The 2008 PBD Yearbook I 

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

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

14 Luzon Urban Beltway:

Keeping the country’s main arteries healthy

24 Central Philippines:
A tourist haven

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

50 The bright lights of the “ Cyber Corridor”

54 The Rice Crisis:

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

64 From malls to resort town

54 The Rice From malls

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

68 Pagcor’s $20B Las Vegas dream

70 A tale of three cities

Boom town

The greening of Makati

Quezon City’s Triangle Park

72 Business inflation forecasts

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

74 Making sense of the triple

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

Some photos taken by Revoli Cortez

The 2008 Philippine Business and Development Yearbook is published by

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

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


‘Supersizing’ the regions
OF ALL OF ASIA’S CHILDREN, the
Philippines through the years has remained
some sort of a sleepy, laid-back child that
visitors look at with mild interest, but pass
over so they can exclaim with oohs and ahhs
over neighbors China, Japan, Hong Kong,
Singapore, and now even Vietnam. Don’t be
misled. It’s not that the Philippines is the ugly
one in the brood. But the puzzle is that while it
doesn’t get many negative reviews, it doesn’t
get rave ones either. It is more or less ignored.
Anybody intimate with Asia knows that
the country’s English-speaking and skilled
labor force is sought after worldwide as
senior managers and workers, that royalty
and Hollywood personas beat the paths to its
pristine beaches, and that its mineral deposits
pull in the biggest miners in the world.
That’s just to name a few of its attractions.
Another is that the government has an avowed
policy to bring an economy of more than 7,000
islands and a people of deeply diverse cultural
backgrounds to the next level of economic
DBP Yearbook Inside Rev3 (Final)3 3
By Ma. Salve Duplito
advancement that’s sizzling enough for both
international and domestic investors. After
all, in this day and age, a respectable growth
rate and “nice” smiling people will not cut it.
The game has gone up many, many notches
and there are compelling choices everywhere
especially in Asia. Making a physically
fragmented nation move in step—together—is
no easy feat.
On July 24, 2006 during the third regular
session of the 13th Congress, President Gloria
Macapagal-Arroyo showed the world what her
background in economics has taught her about
how to push economies ahead: competitive
advantage.
“Our three-part plan is moving. First, to
recover from our decades of debt and lack of
funds, to equitably share income to the people
and to invest in health, education and jobs that
they need,” the President told the nation in her
State of the Nation Address.
Then she reached for what was obviously
President Arroyo’s State of the Nation Address
hoped for as a defining moment. “And finally,
Phase Three: to invest in the natural advantages
and natural resources of each section of our
nation so that, when harnessed together, the
major economic regions of the nation are larger
than the sum of its parts.”
Native strengths
Arroyo gave those who were listening a tour
of five new “super regions” built around each
area’s native strengths. As if showing off
her intimate knowledge of the country she
governed, she described a long list of hidden
nooks and crannies in these super regions and
commended local executives overseeing these
dots on the Philippine map—even those where
the political opposition ruled.
“We will bring Masbate and Biliran into the
RORO (roll-on, roll-off) Eastern Nautical
Highway from Surigao through Leyte through
Naval and Maripipi in Biliran through
Esperanza, Aroroy and Burias Island in
Masbate and on to Bicol. The much-awaited
The 2008 PBD Yearbook I 
12/22/08 5:23:44 PM
 10-megawatt generator set arrived in Masbate
last Saturday. It is ready to power up the
province before the end of the month,” was
just one of her commitments during her 2006
SONA.
Her vision and messages were simple and
however, will need a macroeconomic mindset
to make sure that the master plan will not
create random pockets of infrastructure marvel.
“These projects are planned and implemented
to support and complement each other such
as roads that will bring commuters from

Willy Arcilla, president of Business Mentors Inc.

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

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

 chess pieces on an economic board, bring
in the elusive development so crucial for
the Philippines to be among Asia’s exciting
investment destinations? Will growth be
equitably distributed? The desired outcome
cannot be easily faked: growth in investments,
a vibrant economy singing just the right tunes,
higher purchasing power among Filipinos,
and that coveted membership in “Asia’s Tiger
Economy” club.
AgriNurture (ANI) president Antonio Tiu, who
operates a P4-billion nationwide agribusiness
company, says the economics of the plan is
fairly straightforward: a focused and strategic
approach makes good sense whether in
business or governance. Economies of scale
will allow the government to take advantage
of each super region’s competitive advantage.
Commitment, funding and coordination are
crucial, and a plan that can deliver all of these
should work.
Tiu’s biggest problem is speed. The
government is not moving as quickly as it
should, he says.
“As with all plans Filipinos make, the idea of
the super regions when I first heard it makes
sense. But the implementation is always the
problem. We are moving too slowly,” he says.
As a businessman who has taken on himself to
feed a whole nation with nutritious vegetables,
and who wants to be a regional player in the
Asian region, Tiu has decided not to wait for
the government. ANI has constructed its own
facilities that can process tons of vegetables
and fruits per day. He beats on the doors of
government agencies like the Department of
Agriculture to propose projects. His latest: a
P10-budget viand or ulam for Manila workers.
He networks and brainstorms with government
officials on how to distribute vegetables from
the North more efficiently to Luzon. However,
while he and the private sector can do their
part, Tiu says the long wait for more effective
coordination between local government
officials take its toll on investors’ ardor.
A pity, because the Philippines itself as a
product is an exciting item to sell, says Willy
Arcilla, a marketing expert and president of
Business Mentors Inc. Arcilla says if he were
to market the Philippines, he would have an
easy time with all its attractions.
“We have fertile lands, the best tuna grounds
in General Santos, sardines in Zamboanga,
good lumber in our forests, golden mining
DBP Yearbook Inside Rev3 (Final)5 5
As of May 2008, the
government’s achievement
report reads like a shopping
list of huge infrastructure
projects: 20 projects
announced during the 2006
and 2007 State of the Nation
Addresses completed, and
these include 12 roll-on, roll-
off ports, two airports, two
roads, a bridge, two power
projects, and a cold chain.
Eighty-two more are being
constructed, 30 of which
should be completed by
the end of this year, while
47 projects are still in the
pipeline.
opportunities and the best tourist spots in workers, income equality and even hotel rooms
Asia. It will be such a pleasure to market the and toilets for the tourism sector.
Philippines,” says Arcilla, who has organized
numerous trade missions. “We need to solve these things and then
business will come in. They cannot afford not
“The basics all have to be there first. We to. The Philippines offers great opportunities
already have a sizable market because we for investors,” says Arcilla.
are the 12th biggest populous country in the
world but our purchasing capacity is still low Businessmen love to tell the story of the slipper
because of high poverty. We offer an excellent salesman who went to a certain town and found
gateway to the ASEAN region which will soon that more than half of the people he met were
be economically integrated, but we have a host barefoot. While most would think that he better
of other problems that we need to take care of skip town to sell slippers somewhere else, this
first,” Arcilla says. salesman was beside himself thinking: “Think
of all the slippers I can sell in this place.”
Arcilla is talking about a menu of conditions
that investors require before they bring in their The fact that the Philippines may not get much
money: low-cost production base, cheap food, rave reviews now, in this respect, can make
low tax rate (instead of mere fiscal incentives), it a ripe investment destination for investors
speed and ease of setting up businesses, good who see a slipper-less foot as a ripe business
education facilities for training of more skilled opportunity.
The 2008 PBD Yearbook I 
12/22/08 5:23:47 PM
 North Luzon
Agribusiness
Quadrangle
Feeding
the nation
is big
business
EVERY OTHER WEEK, 33-year old mother
and career woman Jenny Angoluan asks her
husband to drive her and some of her mommy
friends to well-known vegetable “bagsakan”
Balintawak market in Quezon City where they
buy fresh vegetables at a fourth of prices on
supermarket shelves.
Never mind that she ends her marketing around
11 p.m. and has to wear boots, especially on
rainy days to protect herself from Balintawak’s
muddy enclaves. She makes the extra effort
to feed her family of five with fresh produce
straight from Benguet and other parts of North
Luzon.
For the longest time, North Luzon has been
the “pinakbet with rice” region of the country,
says journalist Tony Lopez: Benguet is already
the vegetable capital of the nation, Cagayan
Valley and Nueva Ecija are rice granaries, and
the west cost of Luzon and Batanes are rich in
aquamarine resources. Feeding a nation, or at
least Luzon, is big business. The only problem
is infrastructure.
Transporting goods from farms and processing
plants to Metro Manila is a costly headache to
agribusinesses. The results are tons of wastage
at the producer level and expensive goods at
the consumer level.
This should all change if the grand plan
encapsulated in the creation of the North Luzon
Agribusiness Quadrangle (NLAQ)—one of
President Gloria Macapagal-Arroyo’s super
regions—is rolled out in totality.
The entire NLAQ spans a total of 66,495
square kilometers of fertile land in 17
provinces and 15 cities within the Cordillera
The 2008 PBD Yearbook I 
DBP Yearbook Inside Rev3 (Final)6 6
Administrative Region (CAR), Regions 1, 2
and parts of Region 3, with temperate climate
suitable for different kinds of crops including
traditional high value tropical ones, potentials
for mineral development, historical, cultural
and ecotourism sites, river basins in the major
rice-producing areas in Ilocos, Cagayan
Valley and Nueva Ecija, as well as aquamarine
potentials in the Batanes islands and coastal
areas in the west.
There are 10.2 billion people living in this
super region as of the government’s official
2000 population survey and growing steadily
every year. However, only six provinces have
a poverty incidence level lower than the 33%
national average. The population needed
around 50,000 housing units in 2005.
Last June 19, 2007, the President launched the
NLAQ at the Isabela Hotel in Jones, Isabela, a
symbolic act to reach out to local government
officials and to urge them to use her “super
region” plan to spur development. Governors
and mayors from the Cagayan Valley, Ilocos
and Cordillera Regions were given time to
raise their concerns.
The idea is to bring the super region to a
production level that would supply cheap and
fresh food not just to Luzon’s burgeoning
population, but also export these to nearby
Southern China, Taiwan, Japan, Hong Kong
and Korea, which are just a few hours away by
plane. Travel time from Laoag to Hong Kong,
for instance, is an hour and 15 minutes; three
hours to Shanghai, China and about the same
time to Taiwan.
Investors in the agriculture sector should note
that the government would be giving priority
to projects in post-harvest facilities, especially
for Region II; flood control structures for
the Cagayan River; processing facilities for
corn, highland vegetable farming, silkworm
culture, demonstration farms for giant bamboo
and mushroom production, and livestock
development for sheep, carabao and poultry.
Looking for incentives and places to hatch
a modern agribusiness company? There are
pockets of industrial areas in NLAQ that can
anchor the modernization of this agriculture
basket, namely the existing and designated
special economic zones of Baguio City, Poro
Point in La Union, and two in Cagayan, which
are ready for occupancy but are not yet fully
used.
Marine and fishery areas also abound in
NLAQ. In 2003, the Ilocos Region was the
largest producer of milkfish in the country,
amounting to 8,000 metric tons or 67% of total
marine production. It also had the third largest
milkfish catch from aquaculture of 39,000
metric tons.
North Luzon also has potentials for
mariculture, particularly for oyster production.
Its production (oysters, mussels, and seaweeds)
in 2003 was 3,195 metric tons, representing 3%
of the total. Mariculture zones are located in
Badoc and Pagudpud (Ilocos Norte); Balaoan
and Sto. Tomas (La Union); and Dasol and
Anda (Pangasinan).
Because the super region also boasts of rustic
but charming places like Pagudpud’s beaches,
Vigan’s Heritage Village, Sagada’s mummies,
and, of course, Banawe’s rice terraces, tourism
is also a major attraction in the region. Lately,
droves of Taiwanese tourists have been
12/22/08 5:23:48 PM

