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as of May 2005 indanao A Publication of theM Mindanao Economic Development Council (MEDCo) Updates

investments AGRICULTURE

trANSPORTATION

fOreign trade

tOurism griculture a Rice Total palay production in Mindanao reached 3.4 million MT in 2004, 5.9% higher than the 2003 output. This output gain was likely the result of wider harvest area and improvement in yield per hectare in irrigated and rain-fed farms. ’ Among the regions, ARMM had the highest ex - Mindanao s ECONOMY pected output growth this year at 26.3% while Regions IX and XII likewise displayed signifi cant output increments at 6.1% and 3.9%, respectively. Harvest area in Northern Mindanao, however, n 2004, Mindanao’s economy consistently showed remarkable resilience was contracted by 4.1% due to the shifting of some producers to cash crops and the high cost brought about by the strong support of the agriculture and services I of palay inputs. sectors. Mindanao’s agriculture, fisheries and forestry sectors are expected to post a 2004 year-end growth of 3.8%. Services, the fastest-expanding sector in the past five (5) years and the largest contributor to Mindanao’s GDP growth in 2003, is projected to post a 4.4% year-end growth in 2004. The growth on the services sector was spurred mainly by the recovery of the transportation, communication and storage subsectors. The industry sector Corn likewise shall expand by 3.3%, propelled by significant contributions of the Corn production also performed signifi cantly with a 11.5% mining and quarrying and manufacturing subsectors. growth brought about by the 3.0% expansion in the harvest areas, availability of quality seeds and better market prices which encouraged farmers to plant corn.

Corn output increments were noted in most regions particularly in Regions X, XII and XIII. However, a slowdown in output was reported in ARMM due to slight worm infestation in Basilan, ﬂoodings in Maguindanao, landslide in Lanao del Sur and dry spell in Tawi-Tawi .

Livestock Livestock and poultry outputs also exhibited positive increments this year compared to their 2003 performance particularly carabao, goat, swine and chicken production. While these sectors maintained their favorable performance during the first half of the year, livestock and poultry producers increased production as market demand for these commodities dramatically increased especially during the last few months of 2004. griculture a Rice Total palay production in Mindanao reached 3.4 million MT in 2004, 5.9% higher than the 2003 output. This output gain was likely the result of wider harvest area and improvement in yield per hectare in irrigated and rain-fed farms. ’ Among the regions, ARMM had the highest ex - Mindanao s ECONOMY pected output growth this year at 26.3% while Regions IX and XII likewise displayed signifi cant output increments at 6.1% and 3.9%, respectively. Harvest area in Northern Mindanao, however, n 2004, Mindanao’s economy consistently showed remarkable resilience was contracted by 4.1% due to the shifting of some producers to cash crops and the high cost brought about by the strong support of the agriculture and services I of palay inputs. sectors. Mindanao’s agriculture, fisheries and forestry sectors are expected to post a 2004 year-end growth of 3.8%. Services, the fastest-expanding sector in the past five (5) years and the largest contributor to Mindanao’s GDP growth in 2003, is projected to post a 4.4% year-end growth in 2004. The growth on the services sector was spurred mainly by the recovery of the transportation, communication and storage subsectors. The industry sector Corn likewise shall expand by 3.3%, propelled by significant contributions of the Corn production also performed signifi cantly with a 11.5% mining and quarrying and manufacturing subsectors. growth brought about by the 3.0% expansion in the harvest areas, availability of quality seeds and better market prices which encouraged farmers to plant corn.

foreign trade transactions in Mindanao are projected to remain Fbullish this year as export growth is targeted to reach 5.9% from US$1.4 billion in 2003 to US$1.5 billion in 2004 . Our top ﬁve (5) traditional export products include coconut oil, banana, tuna, fresh pineapples and iron ore agglomerates. Nickel ores, along with iron ore agglomerates, were among the major industrial export products of Mindanao. Japan, USA, Netherlands, South Korea and Taiwan remain as Mindanao’s top ﬁve (5) export destinations. Combined US and Japan markets capture 71.7% of the total exports share of Mindanao. Singapore, meanwhile, is considered as a major export market for the island’s coconut oil and tuna products.

IMPORTS are projected to decline by 11.0% as of year-end n general, Mindanao is seen to enjoy a 22.6% 2004. Mindanao still regularly imports ﬂat-rolled products of iron, growth in trade surplus for 2004. wheat, milk, iron ore and concentrates and kraft liner. Majority I of Mindanao’s imports are sourced from USA, Vietnam, Brazil, Japan and New Zealand. Thailand and China emerged as two of our major non-traditional sources of products this period where we imported more than US$65.8 million worth of goods, particularly ﬂat-rolled products of iron, rice, fertilizers (urea and ammonium sulphate) and fabrics (textile). investments

A number of new investments continued to pour in Mindanao. Based on BOI data alone, the number of registered projects shot up by 38.1% in 2004 and targeted to generate 7,243 jobs. Total value of these registered investments reached P7.81 billion in 2004 or a 279.6% growth from P2.06 billion in 2003. Meanwhile, a total of nine (9) new investment projects were registered at the PHIVIDEC Industrial Authority with a total project cost of P1.6 billion and are expected to generate at least 283 job opportunities. Almost all Among the newly registered investments, the distillery of the BOI-registered investments were already in their plant of Ginebra San Miguel, Inc. emerged as the biggest commercial operations while six (6) of the PHIVIDEC- investor in PHIVIDEC with a P1.4 billion project cost. The registered projects are currently in their planning and said investment is already in its pre-construction stage. construction stages. Majority of these investments are Meanwhile, the Global Steel Works International, Inc. which geared on food processing and large-scale agricultural bought the National Steel Corporation (NSC) in Iligan City production. was the biggest investor registered in the BOI with a P6.1 billion project cost.

Mindanao Updates 4 oreign trade ransportation t employment n 2004, the economy employed 7.8 million Mindanaoans, of which more than half (51%) were in the agriculture Isector while 39% were in the services sector . An increase in employment was observed from the agriculture sector (3.7%) due to improved harvests and in the ser- The number of air passengers was significantly increased by vices sector (6.6%). Most of those who are in the services 7.3%. This was brought about by increased tourism activities sector either work in the wholesale and retail industry (e.g. among the Mindanao regions as well as the conduct of the malls and department stores) and in the transportation and important holidays (e.g. All Saint’s Day, Christmas, etc.) during communications industry. More than half (57%) of those the period. The Davao City International Airport is still the who have work were full-time employees , while 41% of the busiest airport in Mindanao accommodating approximately employed persons were underemployed or those who work 1.4 million incoming and outgoing passengers. Cagayan de less than 40 hours a week. Oro Airport is the next busiest airport admitting more than 0.5 million passengers. Air cargo likewise improved by 3.1% this Unemployment remains stable as it posted 7.9% of the la- period brought about by increased reliance of businessmen bor force compared to the country’s overall performance; a and passengers for faster shipment of goods and products reflection of the island’s vital capacity to generate enough to other destinations. jobs to keep up with labor force growth, which itself is a function of the rapidly rising population. Meanwhile, sea passenger performance posted a 2.5% increase this period. Disembarking passengers comprised the majority (51%) of the sea passenger traffic among the Mindanao ports while 49% were embarking passengers. The relative growth in the volume of sea passengers may still be attributed to the increased tourism activities in the various Mindanao regions. Sea cargo traffic, on the other hand, maintained its performance in 2004 which can be attributed to the continuous transportation of goods to and from the Mindanao ports. tourism indanao’s total visitor arrivals are estimated to grow by the tourism week observance of other key destinations in M8.9% from 2.2 million in 2003 to 2.4 million in 2004. Mindanao. While majority of these visitors are domestic travelers, the number of international visitors are also expected to rise. The Department of Tourism (DOT) further noted that the attractions of these areas for investment opportunities Regions X and XI are the major tourist destinations in provide reasons for both domestic and foreign visits. Mindanao with more than 1.2 million foreign and domestic tourists. The increase in tourist arrivals could be attributed As such, Americans, Japanese, Koreans, Chinese, to the various major activities in the regions like the Taiwanese, Australians, Singaporeans, Canadians, Britons Kadayawan Festival in Davao, the Cagayan de Oro City and Germans remain the top 10 patrons of Mindanao’s fiesta, the Hermosa Festival in Zamboanga as well as tourism industry.

