idc-siad forum presn - habito

7/31/2019 IDC-SIAD Forum Presn - Habito

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AttractingInvestments in

Mindanao: TheIDC Edge

Cielito F. HabitoMindanao Economic Adviser


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Whos Afraid of Mindanao?

Unstable peace and order Poor/inadequate infrastructureUncertain land access and security

Tight electric power situationGovernance & institutional issues(graft & corruption, weak capacity)

Inadequate budgetary support for critical needsHighly unskilled labor force


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Why Mindanao?The Mindanao Edge

Superior agro-climatic conditions Abundant primary resourcesLower wage rates (both official and defacto)Lower power cost (but supply reliabilitya problem)Vast opportunities for growth anddiversification: BIMP-EAGA connectionGrowing faster than rest of country


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Why Muslim Mindanao?Not Just Charity

Second poorest region in countryNeed to break the vicious cycle of

Low Investment Poverty &ConflictHas large areas of fertile but unused

landWage rates among lowest in countryRisks/dangers tend to be

exaggerated


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Crops of Choice

Coconut needs massive revival(fertilization, replanting); higher-valueproducts other than copra/oil

Oil Palm great potential, much scopefor new investments; steady cash flowfor farmers

Rubber attractive to smallholders,easy to grow, steady cash flow (ATMmachine); need more processors


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Crops of Choice

Coffee, Cacao much scope for import substitution; Nestle buys bulk of production; good intercrop

Cassava San Miguel Corp. reportedlyprepared buy all production; existingprocessing capacity

Banana time-tested $ earner Seaweeds large market, but credit

now a constraint


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Business Models:How to Do It? Corporate farm (La Frutera Model) hinges on enlightened leader Contract farming (Agumil)

monopsony (?); polevaulting risk Central management approaches(Develop-Manage-Transfer) e.g.Malaysias FELDA (public lands) andFELCRA (private lands)

Cluster farming (NGO/PO-facilitated)(Kasanyangan Foundation, NorminVeggies)


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Braving It and Making It: Insights from Successful Investorsin Muslim Mindanao

Highlights

Documenting

Successful Investmentsin ARMM


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Firms Who Braved It andMade It

La Frutera Inc. CavendishBananas

Agumil Philippines Inc. Palm Oil BJ Coconut Oil Mill - Coconut Oil Matling Industrial & CommercialCorp. Cassava Processing, etc.EA Trilink Corporation ICT andTelecoms

Air21 Marawi City Logistics


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General Insights/Lessons Value of partnership with influentiallocal leader : Land access & security,HR managementTrust & confidence building are key

Work within cultural norms of workforce and communityCreativity & resourcefulness Thinkout of the box

Government support is importantInvest in own power supply , especiallyin short to medium term


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Imperatives

Omnibus Investment Code for ARMMFinancing facilities for agribusinesstree crops to match gestation periods

Need for investment insurancefacilitiesBeyond promotion: Investment

facilitationWanted: Enlightened LGU governanceLGU clustering to permit scaleeconomies


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Why IDC?Clusters of the Willing

LGU Clusters demonstrate clear commitment to developmentPooling of resources & efforts bringsgreater efficiencyCan collectively offer scaleeconomies not possible withindividual LGUsIDC has invested in a knowledgebase that helps facilitate business

Other peculiar advantages


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Other LGU Clusters

SLAM (Southern Liguasan Allianceof Municipalities)Datu Paglas

PaglatSultan sa BarongisSalipada K. Pendatun

Wao & Bumbaran Lanao del Sur PALMA North CotabatoMore


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The IDC way is theway of the future

toward a progressiveand self-reliant

Mindanao.

Thank You!

idc-siad forum presn - habito

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