flocking to Ilocos Norte’s Fort Ilocandia,
Pagudpud and Baguio for cultural immersion,
sightseeing, golf, beaches and casinos.
There’s golden potential also in hydroelectric
power generation and irrigation, because
NLAQ is the premiere watershed cradle of
the Philippines, constituting 31% of the total
drainage area of major river,basins.
At least four companies have already taken
advantage of NLAQ’s metallic and non-
metallic mineral resources such as gold,
copper, chromite, calcite, manganese, white
clay, sand and gravel. Well-known miner
DBP Yearbook Inside Rev3 (Final)7 7
Lepanto Consolidated is already mining gold;
Bacnotan Cement Corp. is into limestone;
while Philex Mines and Climax Arimco
Corp. are extracting copper. The government,
however, favor companies that are interested
in sustainable, large and small-scale mining,
and rehabilitation of abandoned mines in the
region.
To increase productivity in the region, the
government’s master plan also includes
promotion of investments in digital
infrastructure like telecommunications,
broadcast media and cable television to
help businessmen use information and
communication technology as a marketing
tool.
Infrastructure support
If life is a highway, NLAQ at present still
has to get a life. There are 10 existing inter-
regional roads that traverse NLAQ, but these
are grossly insufficient to connect the area to
each other to boost business and trade. There
lies the opportunity for companies that are into
construction of public highways.
When it comes to transportation by air, the
Laoag International Airport is the only one in
Region I with international and national flights
to Kaoshung, Hong Kong, Guangzhou and
Pudong/Shanghai. The San Fernando Airport in
La Union, the Vigan Airport in Ilocos Sur and
the Lingayen Airport in Pangasinan continue
to cater to just a small percentage of total air
travel to the region due to inadequate facilities
and low demand. Local flights in these airports
include mainly general aviation, military,
government and private flights.
For Region II, four public airports need to be
upgraded and improved. Additional airports
are also needed, particularly in Sta. Ana,
Cagayan to support the operations of the
Cagayan Special Economic Zone and Free
Port (CSEZFP) and in the island municipalities
to attain the envisioned tri-modal transport
system.
For Cordillera, the air navigational facilities
of Loakan Airport has been modernized, and
is expected to increase its functionality, and
support the fast-growing tourism, trade and
industries of the CAR region.
Included in the government’s wish list is the
modernization of the Baguio Airport to support
the manufacturing and tourism industries of
the region through fast, reliable and safe air
transport services, more frequent and direct
flights between Baguio Airport and Manila,
Laoag, Subic, Clark, Tuguegarao, Bagabag,
and rural airstrips and helipads to cater to
requirements of fast regional air travel to and
from Baguio (e.g. medical missions, tourism,
governance, etc).
Seaports, which require massive investments
and time, will have to be improved and
constructed within the region. The main ports
of San Fernando, La Union and Currimao,
Ilocos Norte continue to cater to local and
international vessels containing mostly cargo
commodities moving in and out of the region.
The 2008 PBD Yearbook I 
12/22/08 5:23:50 PM
 The Currimao Port was further developed
for better passenger and cargo handling
capability. The port has now a roll on-roll off
ramp servicing the Ilocos Norte-Batanes route.
Meanwhile, the operation and management of
the San Fernando Port has been privatized under
the Bases Conversion Development Authority.

For Region II, its open sea attribute and

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

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

Power projects

With all the expected economic activity in the

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

In Region I, the 345 MW San Roque Multi-

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

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 province of Apayao has the least barangay
coverage at 57.25%.
In Region II, 331 barangays, or 27% of the
population (about 15,000 families) are still
not energized. However, the government is
targeting 100% coverage by end of this year.
The Cordillera’s first hydroelectric power plant,
the 75-megawatt Ambuklao HEP, has been
non-operational since the 1990 earthquake
when it was heavily damaged. In 2002, the
CAR’s net power generation was 627.76
megawatts per hour, which is 2.8% of the
Luzon Grid. Having only a peak of about 107.5
megawatt, CAR is a net exporter of energy.
Cagayan Valley is a region of rich water
resource. Its four mainland provinces
comprise about 58% of the entire area of the
Cagayan River basin and are traversed by
four major rivers and its tributaries, lakes and
swamplands. The island province of Batanes
also has its own share of inland and seawater
resource. Given these endowments, the region
possesses tremendous potentials for the
development of about 240,000 hectares of land
for agriculture.
DBP Yearbook Inside Rev3 (Final)9 9
Despite the region’s abundant water resources,
regional irrigation coverage merely stands at
47.70% or 225,691 hectares out of the potential
irrigable area of 472,640 hectares. The national
government lacks funds for irrigation or has
a problem with delayed funding releases, and
need more local government involvement in
communal irrigation systems.
Under the master plan for NLAQ, the national
government, local government units and the
private sector are investing in 23 massive
infrastructure projects that will add seven new
airports, three ports, three roads, four irrigation
projects, a cold chain facility, three power and
two flood control projects.
“These investments shall increase agriculture
production, hasten the delivery of agriculture
produce from the farms to the markets, reduce
transport costs, cut travel time, and increase
farmers’ incomes while helping lower food
projects,” a government document on updates
on the super regions states.
As of May 31 this year, the government
has completed the Dingalan port in Aurora
and windmills in Batanes. The La Trinidad
Fruit and Vegetable Minimal Processing and
Packaging Plant in Benguet is expected to help
preserve the quality and increase the shelf life
of vegetables from Benguet.
The Banaoang irrigation plant is happily ahead
of schedule.
The following projects are on schedule: the
Baler-Casiguran Road, Casiguran Airport, the
Poro Point International Airport.
The following are still in the pipeline:
Alaminos Airport, Salomague Seaport, and
the 30-megawatt North Luzon Wind Power
Project.
The rest are delayed: Halsema Highway, the
Tabuk-Tuguegarao Road, the Bagabag Airport,
the Basco Airport, the Itbayat Airport, Port
Irene, the Bangui Bay Windfarm Project, and
the Agno River Flood Control Project.
Feeding a nation with affordable food is a
business that doesn’t run out of style, especially
with the expected global economic slowdown.
NLAQ appears to be a region well positioned
for the times. – Ma. Salve Duplito
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 The 2008 PBD Yearbook I 12

