-EAGA) Tourism Sector has identified cruise ship tourism as a potential main attraction for the sub-regional group. Mindanao and Palawan are the Philippine’s focus areas for the BIMP-EAGA.

Turning his attention to the mining industry, Mr. Lao said: “This sector should already be tapped to provide government the necessary funds to perform its social obligation and build the necessary infrastructure for Mindanao to take off.”

Referring to the past and the current administrations’ apparent bias against mining due to its purportedly damaging impact on the environment, he said: “There is such a thing as responsible mining.”

With the fighting in Marawi over and rehabilitation work getting wide attention — from government, the private sector, multilateral funding agencies and the non-government sector — there is renewed optimism for Mindanao.

“Next year (2018) will be an exciting year,” said Arturo M. Milan, a trustee of the DCCCII and adviser for Mindanao of Aboitiz Equity Ventures, Inc., one of the biggest players in the south’s power industry.

MinDA Chairman Datu Abul Khayr Alonto, speaking at the ASEAN + 6 Construction Forum held in Metro Manila on Oct. 25, a week after Mr. Duterte declared Marawi “liberated from the terrorist influence”, said the Mindanao Development Corridors Program has been expanded with the addition of a Bangsamoro Economic Corridor.

The five initial corridors are: Industrial Trade Cluster (Northern Mindanao and Caraga); Mariculture and Trade Cluster (Zamboanga Peninsula and other areas in the western part of Mindanao); Biodiversity and Eco-Tourism Cluster (parts of Davao and south-eastern coast of Mindanao); Food Basket Cluster (cutting across various regions) as well as the Food, Agri-Business and Logistics Cluster (various areas with the cities of General Santos and Davao as centers).

The corridors, Mr. Alonto said, are designed to ensure “that development is spread out to the countryside through connectivity infrastructure and purposive investments facilitation.”

On lingering security concerns, Brigadier General Bienvenido R. Datuin, Jr., deputy commander of the Philippine Army’s 10th Infantry Division, said their strategy is not simply containing lawless elements but to be part of “inclusive economic and human growth.”

“This is a collective security responsibility of everybody and we make sure that they (investors, local governments, communities) understand their role by giving us prior information,” said Mr. Datuin in an interview.

“So that hindi mabibigla ang mga tao (people don’t get surprised), like what happened in Marawi.” — Maya M. Padillo, Carmelito Q. Francisco, and Carmencita A. Carillo