Mindanao Updates 5 rices of basic goods and commodities, which are a rices Pprime concern for the consumers, slightly escalated in utlook for 2005 2004. Mindanao’s inflation rate reached 6.3% which is way p above the national inflation rate of 5.5%. o Growth is likely to improve for Mindanao in 2005, banking on the GDP In 2004, Mindanao was not spared by the general increase positive developments in the tourism, foreign trade transactions and in the prices of key goods and services, particularly food, agriculture sectors as the main drivers of growth. fuel, and transport. Supply constraints for food items such In 2005, GDP growth is expected to be within the as fish and corn have been the result mainly of higher prices Inflation range of 4.4-4.5%. At the sector level, agriculture is for these commodities. The Department of Agriculture (DA) While Mindanao’s inflation rate is slightly higher in 2004 than the projected to pick up by 3.9-4.0%. Industry is expected likewise reported that higher meat prices were a result of national average, it is expected that general price levels would to improve by 3.4% led by a stronger performance consumers buying fewer poultry products due to the avian remain stable next year. With this, inflation is projected to hover of the manufacturing sector. The services sector, flu scare. within the range of 3.0-4.0% in 2005 considering the impact of meanwhile, is expected to grow by 4.5-4.6%. the high prices of oil and the lagged effects of the weak currency While global demand and supply factors could rise in 2004. international oil prices to unanticipated levels, it is projected Employment that the higher cost of imported oil would lead to increases investments in domestic pump prices which would result to hikes in Unemployment is likely to stay at around 5.9-6.0% Among the investments that Mindanao could look forward to transport fares and power rates. of the total labor force in Mindanao. This percentage is still lower than the national average, considering in 2005 include: employment opportunities brought about by renewed The Japanese-owned Pilipinas Kao Inc. (PKI), which is investing investor confidence. P3.7 billion to raise its production capacity for fatty alcohol. PKI rivate building will put up a facility with an annual production of 100,000 tons Palay and Corn replacing its existing plant in Jasaan, Misamis Oriental. p Palay and corn production outputs are projected construction to surpass 2004 targets by more than 3.3%. While KORESCO, a South Korean resort and development company is expected to construct a 50-room leisure hotel at Pueblo Golf onsistent with the increase in the number of new investments and business these projections are quite optimistic, Mindanao Estates in Cagayan de Oro City. The hotel will be completed in Cexpansions, the construction industry likewise performed significantly during the farmers should also be informed that crop outputs third quarter of 2005. period. The number of new building constructions in Mindanao soared by 22.3% to could likely be affected by the drastic changes in oil Sumitomo Fruits Corp. (SUMIFRU) is expected to pour in 11,835 during the first half of 2004 from 9,678 in the same period last year. Total cost prices as farm inputs such as seeds and fertilizers would also increase. additional P1.5 billion investments for its banana production of these constructions increased by 27.2% valued at P4.78 billion from P3.76 billion in expansion in Davao this year. The said investment shall boost 2003. Exports agribusiness in Mindanao and would generate employment of From 2005 to 2006, exports of goods are expected at least 6,000 jobs. Most of the building constructions for the 1st semester of 2004 in Mindanao were new to grow faster than in 2004, by around 11.5% pulled Business leaders in the country have likewise recognized residential buildings (7,453) and non-residential buildings (1,239) followed by alterations up by the strong market demand for Mindanao’s Mindanao’s potential to become the next top supplier of skilled and repairs (3,141) of existing buildings. Total value of new building constructions traditional agricultural products such as coconut oil, labor for the outsourced information and communications reached P4.35 billion, a 23.6% increase from P3.52 billion in the same period last year. banana, tuna and pineapple. technology (ICT) services sector. In fact, President Arroyo Value of alterations and repairs, on the other hand, grew by 25% from P0.24 billion last inaugurated the first call center in Davao City called CyberCity Imports Teleservices last September 2004. year Forecasted to grow by around 6.5% because of the higher need for semi-processed inputs such as Two (2) more call center companies are expected to put The value of construction projects this period has gone up due to the increase in the up their business in Mindanao this year, particularly in Davao kraft liner, alloy and fertilizers which shall be used in and Cagayan de Oro. In addition, several contact center prices of construction materials such as cement and steel . The rise in residential producing higher value added products for export. construction activities may indicate an increased spending power by the consumers companies based in Luzon such as People Support are already looking at the manpower resources of Mindanao to especially for those who receive remittances from their OFW household members tourism supply their manpower requirements for its Manila and Cebu which enabled them to build or repair their houses . Similarly, the Home Development Regional tourism officials also hope that the call center operations. Mutual Fund (PAG-IBIG Fund) reported a surge in housing loans due to the increase in improving peace and order condition in Mindanao loan to collateral ratio which allowed homebuyers to borrow without the need for equity. would negate projections of a slowdown starting With the Supreme Court ruling of the new mining law as next year. This would then allow foreign visitors to constitutional, the mining industry shall become a key With this, about 20,565 housing units were constructed in the whole country for the investment player in Mindanao in 2005. Mindanao’s rich first four months of this year as against 8,645 units in 2003, showing a 138% increase enjoy the island’s traditional sites and discover new mineral resources are eyed as a potential new investment hot according to HDMF. points of interests within the regions of the island. spot in the country.

Mindanao Updates 6 Mindanao Updates 7 rices of basic goods and commodities, which are a rices Pprime concern for the consumers, slightly escalated in utlook for 2005 2004. Mindanao’s inflation rate reached 6.3% which is way p above the national inflation rate of 5.5%. o Growth is likely to improve for Mindanao in 2005, banking on the GDP In 2004, Mindanao was not spared by the general increase positive developments in the tourism, foreign trade transactions and in the prices of key goods and services, particularly food, agriculture sectors as the main drivers of growth. fuel, and transport. Supply constraints for food items such In 2005, GDP growth is expected to be within the as fish and corn have been the result mainly of higher prices Inflation range of 4.4-4.5%. At the sector level, agriculture is for these commodities. The Department of Agriculture (DA) While Mindanao’s inflation rate is slightly higher in 2004 than the projected to pick up by 3.9-4.0%. Industry is expected likewise reported that higher meat prices were a result of national average, it is expected that general price levels would to improve by 3.4% led by a stronger performance consumers buying fewer poultry products due to the avian remain stable next year. With this, inflation is projected to hover of the manufacturing sector. The services sector, flu scare. within the range of 3.0-4.0% in 2005 considering the impact of meanwhile, is expected to grow by 4.5-4.6%. the high prices of oil and the lagged effects of the weak currency While global demand and supply factors could rise in 2004. international oil prices to unanticipated levels, it is projected Employment that the higher cost of imported oil would lead to increases investments in domestic pump prices which would result to hikes in Unemployment is likely to stay at around 5.9-6.0% Among the investments that Mindanao could look forward to transport fares and power rates. of the total labor force in Mindanao. This percentage is still lower than the national average, considering in 2005 include: employment opportunities brought about by renewed The Japanese-owned Pilipinas Kao Inc. (PKI), which is investing investor confidence. P3.7 billion to raise its production capacity for fatty alcohol. PKI rivate building will put up a facility with an annual production of 100,000 tons Palay and Corn replacing its existing plant in Jasaan, Misamis Oriental. p Palay and corn production outputs are projected construction to surpass 2004 targets by more than 3.3%. While KORESCO, a South Korean resort and development company is expected to construct a 50-room leisure hotel at Pueblo Golf onsistent with the increase in the number of new investments and business these projections are quite optimistic, Mindanao Estates in Cagayan de Oro City. The hotel will be completed in Cexpansions, the construction industry likewise performed significantly during the farmers should also be informed that crop outputs third quarter of 2005. period. The number of new building constructions in Mindanao soared by 22.3% to could likely be affected by the drastic changes in oil Sumitomo Fruits Corp. (SUMIFRU) is expected to pour in 11,835 during the first half of 2004 from 9,678 in the same period last year. Total cost prices as farm inputs such as seeds and fertilizers would also increase. additional P1.5 billion investments for its banana production of these constructions increased by 27.2% valued at P4.78 billion from P3.76 billion in expansion in Davao this year. The said investment shall boost 2003. Exports agribusiness in Mindanao and would generate employment of From 2005 to 2006, exports of goods are expected at least 6,000 jobs. Most of the building constructions for the 1st semester of 2004 in Mindanao were new to grow faster than in 2004, by around 11.5% pulled Business leaders in the country have likewise recognized residential buildings (7,453) and non-residential buildings (1,239) followed by alterations up by the strong market demand for Mindanao’s Mindanao’s potential to become the next top supplier of skilled and repairs (3,141) of existing buildings. Total value of new building constructions traditional agricultural products such as coconut oil, labor for the outsourced information and communications reached P4.35 billion, a 23.6% increase from P3.52 billion in the same period last year. banana, tuna and pineapple. technology (ICT) services sector. In fact, President Arroyo Value of alterations and repairs, on the other hand, grew by 25% from P0.24 billion last inaugurated the first call center in Davao City called CyberCity Imports Teleservices last September 2004. year Forecasted to grow by around 6.5% because of the higher need for semi-processed inputs such as Two (2) more call center companies are expected to put The value of construction projects this period has gone up due to the increase in the up their business in Mindanao this year, particularly in Davao kraft liner, alloy and fertilizers which shall be used in and Cagayan de Oro. In addition, several contact center prices of construction materials such as cement and steel . The rise in residential producing higher value added products for export. construction activities may indicate an increased spending power by the consumers companies based in Luzon such as People Support are already looking at the manpower resources of Mindanao to especially for those who receive remittances from their OFW household members tourism supply their manpower requirements for its Manila and Cebu which enabled them to build or repair their houses . Similarly, the Home Development Regional tourism officials also hope that the call center operations. Mutual Fund (PAG-IBIG Fund) reported a surge in housing loans due to the increase in improving peace and order condition in Mindanao loan to collateral ratio which allowed homebuyers to borrow without the need for equity. would negate projections of a slowdown starting With the Supreme Court ruling of the new mining law as next year. This would then allow foreign visitors to constitutional, the mining industry shall become a key With this, about 20,565 housing units were constructed in the whole country for the investment player in Mindanao in 2005. Mindanao’s rich first four months of this year as against 8,645 units in 2003, showing a 138% increase enjoy the island’s traditional sites and discover new mineral resources are eyed as a potential new investment hot according to HDMF. points of interests within the regions of the island. spot in the country.