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

 Luzon
Urban Beltway
Keeping
the
country’s
main
arteries
healthy
DRIVING THE LENGTH of the Subic-Clark-
Tarlac Exchange (SCTEX) for the first time
makes motorists feel like they have been
transported to the great highways of North
America.
More than the fact that it is wide and smooth,
and that the sight of mountains blasted in
the middle to make way for the only decent
highway in North Luzon that is not used for
drying rice on a clear day is breathtaking, the
major treat provided by the SCTEX is this: it
is the only major road project that will connect
Luzon’s east and west coasts.
It used to be that all goods from the Pacific
side of Luzon still had to turn the bend at the
tips of Luzon to get to Manila. That’s because
before the SCTEX, all major roads in the area
went South to North and vice versa like the
North Luzon Expressway and the South Luzon
Expressway. Thus, SCTEX is the shaft of an
economic arrow, if you must, that should help
Luzon by bringing Clark and Subic together
and creating the biggest economic region in the
country, both in scale and economic might.
Construction projects like the SCTEX, roads,
ports, railways, transmission lines, gas pipelines,
wastewater treatment plants, food terminals
and airports reduce the cost of business, attract
investments, increase the value of land, and
hopefully lift every citizen’s boat as well. In
the Luzon Urban Beltway super region created
by the government in 2006 through Executive
Order 561, these mega infrastructure projects
are at the crux of making the area a “globally
The 2008 PBD Yearbook I 14
DBP Yearbook Inside Rev3 (Final)14 14
competitive industrial and service center with
high quality of life for its people.”
The Luzon Urban Beltway is composed of the
National Capital Region (NCR), provinces in
Region IV-A, and the provinces of Bulacan,
Bataan, Pampanga, Mindoro, Marinduque ad
the southern parts of Tarlac, Zambales, Aurora,
and Nueva Ecija.
Government’s vision for the super region is
not just to make the Luzon Urban Beltway
the center of the country’s industrial and
service sectors but also to turn the region into
something that will rival Hong Kong and
Singapore, and other wealthy Asian cities. As
of 2004, services account for 59% of Metro
Luzon’s gross regional domestic product, while
industry contributes 34% and agriculture,
forestry and fishery a minimal 7%.
Since the National Capital Region is already
the center of commerce, business, industry,
and media—home to the Makati and Ortigas
business districts—and accounts for half of the
country’s gross domestic product, that seems to
be the most economically logical plan.
The region, however, is bursting at the seams.
Cavite is growing at 6% per annum and Rizal
at 5.7 percent. Twenty-six million people as
of 2000 occupy 41 square meters of land.
Traffic is incredibly congested and the dreamed
logistic strength, ironically, needs more
infrastructure investment.
Subic-Clark-Tarlac Expressway
President Gloria Macapagal Arroyo, in her
State of the Nation speech indicated that she
wasn’t blind to the weaknesses of the region.
She said: “To be world-class, we invest in
five comprehensive strategies for global
competitiveness [in the Luzon Urban
Beltway]:
1. Make food plentiful and affordable to
keep our labor cost globally competitive;
2. Reduce the cost of electricity to make our
factories regionally competitive;
3. Modernize infrastructure at least cost to
efficiently transport goods and people;
4. Mobilize, upgrade and disseminate
knowledge and technologies for
productivity; and
5. Reduce red tape in all agencies to cut
business costs.
There are also other non-economic
considerations, namely human trafficking and
red tape.
The business plan is to eradicate all these
weaknesses with reforms in both soft and hard
infrastructure.
The network of roads and railways will move
goods and people more efficiently.
12/22/08 5:25:08 PM
 Socioeconomic conditions
In a services-oriented economy, companies’
greatest assets, people that move up and down
elevators and ride commuter trains may opt to
migrate to other countries or scale down living
to the provinces, and occasionally get burned
out, cold feet, and even kick the bucket. No
wonder that for the Luzon Urban Beltway, a
high quality of life for its people is a crucial
precondition for reaching First World status.
People need to spend less hours on the road
in traffic, have stable and high-paying jobs,
be allowed to take time off for recreation, and
build families that are happy and contented.
The figures show there’s still much to be done.
Marinduque, Mindoro Oriental and Mindoro
Occidental suffer from worsening poverty,
with an incidence level of 40%, higher than
most of Asia. By Asian standards, even Bataan,
Bulacan, Pampanga, Tarlac, Zambales, Cavite,
Laguna, Batangas, Rizal and Quezon’s average
poverty incidence level is still steep at 13%
to 14%. Metro Luzon’s labor force makes
up 39% of the country’s total. Because of
the population density, many live in muddy
shanties hidden under city bridges and behind
DBP Yearbook Inside Rev3 (Final)15 15
colorful, humongous billboards. Housing
backlog is projected to be at 95,000 from
2005 to 2010, or 48.5% of the total backlog in
the country. There are not enough hospitals,
classrooms and teachers for the rising
population.
The government says it will solve these issues
by improving the quality of basic social
services (it is targeting medical tourism for
subsidizing health services for the poor),
creating onsite and off-site housing for
informal and low income dwellers in Metro
Manila and expanding the public transport
system so they can still come to work without
spending half of their day on the road.
“So that our commuters in Metro Manila
will not be so tired, we will spend money
on expressways and trains. We will have a
continuous highway from Clark to Metro
Manila to Batangas Port.
We will construct the Northrail to Clark and
the Southrail to Lucena and on to Bicol, and
upgrade the link between them. We will also
extend the LRT to Bacoor,” Arroyo said in her
2007 SONA.
The government has also prioritized reducing
air and water pollution, for example by
cleaning up and developing Manila Bay, the
Pasig River and other major river systems and
tributaries, and turning concrete jungles into
residential gardens. Property developers like
Ayala Land, and other companies within the
highly competitive real estate industry have
taken on the challenge of greening Metro
Manila.
Lately, taxicabs that have converted to liquefied
petroleum gas and buses that use compressed
national gas have been plying Manila streets,
and reducing air pollution, thanks to the spike
in oil prices early in 2008.
The vision
The Arroyo administration envisions Bataan,
Bulacan, Pampanga, Tarlac and Zambales—
together—as a human resource transshipment
and logistics hub in the Asia-Pacific region
and as a developed industrial heartland with
seamless and integrated physical access into
the area.
The least advanced of the super region,
The 2008 PBD Yearbook I 15
12/22/08 5:25:17 PM
 Mindoro Oriental and Occidental and
Marinduque can be a gateway to southern
Philippines and a food basket for Metro Manila
and Calabarzon.
Region IV-A (Cavite, Laguna, Batangas,
Rizal and Quezon) will house the region’s
greatest assets, with well-planned town clusters
supported by modern intermodal transportation
and digital infrastructure to connect them with
each other and preserve their quality of life.
The National Capital Region, stretching
from Quezon City all the way to Paranaque
and Alabang, will be maintained as a major
business and transaction center in the Asia-
Pacific region.
Information technology parks and special
economic zones will play major roles in this
vision. There are 24 IT parks now in the region,
accounting for 82.75% of the country’s total
and 39 special economic zones or 81.25%
of the total. These areas were built to cater
to companies looking for fiscal incentives,
buildings designed for efficiency and structures
that will complement industries.
Clark and Subic are being groomed to be
logistic hubs since they are located at the heart
of Asia. Air travel from both areas to major
cities such as China and Hong Kong takes less
than two hours. Singapore, Seoul, South Korea
and Thailand are just three hours away. Tokyo
is four and the United States is 18.
By sea, Tokyo and Kuala Lumpur are farthest,
but only six hours away, while Seoul is five,
Brunei, Beijing and Singapore at four, and
Taipei and Bangkok are only three hours away
by sea.
Interventions
The proximity, however, might as well be
ignored without world-class airports and
ports. Clark and Subic both have international
airports and are increasingly servicing flights,
but not yet at optimum levels. The government
believes it can make the Batangas port fully
operational before 2010, and use Sangley Point
and Fernando Airbase for civil aviation.
Electricity, however, is still expensive. At
US$0.09 per kilowatt hour for residential areas,
US0.0933 for commercial and US$0.0809
for industrial, power in the region costs much
more than in South Korea, Malaysia, Vietnam,
China, Thailand and Indonesia. This is a
major concern for the super region, which will
The 2008 PBD Yearbook I 16
DBP Yearbook Inside Rev3 (Final)16 16
depend on efficient power distribution and
generation and cheap electricity to electrify its
industries and businesses.
The controversial Wholesale Electricity Spot
Market, the government says, has already
reduced the cost of electricity since it was
implemented in 2006.
Other interventions to improve the super
regions are to upgrade the information and
community technology infrastructure (a big
technology hub in Quezon City near the UP
Diliman Campus is testament to the private
sector and government cooperation about this),
English training and streamlining of business
approval processes.
Compared with Vietnam, China, Indonesia,
Malaysia and Thailand, Filipinos in the Luzon
Urban Beltway have higher minimum wage
rates at US$4 to US$6 per day.
This is partly because of the high cost of living:
food is expensive and cheap and potable water
do not flow from faucets and are instead mostly
bought.
The government has listed both high on its
priority list and has started plans to develop
Aurora, Marinduque, Mindoro and Nueva
Ecija as food baskets for the super region.
Fruits, vegetables and other food items are
to be efficiently transported from Mindanao
and the Cagayan Valley to the Luzon Urban
Beltway through efficient transport systems.
New water sources are also being developed,
namely the Wawa Dam, Laguna Lake and
Laiban Dam.
MRT-3 passengers
To be truly an Asian center of commerce, the
government wants to open up the Pacific Coast
but are swamped by problems such as the
narrow development corridor due to geographic
constraints of the Sierra Madre Mountain
range, the Laguna Lake and the Manila Bay.
The solution: construct East-West roads like
the Marikina-Infanta Road and the Umiray-
Dingalan Road, and rehabilitate existing roads
like the Nueva Ecija-Aurora Road.
There will be new road constructions and
upgrading of facilities in Real and Dingalan.
Update on projects
As of May 2008, four projects have been
completed in the Luzon Urban Beltway super
region: the roll on-roll off ports of Lucena and
Cawit and the port of Batangas were the first to
be completed in 2007.
In early 2008, the Subic Port was finished,
completing all four priority LUB projects. The
four projects, amounting to P14.14 billion,
enhanced the RoRo and sea port facilities and
services in Luzon.
Fourteen more road projects are being
constructed to interconnect the industrial,
commercial and transport hubs of the super
region:
1. The Subic-Clark-Tarlac Expressway
Project’s Clark to Tarlac leg and eight
overpasses are under construction, which
will truly make the expressway useful for
agribusinesses from North Luzon;
12/22/08 5:25:19 PM
 2. SCTEX Porac Interchange which will
enhance traffic and logistics along the
SCTEX and improve its accessibility to
Pampanga;
3. Tarlac-La Union Toll Expressway,
which will support the socioeconomic
development of Regions I, II and
CAR, and help decongest traffic along
McArthur Highway;
4. Tarlac-Nueva Ecija-Aurora-Dingalan
Port Road connecting the XCTEX to the
Dingalan Port in Aurora;
5. North Luzon Expressway Project, which
will connect existing roads through an
84.5-kilometer parallel expressway to the
east of the Pan-Philippine Highway, from
Plaridel, Bulacan to San Jose, Nueva
Ecija
6. C5-NLEx-SLEx Link that will connect
the North Luzon Expressway to the
South Luzon Expressway via the C5
Road.
DBP Yearbook Inside Rev3 (Final)17 17
7. EDSA Rehabilitation Project, which is
hoped improve travel time and pedestrian
safety along Metro Manila’s main
artery involves re-blocking, sidewalk
rehabilitation, among other things. The
Bicutan Interchange has already been
completed and the EDSA-LRT Corridor
construction is expected to be finished by
March 2009.
8. C6 Lakeshore Expressway will serve as
an alternative North-South expressway
link to decongest EDSA, C5 and its
arterial roads through a 16.7-kilometer
expressway from the Bicutan Interchange
to Ortigas Avenue Extension;
9. Metro Manila Skyway Stage 2 will link
the NLEx to the SLEx.
10. SLEx Extension Project will rehabilitate,
upgrade and expand the Alabang
Viaduct and the toll road from Alabang
to Calamba, and construct a toll road
connecting SLEx to the Southern Tagalog
Arterial Road;
11. Manila-Cavite Toll Expressway Project
will connect Zapote, Las Pinas to Kawit,
Cavite;
12. Daang Hari-SLEx Link Road will link
Daang Hari in Bacoor, Cavite to the
SLEx;
13. Southern Tagalog Arterial Road Project
Phase II is a 19.74 kilometer road that
will cut travel time from Sto. Tomas
in Batangas to Batangas City by 40
minutes; and
14. Marikina-Infanta Road will link
Sumulong Highway to Masinag,
Antipolo, traversing the Sierra Madre
Mountains to the intersection of
Sinoloan-Famy-Real-Infanta rad.
Government is investing around P202.23
billion in eight railways in the super region
that will not only speed up travel but will also
connect North and South Luzon and close the
MRT and LRT loop.
These are
The 2008 PBD Yearbook I 17
12/22/08 5:25:21 PM
 1. Northrail Project is an 80.2-kilometer
rail track that will cut travel time from
Caloocan to Malolos, Bulacan by 42
minutes and from Malolos to Clark,
Pampanga by more than an hour;
2. Northrail-Southrail Linkage Project will
rehabilitate the 34-kilometer railway
from Caloocan to Alabang and upgrade
the 27-kilometer railway from Alabang to
Calamba, Laguna;
3. LRT Line 1 North Extension will extend
a 5.4-kilometer elevated seamless line
from the Monumento Station of LRT
Line 1 to the North Avenue Station
of MRT 3 to reduce travel time from
Monumento to North EDSA from 21
minutes to seven minutes;
4. Metro Rail Transit 3 Capacity Expansion
will involve buying more light rail
vehicles from 2008 to 2014 to transport
more people;
5. MRT 7 is a 22-kilometer rail transit
system, with 14 mostly elevated stations
from the North Avenue station in
EDSA, Quezon City to the Intermodal
Transportation Terminal in San Jose, Del
Monte Bulacan;
6. LRT Line 2 East Extension to Masinag
extends the LRT Line 2 (Recto to
Santolan) eastward to Masinag, Antipolo;
7. LRT Line 1 Extension is an 11.7-
kilometer railway line extension from
LRT Line 1 in Baclaran to Bacoor, Cavite
to cut travel time; and
8. Southrail Project Phase IA will
rehabilitate the railway line from
The 2008 PBD Yearbook I 18
DBP Yearbook Inside Rev3 (Final)18 18
Calamba, Laguna to Lucena, Quezon to
shorten travel time.
Two new airports, Diosdado Macapagal
International Airport will promote Clark as
one of the best international logistics and
services center in the Asia-Pacific Region, and
the controversial Ninoy Aquino International
Airport 3 has a capacity of 13 million
passengers per year on a 63.5-hectare site
of the Villamor Air Base has already began
servicing flights this year.
Power and energy projects, amounting to
P48.7 billion, are expected to improve the
generation and distribution, and lower the cost
of power.
1. The 230-kilovolts Concepcion-Clark
Power Transmission Project will provide
reliable and more efficient transmission
system to serve the growing power
demand of the Clark economic zone.
2. Bataan Liquefied Natural Gas Terminal
will create a 180 million cubic feet per
day facility that will serve as a receiving
terminal of imported LNG. Discussions
on business strategies have begun early
this year.
3. Bataan-Manila Pipeline is a 140-
kilometer natural gas transmission line
and distribution facility. This is expected
to be completed in 2012, but discussions
are ongoing.
4. Binan-Sucat 230-kilovolt Transmission
Line Project will install a 14-kilometer
transmission line at the Binan-Laguna
and Sucat, Paranaque City substations
to increase transfer capacity by 880
megawatts and accommodate the power
Government’s vision is not just to make
the Luzon Urban Beltway the center of the
country’s industrial and service sectors but
also to also turn the region into something
that will rival Hong Kong and Singapore,
and other wealthy Asian cities. As of 2004,
services account for 59% of Metro Luzon’s
gross regional domestic product, while
industry contributes 34% and agriculture,
forestry and fishery a minimal 7%.
grid requirement of South Luzon. Bid
documents are up for finalization.
5. 350 megawatt expansion of the Pagbilao
Coal-Fired Power Plant. Studies and
technical reviews are ongoing.
Government is pursuing P9.88 billion
worth of flood control projects, namely the
KAMANAVA area flood control and drainage
system improvement project and the Pinatubo
Hazard Urgent Mitigation Project to lessen
damages in Sasmuan, Guagua, Lubao and San
Fernando City in Pampanga.Two water projects
costing P11.35 billion will secure the region’s
water supply. One will benefit 2.25 million
people living in Muntinlupa, Paranaque, Las
Pinas, Pasay, Bacoor and Imus; and the other
will recover raw water lost due to leaks and
ensure the structural integrity of Angat Dam,
which conveys half of the water supply of
Metro Manila.
There are 80 small irrigation projects that
have already been completed, but 40 more are
ongoing, one septage treatment plant project
in Antipolo, upgrading of 10 hospitals and
relocations and housing projects. There is no
way but up for this region, and the government
is running on a deadline, things that astute
investors are already taking advantage of.
–Ma. Salve Duplito
12/22/08 5:25:23 PM
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 Central Philippines
A tourist
haven
FOR YEARS, traveling by road from
Mindanao, the southern-most major island
of the Philippines, to Metro Manila was
impossible. Around 2,075 islands and
islets stand between Mindanao and Metro
Manila; and before 2006, there was a lack
of respectable roads, bridges and ferryboat
facilities between them.
In September 2008, Ma. Jennelyn and Jonathan
Montales, a young couple eager to see the
beauty of the Philippine countryside, decided
to travel by land from Davao to Metro Manila
when the company Jonathan was working for
asked him to relocate. They left Davao with
one-week’s worth of clothing and supplies in
their Nissan Frontier, sat baby Jill securely in
her seat, and went northward in the adventure
of their lives. They had earlier shipped the rest
of their belongings by container van to their
new home in Malolos, Bulacan.
The leisurely drive brought them from Davao
to Surigao where they enjoyed a four-hour
roll-on-roll-off (RORO) trip on calm seas
from Lipata Port to Liloan Leyte. From there,
they drove for two hours going to Tacloban,
stopping along the road for lunch and snacked
while driving. They even had time to see
where Gen. Douglas McArthur landed and to
sleep at Hotel Alejandro in Tacloban, a hotel
with a historical collection of World War II
memorabilia.
“It was like Corregidor, and we enjoyed it
immensely,” Jennelyn said.
The next morning began with a drive that
led them to San Juanico Bridge that connects
Leyte and Samar; then another RORO ride
(this time for two hours) going to Matnog,
Sorsogon. They spent two days at Pepperland
Hotel in Legazpi City and went on to Manila
after the leisurely weeklong trip. The cost: less
than P20,000 including fuel, food and port fees.
Much cheaper than if Jennelyn, Jonathan and
baby Jill took the plane and had the Nissan
Frontier shipped to Manila.
“It would have cost the company P36,000
just to ship the car. Plus we had a great time
The 2008 PBD Yearbook I 24
DBP Yearbook Inside Rev3 (Final)24 24
bonding together as a family for one whole
week,” said Jennelyn. “It was surprisingly easy
and the roads, except for Samar’s, were really
good,” she added.
Transformation
The transformation is part of the results of
a master plan for the Central Philippines
super region created by President Gloria
Macapagal-Arroyo in 2006 under Executive
Order 561. During her State of the Nation
Address on the same year, Arroyo explained
why the super region would be developed
mainly for tourism.“Central Philippines has
the competitive edge in tourism in its natural
wonders and the extraordinary hospitality of
its people. The area sweeps across Palawan
and Romblon, the Visayas and Bicol, plus
the northern Mindanao islands of Camiguin,
Siargao and Dapitan. Topbilled by Boracay,
Cebu, Bohol and Palawan, it attracts more than
half of the foreign tourists to the Philippines.
It is also the center of geothermal power in
the country, which we continue to develop,”
Arroyo then said.
Central Philippines spans 24 provinces, 45
cities, 524 municipalities and 63 congressional
districts. Its land area is 30.5% of the entire
Philippines and it has 39% of the country’s
coastline—long white beaches and rich coastal
marine resources, which includes world-
class Boracay.Seven of the country’s most-
visited beaches are found in the geographical
regions of Cebu, Aklan, Negros Occidental,
Bicol, Samar, Palawan and Mindoro. Central
Philippines has nine primary growth areas:
Naga, Legazpi, Tacloban, Tagbilaran, Cebu,
Sailing in Boracay
Dumaguete, Bacolod, Iloilo, and Puerto
Princesa. Outside these cities are mountains
where peaks reach 900 meters, hills, river
basins, flood plains, plateaus and valleys.
The area is ripe for eco-tourism, a recent craze
in the tourism industry. It has 73 declared
National Integrated Protected Areas System
areas covering more than 320,000 hectares; and
38 proclaimed watershed reserves accounting
for almost 311,000 hectares of the super region.
Topbilled by
Boracay, Cebu,
Bohol and
Palawan, Central
Philippines
attracts more
than half of the
foreign tourists to
the Philippines
While tourists ranging from domestic to
Hollywood personalities to royalty have beaten
the path to Boracay, only few have discovered
the lonely and pristine beauty of places like
Sagay City where an island no bigger than
12/22/08 5:25:44 PM
 the size of an average store in a mall during
high tide boasts of ultra clear waters and a rich
diving spot offering the sight of the biggest
clam in the Philippines. There’s Pucio Point,
suspected to be the deepest point in the world
next to the Marianas Trench, in the Antique
Province, and dozens more of hidden surprises
for the tourist looking for places to unwind.
The uneven development of tourist attractions
indicates there is still huge untapped potential
in Central Philippines.
Tourism revenues from Central Philippines
reached P83.82 billion in 2005, with Western
and Central Visayas getting the lion’s share,
raking in 38% and 35%, respectively. In
2007, 5.84 million tourists trooped to central
Philippines. “Using sustainable tourism as the
main development thrust enables this super
region to tap the development potentials of
even the smaller islands and protect these
islands’ fragile marine and coastal ecosystem,
Medium, small and micro enterprises,
agribusiness and other job-generating activities
will be spurred by an enhanced infrastructure
program and an increase in tourism activities in
this Super Region,” a government brochure on
the super regions states.
DBP Yearbook Inside Rev3 (Final)25 25
As of 2004, Central Philippines accounted
for 20.8% of the country’s economic output,
with Central Visayas and Western Visayas
providing bulk of economic activity.
In 2006, the region saw the highest growth in
mining and quarrying, followed by the sectors
of electricity, gas and water, agriculture
and fishery, trade, and consumption. Private
services, which include tourism, grew
6.5% but contributed 10.2% to the super
region’s gross regional domestic product.
The master plan for the Central Philippines
Super Region, based on documents from the
National Economic Development Authority,
shows that seven “strategic themes” for
the area revolve around harnessing coastal
and marine resources and addressing the
small islands’ fragile ecosystem, linking
the islands through efficient transportation
and communication facilities, promoting
the Central Philippines Tourism Center,
developing agribusiness, small-and medium-
sized enterprises and export potential,
pursuing responsible mining and quarrying,
optimizing power potentials and ensuring
adequacy and sustainability of supply and
enhancing social services.
Harnessing coastal and marine resources
Central Philippines’ numerous bays and gulfs
are far superior to those of other Southeast
Asian countries, and yet, none are included in
popular Asian cruises.
The super region’s fishing grounds account
for 37% of the national fish production. There
are 10 existing mariculture parks (at least five
hectares in size) that yield milkfish (bangus),
grouper, siganid, seaweeds, abalone, mussel
and oysters. Thirteen more are planned for
Samar, Cebu, Bohol, Negros Oriental, Palawan,
Coron and Calatrava.
For ecotourism, the Northwest Panay Peninsula
Reserve, for example has been declared the
last ecological frontier in the Philippines, with
endangered species such as the writhed-billed
hornbill (aceros waldeni), the Visayan tarictic
(Penelopides panini), the Negros bleeding heart
pigeon, the Philippine hawk eagle, and the
Visayan spotted deer. There are 15 more small-
island fragile ecosystems scattered all over the
region that indicates there’s something in the
Central Philippines not just for the senses, but
also for the soul seeking to understand nature.
The 2008 PBD Yearbook I 25
12/22/08 5:25:45 PM