Mindanao Updates 6 Mindanao Updates 7 Mindanao’s DEVELOPMENT STRATEGIES The 10-Point Agenda put forward by President Gloria-Macapagal Arroyo has particularly afforded the strategic opportunity for Mindanao to signiﬁcantly contribute to the overall development efforts of the national government. It may be noted that the development strategies for Mindanao aptly mirror the Balancing of the Budget current thrusts of the national government.

New Cores of Electricity, Gov’t Centers Water to Barangays Classrooms, Buildings, Housing Desks, Centers Chairs, RORO Books, and Transport Scholarships Networks

Digital Infrastructure

Automation of Electoral Process

Support to Peace Process Job Creation, SME, and Agri-Business Development ONTINUING EFFORTS FOR MINDANAO’S CFULL PHYSICAL INTEGRATION

Mindanao’s ive (5) Operational Task Forces in Mindanao that facilitate interaction and collaboration Fbetween and among concerned agencies and organizations towards the development of the DEVELOPMENT STRATEGIES infrastructure sector in the island are supported by Infrastructure and Monitoring Advisory Groups The 10-Point Agenda put forward by President (IMAGs). Gloria-Macapagal Arroyo has particularly afforded the strategic opportunity for Mindanao to signiﬁcantly The IMAGs are ad hoc mechanisms designed to monitor and contribute to the overall development efforts of speed up the progress of infrastructure projects in Mindanao. the national government. It may be noted that the Task Force The IMAGs have continuously worked with local government development strategies for Mindanao aptly mirror the Balancing of the Budget units and national line agencies in resolving problems on Mindanao Arterial Roads Task Force current thrusts of the national government. Mindanao Water Transport Task Force project implementation. The IMAGs promote transparency Mindanao Watershed and Irrigation Task Force in government undertakings because all sectors are well New Cores of Electricity, Mindanao Energy Task Force represented. Chaired by the Local Chief Executive of the project Gov’t Centers Water to Barangays Mindanao Information and Communications area where implementation is most problematic, the IMAGs in Classrooms, Technology Task Force Mindanao have been very successful that various groups are Buildings, Housing lobbying for its replication in other areas of the country. Desks, Centers Chairs, RORO Books, and Transport Scholarships Networks total of 23 IMAGs in Mindanao were created Accomplishments since 1996. Of these, two (2) IMAGs ceased (since 1996) Digital Infrastructure A to operate due to project completion and/or loan cancellation/expiration. The remaining 21 a) consideration of projects by donors (e.g., Davao-Bukidnon operational IMAGs cover the following projects: Road, Malalag-Malita-JAS Road); Malalag-Malita-Jose Abad Santos Road Project; (b) inclusion of project gaps in on-going package/s; Automation of Zamboanga-Pagadian Road Project; Philippine- Electoral Process (c) extension of ODA loans; Japan Friendship Highway Rehabilitation Project; (d) fasttrack release/s of project funds; Support Davao-Surigao Coastal Road Project (Davao (e) facilitate right-of-way acquisition and quarry sites; to Peace Oriental Section); KFAED-Second Kuwait (f) signing of Memorandum of Agreement between DPWH Process Job Creation, SME, Road Projects; Malitubog-Maridagao Irrigation and electric utility companies; and Agri-Business Project; Saug Multi-Purpose Irrigation Project; (g) membership of the IMAG Chairs in DPWH Bids and Development Dipolog, Pagadian, Cotabato, Sanga-Sanga, Awards Committee; and and Laguindingan Airport Projects; Mindanao (h) designation of DPWH Regional Directors as Special Container Terminal Port Project; Butuan City Project Supervisors for foreign-assisted projects. Foreign-Assisted Projects (formerly the IMAG for the Lower Agusan Development Project); and Projects under the DPWH-ARMM Engineering Districts.

Mindanao Updates 9 ONTINUING EFFORTS FOR MINDANAO’S CFULL PHYSICAL INTEGRATION As of 18 June 2004, 60.13% of Mindanao’s national roads have been paved . This means that about 3,959 km of the island’s national roads is asphalt and/or concrete, while around Roads 2,625 km is still gravel and/or earth roads . However, there are a number of major ODA- funded arterial road projects that are currently being implemented in Mindanao, such as but not limited to, KFAED Assisted Second Mindanao Roads Improvement Project, Zamboanga- Pagadian Road, Philippine-Japan Friendship Rehabilitation Project, Surigao-Davao Coastal Road (MTPDP priority), and Malalag-Malita-Jose Abad Santos Roads.

Currently, the MEDCo is monitoring six (6) foreign-assisted road project packages in Mindanao namely: 6th ADB Road Project, Philippine-Japan Friendship Highway Rehabilitation Project, Phase 2, National Roads Improvement Project 1, Zamboanga-Pagadian Road Project, KFAED- Mindanao Second Roads Improvement Project, 2nd Magsaysay Bridge and Butuan City Bypass Road. Please refer to attached Fig. 1 & 2 for the status of each project component.

The President’s Bridge Program (PBP) covers the three (3) UK-assisted projects using the Mabey and Bridges Johnson modular steel bridges namely: Tulay ng Pangulo sa Salam, Tulay ng Pangulo sa Barangay, and Tulay ng Pangulo sa SZOPAD/Mindanao.

As of December 2004, the accomplishments of the three (3) projects are as follows:

Target Completed On-going Remarks Tulay ng  Project Cost Php 4.5 billion None, but Pangulo  Loan expired in Dec. 2001 163 88 44 sa Salam,  GOP fund for the bridge substructure was used to suspended Phase II pay customs duties and taxes

Tulay ng  Mindanao and Palawan There are also Pangulo sa 300 47  Implementation period: 2002-2005 SZOPAD/ 526 (280 are in (45 are in other ODA-funded  Cost-Php 9,867,118,000 Mindanao, Mindanao) Mindanao) bridge projects  Cost per bridge: Php 18,758,684.0 Phase IV which are currently implemented in Tulay ng Pangulo sa  Luzon and Visayas and part of Mindanao Mindanao such Barangay, 402 203 67  Implementation period: 2001-2005 as the 6th ADB Phase III  Cost-Php 6,806,126,000 Bridge Component; (16 August  Cost per bridge: Php 16,930,662.0 and Austrian and 2004) UK-Assisted Bridge Projects.