However, years of overfishing using cyanide
and dynamite, siltation in mangrove habitats
and both domestic and industrial pollution
may endanger these ecosystems. The national
government, with the help of local government
units in the super region, is rushing to create
fish sanctuaries in municipalities and enforce
fishery laws to prevent more damages. The
plan to protect these ecosystems also involves
planting mangroves, rehabilitating coral reefs,
and using an integrated approach to watershed/
river basin and coastal management. Across
the super region’s coastal areas, all these
interventions will not be sustainable without
the support of locals, many of whom through
years of ignorance and neglect, pollute their
natural treasures.
Linking the islands
Jennelyn and Jonathan’s experience two
months ago shows that the western, eastern,
and central nautical highways are not purely
government public relations stunts, but the
ambitious plans to link the more than 2,000
islands within the Central Philippines super
region will require even more investments in
roads, bridges and RORO facilities.Road links
from places like Cataingan to Aroroy, Masbate,
and then a RORO-boat link from Aroroy to
Pilar, Sorsogon, plus a host of other capital-
The 2008 PBD Yearbook I 26
DBP Yearbook Inside Rev3 (Final)26 26
intensive road projects are expected to reduce
travel time from Mindanao through Visayas
to Luzon by 10 hours and to cut transport cost
of people by 40% and cargo by 30%, based
on the 2004-2010 Medium Term Philippine
Development Plan of the Arroyo government.
A NEDA-United Nations Development
Program study released in 2005 shows that
freight cost P1.75 per kilo via container van,
but this can go down to P1.68 via RORO.
Losses and spoilage, handling and wharfage
costs are also bound to come down, resulting
in a total transport cost savings of P1.35 per
kilo.
These may, however, be offset by taxes and
regulatory fees from local government units
and cargo handling costs in RORO ports.
There is also much to be done to improve
existing air links in the region. Airports
and feeder ports are a major component of
the Arroyo’s infrastructure plan for Central
Philippines so that the region can fully benefit
from the country’s proximity to major cities
like Japan (four hours away from Mactan
Cebu International Airport), Hong Kong (two
hours) and Singapore (three hours). Small
things also matter much to the weary traveler
like signages, rest areas and clean toilets.
Boracay sunset
Because the business and knowledge process
outsourcing sectors are major investors in the
region, the Arroyo administration also dreams
of a central Philippines that is not just linked by
roads and nautical highways, but also by fiber
optic and wireless networks. This is a challenge
especially in smaller islands that abound in the
super region, a problem that can only be solved
with the support of local government units.
Promoting tourism and small businesses
From rich dive sites, to Palawan’s famous
underground river, from caves to volcanoes,
from whale sharks, to manta rays to dolphin
watching, possibly no area in the entire
Asian region is more densely packed with
natural wonders as Central Philippines.
The super region master plan has created
a more focused tourism brand image for
the region, with coordinated marketing of
tourism sites packaged together in island
hopping experiences, for example. As the
tide of tourism is lifted, so do boats of small
business serving the sector, as well as export
companies that can be competitive with the rest
of the world. At present, the major exports of
Central Philippines are sea vessels, electronics,
furniture, wearables, fashion accessories,
handicraft, house décor, gifts, toys and house
wares and agriculture products like coconut and
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the increasingly popular virgin coconut oil (12%
of Central Philippines is planted with coconut),
mango, abaca, nuts and seaweeds. In The
shipbuilding industry received in 34 bulk carrier
orders in 2006 for delivery in 2009.
To realize the vision of more tourist arrivals
and SME growth, the government has gone
on numerous entrepreneurship workshops and
caravans, created one-stop shops for business
documentation and enterprise advisory under
the Department of Trade and Industry, improved
infrastructure like airport and port facilities
and is hard at work on ensuring reliable power
supply.
Available areas for investments are the Rio Tuba
Special Economic Zone in the ROPA region
with 423.9 hectares, the Bicol Industrial Park,
Global Industrial Maritime Complex, the Isarog
Heights Special Economic Zone, the Legazpi
City Special Economic Zone, the Naga Agro-
Industrial Center, te Rapu-Rapu Economic Zone
and the Tiwi Ecozone in the Bicol region.
Further down south are the Leyte Industrial
Development, the Leyte ICT Park, the
Amihan Woodlands Township, the Asia Town,
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Bais, Cebu Cybertown IT Park, the Cebu
Light Industrial Park, the Cebu South Road
Properties, the Federated IT Park and the
Mactan Export Zone in the Eastern Visayas.
Mira Nila in the Central Visayas appears to be
the largest with over 3,000 square kilometers.
The others are the MRI Ecozone, the New
Cebu Township, the Panglao Tourism Estate,
the Pulambato-Bogo, Polo Ecocity and West
Cebu Industrial Park, all in Central Visayas.
Responsible mining
Some of Central Philippines’ riches will have to
be extracted and dug out to be enjoyed. Based
on June 2006 estimates, there’s an estimated
$367.4 billion worth of nickel reserves in the
super region, accounting for 90% of the area’s
potential mineral resources. Copper is valued at
$30.2 billion, while gold is at $14.2 billion.
Central Philippines also accounts for almost
20% of the country’s mineral production, which
is why there are around 18 existing mining
projects in the area and at least 16 more are
starting to explore in what they believe are
mine sites that will yield precious metals and
Whitewater rafting
minerals.However, the government is watching
out for unsustainable practices of informal or
small-scale mining operations, conflicts arising
from overlapping claims made by mining
companies and indigenous communities, poor
community acceptance of large scale mining
operations due to environmental concerns and
share in benefits and sand extraction in offshore
areas resulting to a scarring of the environment.
With the help of organizations like the US
Agency for International Development, even
non-government organizations are trying to help
solve the problem by simplifying procedures
for processing local government units’ share in
excise taxes to give them ownership over the
mining operations that are approved in their
areas. Some of the interventions for Central
Philippines also involve rehabilitating mined-
out areas in accordance with Environmental
Protection and Enhancement Program and Post-
mining Land Use Plan.
The Philippine Mining Act and People’s Small
Mining Act are also expected to help improve
responsible mining in the areas, as well as a
more robust partnership between province and
private sector through corporate vehicles.
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 Power supply

Tourism and business will not thrive when

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

This has caused power rates to be fairly

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

Many Palawan, Masbate, Northern Samar, and

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

With sustainability of power becoming more of

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

Wind energy is also encouraged for

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

Update on projects

There are 52 priority infrastructure projects

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

The improvements are happening, but

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

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 Agribusiness
Mindanao
Making
the promise
a reality
When the Mindanao super region was created
in 2006, President Gloria Macapagal-Arroyo
said the country’s second biggest island is
the government’s priority for agribusiness
investments in the south, and that she will plow
in more money in the super region than in the
others.
“Our investment priorities mirror those for
North Luzon and more because Mindanao has
the poorest regions and poorest provinces and
because we have to spend on a logistics system
linking it to the north,” she said in her 2006
State of the Nation Address before the 13th
Congress.
The super region is composed of 25 provinces,
27 cities, 411 municipalities and 10,044
barangays encompassing Regions IX, X except
Camiguin, XI, XII, Caraga except Siargao and
Autonomous Region of Muslim Mindanao. It is
where more than 18 million Filipinos live.
Then presidential adviser for the peace
process (now press secretary) Jesus Dureza
was appointed as development champion for
the region and he promptly met with local
government executives in Mindanao eager to
jumpstart economic activity in the super region,
which accounts for 35% of the country’s land
area.
The pregnant expectations from local chief
executives were to be expected. The plans for
the super region were anchored on the creation
of five major growth centers that would turn
central and northern provinces into a major
transshipment hub; western and northern
provinces into a fishery and mariculture center;
the northern and eastern provinces into an
agro-forestry and mineral center; the center
provinces into an agri-industrial core and the
eastern southwestern provinces, including
Davao, into an urban and agri-industrial center.
Imagine how these would benefit the 8.514
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DBP Yearbook Inside Rev3 (Final)38 38
million persons in the labor force as of 2006,
5.4% of which were unemployed and 26%
were underemployed. Official poverty statistics
also showed that 39.1% of Mindanao was
still under the poverty line. The super region,
likewise, accounted for 23% of the national
housing backlog with almost 140,000 housing
units needed.
Strategic themes
As is the case when government and business
want to invigorate an economy, infrastructure
investments take priority. These projects are
expected to turn Mindanao into the country’s
main agri-fishery export zone with brisk
activity in fruit and vegetable production and
processing, feed milling, animal production,
meat processing, snack foods, coconut,
ornamental horticulture production and
industrial tree plantations.
Almost all rubber exports, for example,
come from Mindanao, with six oil palm and
rubber plantations scattered all over the super
region. The other major crops include cacao,
pineapple, banana, coffee, cassava, corn and
coconut. There are eight banana plantations
that cluster in the central area of Mindanao and
two pineapple plantations, one in Bukidnon
and another in Polomoloc. The major
agricultural exports so far are coconut oil,
banana, tuna, pineapple (fresh, preserved and
juice concentrates), oil, rubber and desiccated
coconut.Several companies have already
discovered the seaweed, palm oil, coco-
based and halal poultry industries’ potentials.
Economic zones that are ready for occupancy
for new entrants include the Ayala de
Zamboanga Park in Region IX, First Cagayan
de Oro Business Park, Jasaan Misamis Oriental
Ecozone, Pueblo de Oro IT Park, Global Ispat
Industrial Park and NSC Special Economic
Zone in Region X. In Region XI, the five
ecozones are the Apo Estates Special Economic
Zone, the First Oriental Business & Industrial
Park, the Samal Casino Resort, the SRC
Calumpang and Tiger Valley Industrial Estate.
Region XII has four, namely, the CIIF Agro-
Industrial Park, Filinvest Technology Park
General Santos, the General Santos Special
Economic Zone and the Sarangani Economic
Development Zone.
In the Caraga Region, there’s the Nasipit
Agusan del Norte Industrial Estate, the Philnico
Industrial Estate, Shannalyne Technological
and Environmental Park and the Tuba Agro-
Processing Center. In ARMM, there is only
one, the Maguindanao Ecocity.
Official figures show that minimum wage rates
in Mindanao are still much lower compared
with neighboring countries (Malaysia,
Thailand, Taiwan, South Korea and Singapore),
at $3.28 to $4.10 per day. Electricity costs
are also lower at P4.62 per kilowatt-hour,
compared with the P6.27 per kilowatt hour
average price for the country.
The way for an even better agri-business sector,
based on the super region master plan, is to
intercrop in coconut plantations and to urge
12/22/08 5:26:14 PM
 local government units to invest in post harvest
facilities. Hybrid rice and corn are also being
promoted and state universities have been
given mandates to research and develop better
ways of expanding mariculture development
and agri-business produce.