Mindanao Updates 10 ONTINUING EFFORTS FOR MINDANAO’S ONTINUING EFFORTS FOR MINDANAO’S FULL PHYSICAL INTEGRATION CFULL PHYSICAL INTEGRATION he Mindanao Container Terminal Project (MCTP) in Tagoloan, Misa- Tmis Oriental is now operational after the temporary restraining order was lifted in January 2005. The terminal has an area of 30.8 hectares and can accommodate 270,000 vans per year. Seaports Mindanao has 12 base ports The Growth with Equity in Mindanao (GEM) Program Phase 2 has already located in: implemented the improvement of the ports in Bongao, Lamitan, Maluso, Siasi, Siocon and Maimbung and these are expected to be completed in Surigao Nasipit Cagayan de Oro 2005. Details on the status of each project are shown in attached Fig. 3. Iligan Ozamis Polloc Davao General Santos Zamboanga The World Bank (WB) – ARMM Social Fund (ASF) funded the rehabilitation Jolo Bongao Cotabato and construction of the Jolo Base Port and the construction of the Passen- ger Terminal Building in Bongao (a complementary project of the Bongao Some 39 feeder ports are also located in Mindanao namely: Port Improvement Project undertaken by the GEM Program) which are now in the bidding stage. Dapa, Lipata, Tandag, Cantilan, San Jose, Aras- Arasan, Doña Helen, Del Carmen in Siargao In October 2004, the construction of a passenger terminal building, which Island, Socorro, Mangagoy, Dapitan, Jimenez, is one of the components of the construction and rehabilitation of the Polloc Silanga, Sindangan, Lamao, Nabilid, Balingoan, Base Port Project, was already completed. This project is ﬁnanced by the Benoni, Balbagon, Opol, Guinsiliban, Kolambu - WB-ASF. Other remaining components of the WB-ASF such as repair of gan, Tubod, Butuan, Masao, Mati, Glan, Pagadi - transit sheds, concreting of road network within the port operational zone an, Malangas, Ipil, Kalamansig, Lamitan, Isabela, and replacement of rubber dock fenders, are already in the bidding stage. Siasi, Kuala Baru, Bongao, Sitangkai, Malalag, and Sta. Ana

he original scope of the Third Airports Development Project (TADP) was reduced Tto three (3) components that include Aeronautical Fixed Telecommunications Airports Network / Aeronautical Information System (AFTN/AIS), related consultancy, and International Civil Aviation Organization (ICAO) training. The related consultancy component which includes design and engineering, as well as the first stage of the ICAO training component is already 100% completed. On the other hand, the AFTN/AIS component has been cancelled due to non-extension of the loan by the ADB which was triggered by the unresolved case filed by the TADP contractor against some DOTC officials. The undisbursed amount of the reduced TADP will be Mindanao has the following airport terminated in favor of ADB. However, the Southern Philippines Airport Development facilities: Project (SPADP), under which the civil works of the original TADP scope will be pursued, is not included in the budget strategy of the DOTC until CY 2007. Three (3) alternate international airports located in Meanwhile, the scope of works has been finalized for the Intermodal Transport Zamboanga, General Santos, and Davao; three (3) trunkline airports located in Cotabato, Cagayan de Oro, Development Project (ITDP). The PPTA will focus on the airport projects but this may and Buayan; 13 secondary airports located in Sanga- be expanded to a broader scope subject to the confirmation of the Government of the Sanga, Jolo, Dipolog, Pagadian, Ozamis, Malabang, Philippines (GOP). The Memorandum of Agreement (MOA) between the DOTC and Iligan, Allah Valley, Mati, Bislig, Butuan City, Tandag, ADB will be finalized upon the completion of the Phase 1 of this project. Evaluation of and Surigao City; and seven (7) feeder airports located consultants who will undertake the study has been completed and the contract was in Cagayan de Sulu, Camiguin, Ipil, Liloy, Siocon, Siargao, and Malaybalay. awarded to the Louis Berger International.

Mindanao Updates 11 ONTINUING EFFORTS FOR MINDANAO’S CFULL PHYSICAL INTEGRATION

indanao has 959,000 hectares of potential irrigable area and 278,000 Mhectares of service area. As of December 2003, irrigation development in Mindanao is pegged at 29.41%. Of the total 282,021 hectares service area of Mindanao, 55.67% is served by national irrigation systems, 35% by communal irrigation systems and 7% by private systems. The completion of the following ODA-funded irrigation projects such as Lower Agusan Development Project, Bubunawan River Irrigation Project, and Malitubog-Maridagao Irrigation Project (MMIP) will help address Mindanao’s requirements. Please refer to attached Fig. 4 for the status of these projects. Irrigation

indanao’ s barangay energization Mlevel as of June 2004 was pegged at 81%. While this is already quite high, Mindanao still lagged behind Luzon (96%) and V isayas (90%). Energy ST A TUS OF BARANGA Y ELECTRIFICA TION as of June 2004 (Electric Cooperative/Utilities Coverage)

Region City/Municipality Barangays The implementation of the Un- Coverage Energized Coverage Energized % Mindanao T ransmission energized Augmentation Program IX 72 72 1,869 1,407 75 462 (MINT A), as well as other X 85 85 1,833 1,659 91 174 power supply enhancement XI 43 43 894 821 92 73 projects, is already ongoing. XII 46 46 1,024 861 84 163 ARMM 99 99 2,609 1,704 65 905 The program is envisioned CARAGA 73 73 1,308 1,224 94 84 to provide the medium and T OT AL 418 418 9,537 7,697 80 1,861 long-term solutions to the MINDANAO potential Mindanao power Source: National Electriﬁcation Administration (NEA) shortage beginning 2005.

Telecommunications he interconnection process in Isulan,Sultan Kudarat (between SKTSI and T elOf) is ongoing. TThe interconnection agreement between Cruztelco and T elOf in Prosperidad, Agusan del Sur were already signed, while Philcom was already interconnected with Bayantel and Cruztelco in San Francisco, Agusan del Sur . Interconnection is also ready for activation between Bayantel and Cruztelco in Nasipit, Agusan del Norte.

As of March 2005, there are already 21 total interconnection agreements in Mindanao. The completion of the aforementioned interconnection agreements will fully interconnect all exchange carriers in Mindanao.

Mindanao Updates 12 ONTINUING EFFORTS FOR MINDANAO’S NGOING INITIATIVES IN SUPPORT OF THE FULL PHYSICAL INTEGRATION O REVITALIZATION OF BIMP-EAGA CIQS Initiative

Training Workshops on Project Formulation for the C-I-Q-S sectors in Region IX, made possible through Australian funding support, were conducted to provide CIQS agencies in Region IX with the necessary tools for project development and formulation. The ﬁnal output/proposals are currently being consolidated by NEDA IX. Prior workshops have been conducted for the immigration and quarantine sectors. The following training workshops were conducted for the security and customs sectors:

Security Sector - 14 and 15 Feb 2005, Grand Astoria Hotel, Zamboanga City Customs Sector - 17 and 18 Feb 2005, Grand Astorial Hotel, Zamboanga City

Expansion of Sea Linkages

The Zamboanga-Sandakan sea route has continued to operate with the regular shipping services of SRN Fast Seacrafts and Aleson Shipping Lines. This linkage has been existing since the early years of BIMP-EAGA and has been providing vital support to the conduct of cross-border trade between the traders of Zamboanga Peninsula and their counterparts in Sandakan, Malaysia.

Relatedly, bilateral efforts are being undertaken either through the initiative of the private or the public sector for the establishment of additional sea linkages that will connect Mindanao to other strategic points in BIMP-EAGA. An exploratory meeting was

Mindanao Updates 13 NGOING INITIATIVES IN SUPPORT OF THE O REVITALIZATION OF BIMP-EAGA Expansion of Sea Linkages

held between the management of SRN Fast Seacrafts and the officers Sabah Ports Authority to discuss infrastructure requirements at the Port of Lahad Datu in view of the strong interest of the said shipping company to provide shipping services from Zamboanga and Bongao to Lahad Datu, Malaysia. An office is currently being constructed at the Port of Lahad Datu to administer CIQS procedures for the proposed sea route. SRN Fast Sea Crafts, Inc. will commence regular voyage as soon as the office is completed.

The Zamboanga-Tarakan sea route was also identiﬁed as an offshoot of the Business Mission to Tarakan, East Kalimantan, Indonesia, on 31 May to 2 June 2004. The delegation from Zamboanga has recommended the opening of this sea route after they discovered the potential of having cross-border trade with Tarakan. DTI IX recommended the proposal to Aleson Shipping Lines.

Support to Sea Transport Services

The Uniform Port Tariff Agreement (UPT) between the Philippines and Brunei Darussalam has been extended by another two (2) years effective 27 April 2005. This is in addition to the UPT arrangement between the Philippines and Indonesia which was extended effective 16 January 2004.

Pursuant to the terms of the said arrangements, all vessels carrying the ﬂag of Indonesia/Brunei and the Philippines which are accredited to operate under the BIMP-EAGA Program shall Meanwhile, the Philippine Ports Authority be entitled to special port charges on vessels, as follows: (PPA) is currently negotiating with its counterpart in Malaysia for the establishment Port Dues - US $ 0.040 per GRT of UPT agreement between the Philippines Dockage - US $ 0.020 per GRT per day and Malaysia.