For fisheries, the Medium Term Philippine

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

For livestock and poultry development,

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

The plan also intends to expand goat production

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

Mineral resources are also a major strength of

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

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

Gas and oil deposits are also found in the Sulu

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

Roads and bridges

Under the plans for the super regions, the

government intends to supply international
demand for fish products.

For this to be sustainable, it will regulate

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

To supply such demand, all these strategic

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

Mindanao is the beneficiary of nationwide

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

The going, however, has been slow. Only

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

Aside from the three completed, there are

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

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

The Dakak-Dapitan Road project will widen 10

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

A bigger and longer road, the Dinagat Island

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

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

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

Iligan City’s growing traffic congestion is

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

The Zamboanga West Coast Road, also known

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

In Davao, the strongest geographical region

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

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 Manay-Mati, Cortez-Tandag-Marihatag,
and Bislig-Manay. As of end-May 2008,
the 66.65-kilometer Manay-Mati section in
Davao Oriental is almost complete (90%),
and the whole project should be completed
by June 2010. The Davao region, which has
traditionally been agri-based is morphing
with amazing speed into a center for agro-
industrial business, trade and tourism because
of its bananas, pineapples, fresh asparagus,
and fish products that are exported to different
countries, especially to Brunei Darussalam and
parts of Malaysia and Indonesia.
To link Tubod, Lanao del Norte and Tangub
City in Misamis Occidental, which has the
biggest area of brackish-water fishponds in
the region and is famous for seafood, the
government is also constructing the P4.45-
billion, 2.36-kilometer Panguil Bay Bridge.
Based on the plan, the bridge will allow
unimpeded flow of goods and services between
Lanao del Norte and Misamis Occidental.
Airports and sea ports
Aside from road networks, airports are also
one of the major components of the Arroyo
administrations infrastructure plan for the
Mindanao super region. Nothing delights a
businessman or investor more than modern,
efficient and well-maintained airports.
Government has seven airport projects for
Mindanao to transport people and produce
from the region to the Luzon Urban Beltway,
costing P9.802 billion.
The Butuan Airport’s timetable shows it should
have been done by September 2008, but the
project has been delayed. Improvements were
made in the runway extension, widening,
asphalt overlay, air navigation facilities, airfield
lighting system and the terminal building.
Cotabato Airport is expected to be completed
in February 2009, at a cost of P302 million.
Some of its components like the supply and
installation of the O-shaped carousel conveyor,
relocation of runway lights, rehabilitation
of the terminal building and air navigation
facilities were still in the bidding process as of
end-May 2008, but the asphalt overlay of the
runway and its widening has been completed.
Dipolog’s airport also got a facelift to the
tune of P353 million. The project involved
shore protection, asphalt overlay for the
runway and widening, a perimeter fence, a
better administration, terminal and fire station
buildings, and air navigation facilities.
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In Misamis Oriental in the northern part of
Mindanao, a totally new international airport
is being built in Laguindingan. Airlines are
expected to start using the airport by January
2012, providing people and goods access to
Cagayan de Oro City and Iligan City. It will
replace the existing Lumbia Airport in Cagayan
de Oro and will be the first international airport
in Northern Mindanao. Other areas that will
benefit are five coastal towns in Lanao del
Norte, El Salvador City and Gingoog City of
Misamis Oriental.
Three other airports are also being rehabilitated
and improved, one in Ozamis, another in
Pagadian and the last in Zamboanga del Sur,
costing the government a total of P987.46
million.
As for seaports, two major projects costing
P995.49 million are expected to contribute
to the super region’s competitive edge in
agribusiness. The Cagayan de Oro port in
Misamis Oriental should be fully operational
by February 2009 with a better back-up area
for the newly constructed wharf.
The Davao Port in Sasa, Davao City will
cost P422.62 million and is expected to be
completed by January next year.
Irrigation and power
In an agribusiness zone, water and power come
together to improve yield. Irrigation projects in
the Mindanao super region is seen to expand
the country’s palay production by 302,851
metric tons.
The Kabulnan Irrigation project straddles
Maguindanao and Sultan Kudarat, costing a hectares, which should benefit 18,000 families
huge sum of P13.52 billion and expected to and increase palay production by about
be completed by December 2012. It will have 138,851 metric tons.
the capacity to irrigate 20,000 hectares of
land, boosting palay production by 109,795 Power and electrification has been major
metric tons annually. Documents from the problems in this huge super region. Although
National Economic Development Authority the 210-megawatt Mindanao coal-fired power
(NEDA) show it should benefit up to 10,000 plant by the National Power Corp. in 2006
farm families in the area and allow the provided adequate power supply until this year,
fisheries sector to benefit from the 610-hectare government forecasts that Mindanao will need
water surface area of the reservoir. On top of additional capacity of 100 megawatts.
that, it will generate up to 66 megawatts of
hydroelectric power. Government is already The Arroyo administration is, thus, preparing to
looking for funds for this massive irrigation spend P29.22 billion on nine electrification and
project. power projects to meet this rising demand.
Aside from this, 119 small irrigation projects The P16.27-billion 210-MW clean coal-fired
have already been funded in 2007, while power plant, constructed under the build-
141 are still undergoing restoration and operate-and transfer scheme and currently
rehabilitation. All told, they cover 16,933 operated by STEAG State Power Inc., was built
12/22/08 5:26:31 PM
 to increase the energy supply of Mindanao by
generating an additional 210 megawatts (MW)
of electrical capacity. It currently supplies
20.61% of Mindanao’s total generation mix.
Completed and operational in November
2006, the plant is currently helping stabilize
Mindanao’s power supply by reducing its
dependence on relatively expensive oil-based
power plants.
The solar-powered plant in Cagayan de
Oro was built at a cost of P265 million
and started operations in September
2004. The plant, which consists of 6,5000
polycrystalline silicon-based panels, is located
in Brgy. Indahag, Cagayan de Oro City,
Misamis Oriental but provides power for
the municipalities of Jasaan, Tagoloan and
Villianueva in Misamis Oriental. The plant is
100% emission-free and has no identified threat
to the public’s health. Moreover, the plant’s
operational costs are minimal, as compared to
conventional power plants (i.e., diesel and coal-
fired power plants) since its operation is fully
automated, requires only ancillary services for
daily maintenance.
DBP Yearbook Inside Rev3 (Final)43 43
The Agus 3 yydroelectric power plant in
Pantas, Lanao del Norte is a P1.68-billion
project. The Lanao Hydropower Corp. has
created a special purpose company, the Agus
3 Hydropower Corp., to implement, construct,
operate, and eventually maintain the power
generating facility in the long run.
The P1.90-billion Agus 6 yydroelectric power
plant units 1 &2 upgrading project in Iligan
City shall enhance the power generation
capacity of the plant by the time it is completed
in December 2010. The National Power Corp.
is currently reviewing bids for the project.
By 2009, the P8.01 billion Abaga-Kirahon-
Maramag-Bunawan transmission project will
establish the backbone transmission system
from Northern Mindanao, where the majority
of the cheap and environment-friendly hydro
plants are located, to Southern Mindanao,
where the bulk of the major industrial and
commercial customers are. The project is
divided into three (3) transmission sections: the
Abaga-Kirahon (138 kV), Kirahon-Maramag
(230 kV), and Maramag-Bunawan (230
kV). All the portions are under right-of-way
acquisition for the power sites and stringing
sections. The whole project will be completed
by June 2010.
The General Santos-Tacurong 138 kV
transmission line project will straddle the
provinces of South Cotabato and Sultan Kudarat
and cost P1.09 billion. This project, which will
be implemented by the National Transmission
Co., is under bidding. The government has
spent P1 million to initiate the development
of Jatropha nurseries in Bukidnon. This shall
help promote biofuels as an alternative energy
source. Right now, the Philippine National Oil
Co.’s Alternative Fuels Corp. is conducting a
technical and economic evaluation of the Zubiri
Group’s proposal to assess the feasibility of
establishing nurseries in Bukidnon.
In Gen. Santos City, P1.5 million has been
spent on Jatropha nurseries. One (1) production
sit in Brgy. Calumpang is in operation
while negotiations for site acquisition and
development are under evaluation by PNOC-
AFC.
The 2008 PBD Yearbook I 43
12/22/08 5:26:32 PM
 The list of projects indeed shows that Zamboanga peninsula accelerated 5.2
The plans for the “construction is crisscrossing Mindanao,” percentage points from almost zero in 2006.
as Arroyo claimed in 2007. Investors and Davao’s per capital GRDP went up to 5% in
Mindanao super region businessmen are hoping all these road networks, 2007 from 2.6% in 2006. ARMM and Northern
are anchored on the airports and seaports will make it easier and Mindanao rose to 2.9% from 1.3% and 5.7%
creation of five major cheaper for the country’s “food bowl” to truly from 4.7% respectively. Socksargen was
supply even Luzon with much-needed produce sluggish, however, and grew 4.4% in 2007,
growth centers that at cheaper rates. hardly budging from 4.2% in the previous year.
would turn central and
As it is, shipping pineapples and other produce “If we can harness the forces of good in
northern provinces into to Hong Kong is cheaper than Metro Manila. our nation, the positive force at work here at
a major transshipment home and those from abroad such as the US,
More importantly, these developments are Malaysia, the OIC and others, we shall prevail
hub; western and hoped to bring a sense of inclusion among in Mindanao with a peace agreement that brings
northern provinces Filipinos living in Mindanao, and put an end to freedom and hope to all Filipinos.
into a fishery and the peace and order problem that has been the
bane of the super region. With this peace, we would reap dividends
mariculture center; the in resources invested in agribusiness, not
northern and eastern Official figures from the National Statistical aggression, to build up, not tear down, the
Coordination Board give hints that these Philippine south,” Arroyo said in 2006.
provinces into an agro- projects are bearing fruit.
forestry and mineral A dream that many, even those who are not the
center; the center The Mindanao super region grew 5.1% in 2007, administration’s allies, also wish will happen
with all the regions of Mondanao registering for the Mindanao super region, proving that the
provinces into an agri- increases in per capita gross regional domestic master plan is indeed more than a “gimmick”
industrial core and the product, with Caraga turning in the best but more of a blueprint for development.
performance. – Ma. Salve Duplito
eastern southwestern
provinces, including
Davao, into an urban
and agri-industrial
center. Businessmen
come in all shapes
and sizes, but they
agree on one thing.
Mindanao’s typhoon-
free land is best suited
for agribusiness. The
land and seas are
ripe with potential;
there are no doubts
about that. It’s just
that the government
and investors have to
fight a different kind
of cyclone that has
ravaged this super
region for years, and
that is poverty and
unrest.