Mindanao Updates 14 NGOING INITIATIVES IN SUPPORT OF THE NGOING INITIATIVES IN SUPPORT OF THE REVITALIZATION OF BIMP-EAGA O REVITALIZATION OF BIMP-EAGA

Expansion of Air Linkages

t present, there are three operating air linkages from points in Mindanao to strategic destinations in ABIMP-EAGA. These are the (1) Davao-Manado, (2) Zamboanga-Sandakan, and (3) Zamboanga- Kota Kinabalu. There are also on-going initiatives to mount two (2) additional air routes that will link Davao to Brunei and Davao to Melonguane, Talaud, Indonesia.

The Davao-Manado air route was used to be served by two carriers—Merpati Airlines and Bouraq Airlines. However, Bouraq Airlines temporarily suspended its operation in December 2004 as it needed to change its charter in the Indonesian side and upgrade its aircraft to be able to provide convenient services to the growing number of passengers from Davao City to Manado City and vice-versa. Meanwhile, Merpati Airlines continues to serve this route every Monday.

On the other hand, cross-border trade and investment activities between Zamboanga Peninsula and neighboring cities of Malaysia expanded with the recent opening of additional BIMP-EAGA air linkages connecting Zamboanga City to Sandakan and Kota Kinabalu by South Phoenix Airways. The airline company commenced ﬂying to Sandakan on 22 December 2004 on a bi-weekly basis, (every Wednesdays and Saturdays) and to Kota Kinabalu on 7 April 2005. South Phoenix now regularly ﬂies to Kota Kinabalu every Sundays.

Mindanao Updates 15 NGOING INITIATIVES IN SUPPORT OF THE O REVITALIZATION OF BIMP-EAGA

Expansion of Air Linkages

As the Philippine-designated airline representative to the BIMP-EAGA Air Alliance Program, South Phoenix Airways shall open additional air services in the sub-region. With the facilitation of MEDCo, South Phoenix is in the final stage of mounting flights from Davao City to Bandar- Seri Begawan, Brunei Darussalam. This proposed route is envisioned to strengthen trade and investment activities between the area since this is strongly backed with related initiatives such as the forthcoming establishment of the Brunei Consular Office in Davao City, as well as the creation of the Philippine-Brunei Business Council.

Relatedly, MEDCo is working closely with its counterparts in Indonesia to facilitate the establishment of the Davao-Melonguane, Talaud, Indonesia air linkage. The proposed route was jointly endorsed by the private sector from the Jose Abad Santos Glan Sarangani—Cooperation Triangle (JAGS-CT) and their counterparts in the Regencies of Talaud and Sangir during the JAGS-CT Trade Mission to Indonesia on 17- 24 January 2005. The National Government of Indonesia strongly supports this initiative as a strategy to accelerate economic development in borders of Talaud.

Support to Air Transport Services

s of May 2004, the revised Memorandum of Understanding (MOU) on the Expansion of Air Linkages shall be reviewed and discussed for adoption during the 9th Working Group Meeting Awhich will be hosted by Malaysia in 2005. The revised MOU shall cover multiple airline designation, provision of additional designated points, cooperative agreements (code sharing), and the Implementation of the Fifth Freedom Trafﬁc Rights (FFTR) within the BIMP-EAGA.

On the other hand, the extension of the travel tax exemption program, which expired last June 2004, is one of MEDCo’s major advocacies in support of the development of air and sea linkages and to enhance trade and greater people mobility in the sub-region. MEDCo has gained the strong support of both the private sector and relevant agencies of the government on this matter. Worth citing is the initiative of the members of the House Special Committee for BIMP-EAGA in jointly endorsing the passage of a House Resolution that will urge the President to extend travel tax exemption for another period of ﬁve years. The said resolution is currently reviewed by the House Committee on Rules.

Mindanao Updates 16 NGOING INITIATIVES IN SUPPORT OF THE O REVITALIZATION OF BIMP-EAGA

BIMP-EAGA Directives The Informal Senior Ofﬁcials Meeting (ISOM) was conducted on 14-15 April 2005 in Kota Kinabalu, Sabah, Malaysia.

Among the major agreements reached during the Meeting are as follows:

BIMP-EAGA Roadmap to Development (CY 2005-2010)

The Senior Officials (SOs) conformed to the goals of BIMP-EAGA within the 6-year period as stated in the draft roadmap. The ultimate goal of the roadmap is to narrow the “development gap” across and within the EAGA region, as well as that of the ASEAN 6. In order to achieve this, the immediate goal is to increase the level of trade, investment and tourism within and outside BIMP-EAGA. Nevertheless, the SOs suggested for a review of the strategic measures and set of priorities of the roadmap to make it more specific/doable and to clearly define its measurable/quantifiable targets. Thus, a BIMP-EAGA National Secretariats Meeting (NSM) is scheduled on 27-28 May 2005 in Manila in order to thresh-out this concern and, hopefully, firm-up the entire content of the roadmap. The said roadmap is due for approval during the 13th Senior Officials and 10th Ministerial Meeting (SOMM) on 05-06 September 2005 in Brunei Darussalam. It will later be presented during the BIMP-EAGA Leaders Summit in December this year.

Establishment of a Davao-Brunei Air Connection and Brunei Consular Ofﬁce in Davao City

Brunei Darussalam conﬁrmed its intention to establish a Davao-Brunei air linkage within the year, as well as set-up a consular ofﬁce in Davao City some time November this year.

Mindanao Updates 17 NGOING INITIATIVES IN SUPPORT OF THE O REVITALIZATION OF BIMP-EAGA

Status of Flagship Programs and Projects of the Clusters

On SME Development. Under the project’s implementation scheme, the Philippines will handle the production of poultry (chicken) products; Indonesia will supply production inputs (corn feeds); and Brunei Darussalam will handle the halal certiﬁcation process and, together with Malaysia, market and export these products to the Middle East. A BIMP Poultry Corporation will be registered in Brunei to comply with SEC requirements. The ﬁrst shipment of two (2) container vans is targeted to reach the Middle East within the year.

On Joint Tourism Development and Transport/Infrastructure Development. A back-to-back meeting of the Transport Cluster and BEBC Tourism Cluster is scheduled on 14-15 June 2005 in Miri, Malaysia. The said Meeting will ﬁrm-up mechanisms that would sustain existing and new air and sea linkages within BIMP-EAGA, through extensive promotion and marketing, creation of tour packages, policy and infrastructure support measures, among others.

The SOs also adopted the BIMP-EAGA Nautical Highway as a priority project, which is hoped to expand the RORO system in the EAGA section.

Development Assistance Package from Donor Agencies. The ADB, AusAID and GTZ have continued to provide Technical Assistance (TA) programs for BIMP-EAGA. These programs include strengthening coordination among institutions and organizations (i.e., BIMP-FC, BIMP-EAGA Business Council and National Secretariats) in order to facilitate project implementation and monitoring, development of EAGA database system, improvement of SME Networking, strengthening of border security, among others.

Mindanao Updates 18 NGOING INITIATIVES IN SUPPORT OF THE NGOING INITIATIVES IN SUPPORT OF THE REVITALIZATION OF BIMP-EAGA O REVITALIZATION OF BIMP-EAGA Operationalization of BIMP-FC The member-countries afﬁrmed their commitment of support to the operationalization of BIMP-FC, which would include ﬁnancial and staff support.

Envisioned to be the BIMP-EAGA central secretariat, the BIMP-FC currently functions as a coordinating body between the BIMP-EAGA Senior Ofﬁcials, National Secretariats, Clusters, Working Groups and non-member countries/organizations.

The following BIMP-EAGA workshops were also conducted on 17-22 March 2005, Pan Paciﬁc Hotel, Kota Kinabalu, Malaysia, namely:

BIMP-EAGA Strategic Tourism Planning Workshop for Tourism Players 18-19 March 2005 GTZ BIMP-EAGA Project Planning Workshop, 20-23 March 2005. This This workshop was aimed at coming up with specific activity identified specific programs/measures that programs and activities that would improve the marketing would strengthen coordination mechanisms among and promotions strategies of BIMP-EAGA as the dream institutions and organizations within BIMP-EAGA in destination of Asia. which the assistance of GTZ shall be based.

Some of the highlights/major agreements of the The following are the work packages identiﬁed workshop are as follows: following the workshop sessions:

• Organizational development • Focus on CAN (Cultural, Adventure and Nature • BEBC Business Development Plan on Event Tourism) plus diving and golf in promoting the Management; “Visit EAGA – Your Dream DestinaASIAN” • Information Management (i.e. BEBC enhancement concept; for income generation); • Establish a more favorable image and perception • Finalization of the BIMP-EAGA Roadmap; of EAGA among visitors through balanced media • Strengthen capacity of BIMP-FC to facilitate coverage and dissemination of success stories; decision-making (i.e. use of database on trade, • Establish air services on priority EAGA routes for TOURISM, and investment, evaluation of project easy access to travel and destination connections proposal); by encouraging small airline companies to service • Strengthening of coordination functions (i.e. the said routes; and, review of FC’s TOR/organizational structure); • Strengthen partnership with tourism industry • Enhance cooperation between EAGA and ASEAN players in coming-up with tour packages, as well by addressing institutional issues concerning inter- as other marketing and promotions activities. country coordination; and, • Conduct studies (e.g. BIMP-EAGA within the framework of ASEAN’s FTA negiotiation).

Mindanao Updates 19 NGOING INITIATIVES IN SUPPORT OF THE O REVITALIZATION OF BIMP-EAGA House Committee on EAGA Affairs Public Hearing The House Special Committee on BIMP-EAGA Affairs held its public hearing on 27 January 2005 at the MEDCo Conference Room, Davao City. The hearing served as a venue for a brieﬁng and consultation among the P-EAGA/government implementing agencies as well as the business sector. It also served as a venue to initially deliberate the extension of the travel tax exemption to passengers originating from Mindanao and Palawan to any destination in BIMP-EAGA.

Other agreements of the Hearing are as follows: The Jose Abad Santos Glan Sarangani – • Committee unanimously moved to support HR 332 or Cooperation Triangle (JAGS-CT) was launched on the Extension of the Period of Travel Tax Exemption; 13 August 2003 in Glan, Sarangani Province. The Cooperation • Committee gave a motion that a portion of their Country- Triangle is composed of the Municipalities of Jose Abad Santos wide Development Fund (CDF) be allocated for BIMP- and Sarangani of Davao del Sur and the Municipality of Glan EAGA; and, under the Province of Sarangani. It aims to improve the socio- • Committee to follow-up with DOTC on the status of economic condition of the member-municipalities through the funding request for the renovation of old Davao cooperation and strengthening of trading linkages within and International Airport for the establishment of the BIMP- outside the area. Among the identified priority projects of EAGA Trade and Convention Center. the cooperation triangle include port development, internet connection and website development, tourism development, 13th MEDCo/11th BIMP-EAGA telecommunication development, acquisition of field level facilities and capability building, and road development. Anniversary Celebration Last 17-24 January 2005, the three (3) JAGS-CT Leaders Carrying the theme “Enhancing Strategic Partnerships for led the JAGS-CT Trade Mission to Indonesia. The delegation a Stronger Mindanao,” this year’s celebration underscored successfully forged ties with the local governments of North MEDCo’s role in enhancing inter-agency coordination Sulawesi and the Province of Gorontalo. The private sector and strengthening public-private sector partnerships in representatives who joined the trade mission also received the continuing efforts of effecting the socio-economic various business proposals from their counterparts. development and lasting peace in Mindanao. The activity highlighted the accomplishment and milestones of MEDCo Some of the major agreements reached during the Trade and BIMP-EAGA and drummed up support for BIMP-EAGA Mission are as follows: and Mindanao initiatives towards the attainment of peace • JAGS-CT to supply agricultural products such as corn, bangus and development. fry, coffee and extra virgin coconut oil to North Sulawesi; • Establishment of Technical Schools by our local Endonela To commemorate milestone achievements and gains of Foundation in Gorontalo, Manado and Talaud; MEDCo and BIMP-EAGA, activities such as the conduct • Establishment of shipping linkages between JAGS-CT and of a motorcade, Mindanao/BIMP-EAGA Exhibit and Talaud; and, Product Display, Mindanao/BIMP-EAGA Briefings, and • Negotiations for joint venture activities on deep sea fishing the Philippine-EAGA (P-EAGA) Business Forum were which would allow Filipinos to fish in Indonesian waters. organized. Mindanao Updates 20 NGOING INITIATIVES IN SUPPORT OF THE PPORTUNITIES FOR MINDANAO REVITALIZATION OF BIMP-EAGA O Mindanao Natin

Program is the government’s commitment to Tusher the rehabilitation of Muslim Mindanao with special attention to conﬂict-affected and potential conﬂict areas, and provide a venue for the concerned agencies to coordinate, consolidate and assess the overall peace and development initiatives in the target areas.

The Mindanao Natin Program, a component under Legacy Agenda #9 to support the task on Peace Building and Conﬂict Prevention, has the following reformulated components: Mindanao Natin which was launched by PGMA on 24 April 2003 was implemented through the original REFORMULATED MINDANAO NATIN 10-point development program, as follows:

a. Implementation of the RA 9054 in pursuit 1. Substantial implementation of the 1996 GRP- of GRP-MNLF Final Peace Agreement MNLF Peace Agreement b. Rehabilitation of Conﬂict-Affected Areas in 2. Comprehensive rehabilitation program on the Mindanao clusters of Pikit-Pagalungan-Pagagawan and c. Health Development Carmen-Pres. Roxas-Damulog; and, the Triple d. Education Development SB (Siocon, Siraway, Sibuco, Baliguian) e. Livelihood Support and SME Development 3. Fielding of “SALAM” Soldiers to assist DSWD f. Land Tenure Improvement and NAPC on KALAHI, KALAHI-CIDSS, MBN g. Agri-Aqua Development and psycho-social and medico civic services h. Implementation of the Regional Economic 4. Livelihood support through micro and SME Zone Authority credit i. Infrastructure development for inter- 5. Implementation of the rebel returnees program connectivity focused on values formation j. Culture-based healing, reconciliation, and 6. Establishment of one-stop action centers for integration programs land documentation and titling programs 7. Education-Distance learning program through The Ofﬁce of the Presidential Adviser on the Peace Process mobile techno-vans, demand driven skills (OPAPP), in close coordination with MEDCo, continues to training and scholarship program serve as the oversight agency and provide overall policy 8. Youth and culture-sensitive programs on sports, guidance and strategic directions for the implementation arts and entertainment of Mindanao Natin Program. An Inter-Agency Meeting is 9. Implement community-scale quick gestation scheduled in June 2005 to follow-up on the status of project infrastructure projects implementation among the concerned implementing Prioritization and fast tracking of ongoing ODA agencies. funded projects

Mindanao Updates 21 O PPORTUNITIES FOR MINDANAO

he Mindanao Investment Program (MIP) FY 2004-2006 M i n d a n a o Tis a compendium of priority projects and programs for Mindanao in pursuit of the twin goals of peace and I n v e s t m e n t development. Extensive consultations with the LGUs, national line agencies, private sector and other stakeholders were Program conducted in the six regions of the island in order to come up with the MIP. The undertaking was made possible thru the concerted efforts of the MEDCo Secretariat, the Regional Development Councils (RDCs) and NEDA regional ofﬁces in Mindanao, the Regional Planning and Development Ofﬁce, and the Regional Economic and Development Planning Board of the ARMM. Funding support was provided by the World Bank.

The MIP was launched in October 2004 during the 3rd Mindanao Working Group (MWG) Meeting at the Waterfront Insular Hotel, Davao City.

As of March 2005, donor agencies have shown positive indications to fund the following projects:

• Coastal Resource Management of Davao Gulf - SIDA (grant) • Detailed Engineering and Design of the Solid Waste Management Project in Panabo City, Davao del Norte, and Mati, Davao Oriental - SIDA (grant) • Poverty Mapping Project - ADB (grant) • Rights-Based Approach to Development - SIDA (grant) • Strengthening Institutional Mechanisms for BIMP-EAGA - GTZ (grant) • BIMP-EAGA Institutional Assistance Projects and security-related projects - AusAID

n total, there are 147 programs Other updates on donor interest to the MIP are as follows: Iand projects being implemented in various parts of Mindanao, • ARMM proposals requested by JBIC 17 committed programs and • Discussions with British Embassy technical staff projects, and 85 programs and • Discussions with the Canadian Ambassador on projects promoting the projects in the pipeline. New welfare of indigenous peoples proposals in the MIP totaled 227, • Discussions with JICA technical advisor on projects related to wherein 121 are supportive of information and communications technology (ICT), environmental the 10-Point Legacy Agenda protection, health, peace and security, and agriculture of the Arroyo administration. Currently, the ODA database • Discussions on projects focusing on ICT, agriculture, and tourism with can be accessible online from the the Saudi Arabian Ambassador during the KSA mission Mindanao section of MEDCo’s • Endorsed by the 13th MinBizCon as part of the Mindanao Action website (www.medco.gov.ph). Agenda

Mindanao Updates 22 PPORTUNITIES FOR MINDANAO ONTINUING ADVOCACY EFFORTS

Economic Sector C

SME Development

The 3rd SME Development Cluster Meeting was hosted by Brunei Darussalam and chaired by the Philippines on 1-2 March 2005. The said meeting was attended by representatives from the public and private organizations involved in chicken production, seaweed growing and oil palm cultivation.

The following are the results/agreements reached during the said meeting:

• Conduct a BIMP-EAGA Palm Oil Conference and BIMP-EAGA Seaweeds Conference to be hosted by Malaysia and Philippines, respectively; • Organize a Palm Oil Council under the BEBC; • Signed a MOU to set-up a Joint Venture Corporation for the Halal Poultry Project to be registered in Brunei Darussalam under the name “BIMP Corporation;” • Identiﬁed the National Secretariats of Brunei Darussalam and Indonesia as the focal agencies for CIQS concerns; and, • BIM countries to consolidate CIQS rules, regulations and procedures and submit to MEDCo on 2 August 2005 to come-up with a BIMP-EAGA CIQS Primer.

Development of Mindanao’s Halal Industry

The National Meat Inspection Service (NMIS) under the Department of Agriculture conducted a series of consultative conferences on some important developments in the government’s efforts for promoting the Halal food industry with various Islamic religious scholars, businessmen, and government officials in various HALAL regions in Mindanao during the first quarter of 2005. The DA-Halal Food Industry Development Program, particularly the Conceptual Industry Framework of an Agri-based Halal Industry Development Program, the Proposed Halal Industry Roadmap of the Philippines, and the Immediate Programs and activities of the HFIDC were presented during the consultations. Moreover, each region was able to identify a credible religious organization that will spearhead the Halal accreditation and certification process in their area.

The HFIDC has also coordinated with the Malaysian Embassy for the conduct of a Seminar and Exhibition of Malaysian Halal Food Products on 25-27 May 2005 at the Dusit Hotel Nikko and Malaysian Embassy in Makati City. The said seminar and exhibition shall explore the potentials of the Halal Food Industry in the Philippines and opportunities to export Malaysian Halal food products to the country. The seminar will be graced by Honorable Datuk Seri Haji Mohd Ali Rustam, President of the Malay and Islamic World and His Excellency Datuk Iskandar Sarudin, Ambassador of Malaysia to the Philippines.

Mindanao Updates 23 ONTINUING ADVOCACY EFFORTS

C Macro Sector Social Sector

Mindanao Studies Project

MEDCo Council

The MEDCo Council convened for their The Mindanao Studies Consortium Foundation, Inc. (MSCFI), is a 8th Meeting on 22 April 2005 which Mindanao-wide organization composed of eleven (11) member-institutions highlighted the formal installation of the coming from the academe, NGO, and government. MEDCo members by Executive Secretary Eduardo R. Ermita. The meeting also University of the Philippines in Mindanao (UP-Min); Ateneo de Davao University (AdDU); Mindanao State University-General Santos City (MSU-GSC); Notre served as a venue for the discussion of Dame University (NDU); Western Mindanao University (WMSU); Mindanao critical issues relating to Mindanao which Economic Development Council (MEDCo); Alternate Forum for Research in require the Council’s action. Mindanao; Mindanao State University-Marawi City (MSU-Marawi); Mindanao State University-Iligan Institute of Technology (MSU-IIT);Dansalan College The meeting presented the Council’s Foundation, Inc. (DCFI); and University of Southern Philippines (USEP). mandate and current initiatives for Mindanao to primarily orient the The long term vision of the MSCFI is to become a clearing house of ideas, MEDCo members on the Council’s resources, programs and projects related to the identiﬁcation of possible role and update them on MEDCo’s solutions to issues and problems in Mindanao through research and policy development interventions for the island. studies. A presentation by the OPAPP on the peace process updates supplemented Several ground works are required in preparation for this long-term vision. the information presented during the As a prelude, the group agreed to conduct the Mindanao Studies Project, meeting. which consists of three phases, as follows: Among the agreements during the a. State-of-the-Art of the Mindanao Studies Research (Phase I) - a meeting were as follows: collection of information on the various studies/researches and/or scholarly works done on Mindanao in order to gain a perspective of the work that 1. Creation of the MEDCo-ExeCom has already been done on Mindanao and map out the work that still needs comprising the following: to be accomplished. Status: The project was completed last 19 October a. MEDCo Chairman 2004 b. MEDCo Vice-Chairman b. Publication (Phase II) – This stage involves content and copy editing c. MEDCo Secretary of the output of the ﬁrst phase and the production of hard bound and d. RDC/REDPB Chairs (with their respective Co-Chairs/Vice- interactive CD-ROM copies of the research project. Status: The project Chair as alternates) already commenced last 4 Feb. 2005 and is expected to be completed by e. Representative of the House of October 2005. Representatives c. Conferences (Phase III) –The results of the research project shall be f. Private Sector Representative presented in a national/international conference which will bring together scholars, peace advocates, policy makers and development workers to 2. Adoption of the Council’s vision, exchange views and perspective on the project. mission, goal and objectives

Mindanao Updates 24 ONTINUING ADVOCACY EFFORTS C ONTINUING ADVOCACY EFFORTS Macro Sector

MEDCo Council

3. Source funds for the unfunded projects and assist in fast tracking the projects within the bureaucracy

4. Support the inclusion of the Gen. Santos City Port (Makar Wharf) and Polloc Port in the SRNH and of Balabagan, Lanao del Sur in the Roll-on Roll-off Terminal System (RRTS)

5. Study possibilities of increasing Mindanao’s budget share through the following:

a. Explore ways to urge the national government agencies to provide the regional breakdown for their programs, projects, and activities;

b. Explore the possibility for Congress to ensure that regional breakdown of programs, projects and activities of the agencies are presented in detail in the succeeding GAAs, instead of lumpsum statements;

c. Consider the devolution of the procurement process;

d. Consider the possibility of having another round of Mindanao Budget Summit (MBS); and

e. Conduct consultations on federalism, especially on its impact on Mindanao’s budget share in the event of a change in the form of government.

6. Explore possibilities of maximizing access to ODA sources by:

a. Speeding up application of projects in the pipeline for ODA funds;

b. Allowing LGUs to directly negotiate with ODA funds to ﬁnance revenue generating projects using sovereign guarantees or government bank guarantees as secondary guarantees whereby the project revenues will serve as the primary guarantee; and

c. Advocating for the ODA to provide equal opportunities not just for CAAMs but for all poverty-stricken regions.

7. Support the extension of travel tax exemption on passengers originating from Mindanao seaports and airports to BIMP-EAGA focus areas

Mindanao Updates 25 ADVOCACY CHANNELS Media Advocacy

Other media advocacy channels for Mindanao that continue to cater information and updates on development initiatives in the island include the following: The Mindanao Business Talk (MinBizTalk), a TV program cum media forum held every 1st and 3rd Thursdays of the month.

MinBizTalk has already featured ﬁfteen (15) topics this year, to wit:

the 10th Anniversary of the BIMP-EAGA and the Involvement of the Private Sector in the Sub-regional Economic Cooperation; Performance of the Tourism Sector in Davao City and the Davao Region; Preparations for the National Elections and their Impact on Southern Mindanao; State of Private and Public Education in the Region; Transparency and Accountable Governance; Lunay S’bung Expo in South Cotabato; 13th Mindanao Business Conference; 3rd Mindanao ICT Congress; 3rd ARMM Business Congress; Transparent and Accountable Governance Forum; 3rd Aquaculture Exposition; 75th Anniversary Celebration of Misamis Occidental; 1st SOCCSKSARGEN ICT Week; Ceremonial Signing of Memorandum of Cooperation between JAGS-CT and Bureau of Immigration; and 10th Caraga Business Conference.

Consistent with efforts to mobilize the said program to the different regions in Mindanao, all episodes during the second semester were shot on-location, particularly in areas where the events were held. Noteworthy is the MinBiztalk roadshow for the 13th MINBIZCON which covered on-site taping in Regions 10, 12 and 13.

Hataw sa Mindanaw, a 30-minute live news and talk programme aired over DXRP and held every Thursday. Hataw Mindanaw has already featured more than 40 topics for the year, including the Mindanao Exports Performance for the 1st Quarter of 2004; 2nd BIMP-EAGA Philippine Ugnayan Exhibition and Conference 2004; inaugural ﬂight of Mindanao the Puerto Princesa-Kota Kinabalu air route of Layang- (formerly Layang Aeropace; updates on the Mindanao National

Initiative (Mindanao Natin); visits of the MS Area Teams Mindanao Scope) to their respective areas of responsibility; Computer Literacy and Internet Connection (CLIC) program of About to mark its second year of broadcasting live the Growth with Equity in Mindanao (GEM); updates Mindanao-wide discussions every Monday morning, on the President’s Bridge Program Mindanao; First Ugnayan Mindanao features key resource ofﬁcials from Semester Economic Performance; MTE Expo 2004 and the government and other personalities who expound on BIMP-EAGA International Trade Fair; 13th MINBIZCON; various development program and initiatives in Mindanao. Community Business Development Center’s Job Hunt The program, which also serves as a forum with government 2004; 6th National Tuna Congress; Small and Medium agencies on regional concerns of Mindanaoans, is regularly Enterprises Development Week; e-SOCCSKSARGEN aired over nine (9) Mindanao PBS radio stations, seven ICT week; 3rd Mindanao Working Group Meeting; and RPN 9 and one (1) Radyo Ukay radio station. Governance Expo 2004. Mindanao Updates 26 DVOCACY CHANNELS DVOCACY CHANNELS

Media Advocacy A

National, Mindanao and local dailies have consistently catered high-quality MEDCo press releases on Mindanao and BIMP-EAGA developments in their business/economy page. This year, a total of 731 MEDCo-generated and assisted news and photo releases were published, with an estimated 7,310 pick-ups in leading national and local newspapers that include Manila Bullettin, Businessworld, Today, Mindanews, GoldStar Daily, Sun.Star, Mindanao Times and Mindanao Daily Mirror.

MEDCo has undertaken other information dissemination activities by tapping private media outlets and ﬁelding guests in their available programs as well as arranging coverage of news worthy events in the course of Area Team visits. Noteworthy are the guestings with Bombo Radyo for the 1st BIMP-EAGA Security Conference; the President’s Bridge Program; coverage of the M/V Rimbah Tujuh’s maiden voyage from Bitung Indonesia to General Santos City which was broadcasted over Good Morning Philippines; as well as the appearances of key government and private sector players in Mindanao in ABS-CBN News Channel and Breakfast TV programs for the MTE Expo 2004 and BIMP-EAGA International Trade Fair; 1st Davao Gulf Environment Summit; 6th National Tuna Congress; and 13th MINBIZCON.

Produced information materials and publications Launched Kalinaw sa Mindanaw, that support information and media advocacy a 24-hour monitoring and action center efforts for Mindanao such as the Mindanao for election-related incidents during Review, a news round-up of Mindanao the recently-held May 10 synchronized developments and vital economic indicators; national and local elections. In 3rd Info Quiz Show Mindanao Investment Programme, a compilation partnership with the PIA and the MS conducted the 3rd Mindanao of all priority programs and projects in Mindanao Mindanao Communicators’ Network, Information Quiz Show on 19 in the medium term; and MINDACOMNET’s Kalinaw sa Mindanaw was launched at December 2004 at NCCC Mall Mindanao Scope Magazine. Copies of these the MEDCo Office. During the launch, PA Atrium, Davao City. It was materials are distributed to various clients as part participated in by 12 selected high Dureza and resource persons from the school students from all regions in of Mindanao information kit. Commission on Elections, the PNP, and Mindanao. the AFP provided answers to frequently Facilitated the conduct of the 6th Mindanao asked questions about the conduct This year’s annual quiz Communicators Network Congress competition intensified information of the said elections. The Kalinaw dissemination efforts on Mindanao’s and Workshop on 25-28 November 2004 at the Mindanaw established two (2) hotline peace process, by highlighting Waterfront Insular Hotel, Davao City. The congress numbers to facilitate the exchange basic questions on the island- has successfully drawn out communication plans of queries, replies, complaints, and region’s peace and development on on-going interventions supportive of the Arroyo incident reports for the duration of the headways in addition to general administration’s affirmative actions for Mindanao information and current events monitoring. An information network about Mindanao and BIMP-EAGA espoused in her “Beat the ODDs” agenda. was likewise established between the economic cooperation. Kalinaw Mindanao nerve center and A total of 217 government and non-government the respective offices of the COMELEC, Rex Baluyos, a fourth-year high information officers and communicators from all PNP, AFP, PIA, and DILG in order school student of Ozamiz City across the six regions of Mindanao attended the National High School in Region X, to address election-related incidents three-day conference. The said congress served as emerged as the overall champion of reported to the monitoring and action a Mindanao-wide communications planning forum, the quiz show, followed by Anthony center. Sacabin of Lanao del Norte and which identified communication gaps, objectives Jessa Marie Ann Quijada of Surigao as well as strategies in communicating the 10-point del Sur as second and third prize agenda. winners, respectively. Mindanao Updates 27 ONTINUING SUPPORT FOR MINDANAO’S c PEACE AND DEVELOPMENT

Micro-Enterprise Access to Banking Services (MABS) Program (USAID) GOP-UN Multi-Donor This is an initiative designed by USAID to encourage Programme – Phase 3 the Philippine rural banking industry to significantly expand microenterprise access to banking services. The GOP-UN / Multi-Donor Programme is a joint undertaking A capability-building program, it provides training of the Philippine Government, the United Nations (UN), and the and technical assistance to rural banks to develop governments of Australia, New Zealand, the Netherlands, and their capability to profitably provide financial services Spain. The Programme started its implementation in March 1997- (loans and deposit services) to the microenterprise December 1997 for Phase 1 (Emergency Assistance & Needs sector. Assessment Survey) and January 1998-June 2000 for Phase 2 (Expanded Phase for Emergency and Livelihood Assistance). MABS started in Mindanao in 1998 and is expected to end in 2007. The valuable lessons that have been generated from these two (2) previous phases set the direction for the third phase which started in June 2001 and technically closed in June 2004. The programme aimed to strengthen the foundations for lasting peace and development in Mindanao through capacity development and confidence building at all levels of government and has played a significant role in providing assistance for the improvement of the living conditions and capacities of the MNLF combatants and their families, with the end goal of building peace in Mindanao as a whole. Industrial Development Programme for Income and Employment Generation Currently, a 5-year successor programme called Action for in Mindanao (IDP) (UNIDO) Conflict Transformation (ACT) for Peace, is awaiting final approval from NEDA. The Programme shall seek to achieve The IDP, originally scheduled to close on December the following purpose of “strengthening peacebuilding efforts 2004, was extended until end of June 2005. The and sustain the gains for peace and development in Southern program is now in its closing activities which Philippines.” The Programme shall be implemented under the include the production of an Abaca Manual, final UN joint programming approach with MEDCo as the proposed documentation, and one on one interviews with the overall lead implementing agency, in partnership with the ARMM consortium members. Regional Government.

. Mindanao Updates 28 ONTINUING SUPPORT FOR MINDANAO’S c PEACE AND DEVELOPMENT

GOP-UNDP Programme on Rehabilitating Internally Displaced Persons (IDPs) and Communities in Southern Philippines

The Programme, with funding support amounting to 3M Euros from the European Commission (EC) through the UNDP-EC Trust Fund, aims to address the rehabilitation and resettlement of at least 10,000 displaced families in Southern Philippines. The project is intended to complement efforts of the MDP3 and ongoing government programmes to ensure the provision of a comprehensive rehabilitation package for the IDPs.

Among the Programme’s accomplishments as of March 2005 include the following:

(1) Provided 18,720 displaced families with food and non-food packages; (2) Provided medical and dental services to 1,265 individuals; (3) Capacitated 239 participants in disaster preparedness and management and contingency planning leading to the formulation of nine (9) disaster management plans; (4) Provided 241 core shelter units in Cotabato, Zamboanga del Norte, Maguindanao, Sulu and Basilan, 52 units of these have been completed; (5) Partnered with the Catholic Relief Services on distilling learning experiences from the experiences in peace zones.

The programme is expected to end in July 2005.

Mindanao Updates 29 For more information, please contact:

The Mindanao Economic Development Council (MEDCo) Secretariat 4th Floor, SSS Building, Bajada, Davao City, 8000 Philippines Trunkline: (63 82) 221-1345 Telefax: (63 82) 221-8108, 221-8109 221-6929, 221-7060 Email: [email protected]

Manila Ofﬁce: Room 1-A, New Executive Bldg. Malacañang, Manila Tel. Nos. (63 02) 735-6092, 735-6057 Telefax: (63 02) 735-6090

Visit us on the World Wide Web at: http://www.medco.gov.ph