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 The 2008 PBD Yearbook I 49

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

 The
bright
lights of
the ‘Cyber
Corridor’
IN NOVEMBER 2008, President Gloria
Macapagal-Arroyo inaugurated the UP-Ayala
Land Techno Hub on Commonwealth Ave. in
Diliman, Quezon City, a 20-hectare affair that
already has modern-looking structures, two
of which has HSBC and IBM prominently
displayed on one side.
The techno-hub, Arroyo says, is the
Philippines’ version of US’ Silicon Valley
and would be the country’s foremost IT
laboratory, training ground and incubator.
Arroyo, with Ayala Land president and chief
executive officer Jaime Ayala and University
of the Philippines president Emerlinda Roman
“pressed the button” instead of cut ribbons
to signal the official launching and start of
operations of the techno hubs.
The area, once home to Ferris wheels and
other rides especially during Christmastime, is
expected to significantly fuel the information
and communication technology (ICT) sector’s
already-bristling growth. The ICT sector
brought in more than $5 billion revenues for
the economy in 2007, almost one third of
what the government collected in taxes for
that year and is already a major source of
foreign exchange for the economy. The Arroyo
administration hopes the industry will bring in
$6.8 billion in 2008 and that by 2010 the figure
would reach $13 billion.
At the ground level, the industry has become
a savior for many Filipinos, including Analy
Pinaroc, 34, who needed a job to supplement
the family income and send her three children
to better schools. Analy has never been to
the United States, but her English is clear
and immaculate. It was good enough for her
supervisor, who promoted Analy this month.
Then there’s Marx Vergel Melencio, an
owner of a small company who rakes in
The 2008 PBD Yearbook I 50
DBP Yearbook Inside Rev3 (Final)50 50
around $8,000 monthly in revenues from his
BPO business. He’s blind. He discontinued
his studies in UP Diliman after an unknown
gunman shot him in the head and in the chest,
hit an optic nerve and rendered him blind.
However, he continued studying at the UP
Open University to learn all about computers
and discovered that with the Jaws screen
reader, he could do what anyone could, or even
better.
The vision
From the point of view of policy makers in
Malacanang, this is welcome proof that the
creation of a CyberCorridor Super Region
in 2006, straddling all the major Philippine
islands, was an idea way ahead of its time.
Back then, the vision was to create an ICT
channel—a virtual highway—running over
600 miles across the country, from Baguio
City in the North and Zamboanga down south
of the archipelago.
“Supported by a $10-billion high bandwidth
fiber back-bone and digital network, the
CyberCorridor is home to numerous cyber
service providers that supply expert services
in various fields of ICT like BPO, contact
centers, animation, medical and legal
transcription, software development, e-
learning, e-entertainment and gaming, and
other back office operations (e.g. finance and
accounting, human resource development,
etc.),” a brochure on the super region says.
UP-Ayala Land Techno Hub
For these businesses to flourish, the
government has said it would sharpen
education, training services and career
advocacy in the areas of IT network and
project management finance and accounting,
engineering and other related services. It
would invest P66 billion in the super region,
a princely sum, but something the Arroyo
administration hopes would create jobs for
the country’s growing labor force. From more
than 343,000 employed in the industry in
2007, the National Economic Development
Authority (NEDA) projects that more than
900,000 will be employed in the industry by
2010.
“I had coffee with some call center agents last
Labor Day. Lyn, a new college graduate, told
me, ‘Now I don’t have to leave the country in
order for me to help my family. Thank you.’ I
was so touched, Lyn, by your comments. With
these structural reforms, we not only found
jobs, but kept families intact,” Arroyo said
during her 2006 State of the Nation Address
before the 13th Congress.
Many others are making decent careers and
earning sizable incomes in the industry,
especially those who are reaping the gains
from the industry’s shift into knowledge
process outsourcing (KPO). The Philippines
is known for its highly intelligent workforce,
and KPO offers just the right opportunities
for managers who used to look for jobs
abroad to work at home and earn more
money.
12/22/08 5:26:47 PM
 KPO offers services higher up in the value
chain like financial capability assessment
for mortgage companies, enterprise resource
planning, process mapping engineering,
financial markets, process control, animation
and simulation (think Disney and gaming),
automotive and aerospace design and
development, writing and content development,
and international financial reporting systems,
for example—and can thus charge clients
higher fees. These are not just data entry
jobs; these are lots of think work for hotshot
Filipino MBA holders, software engineers,
accountants, management engineering experts,
and mathematicians.
John Clements International Consultants
says in an article that the country serves as a
fertile ground for KPO firms that deal with
engineering design, financial consulting, and
medical content and services.
“Projections for industry growth for BPOs
is estimated to reach up to US$ 20 billion by
2010, compared to US$ 12 billion for KPO,”
it says.
According to the Professional Regulation
Commission, the Philippines has over two
million licensed professionals in 2006. Of
this number, more than 100,000 are certified
public accountants, over 120,000 are midwives,
there are over 26,000 electrical engineers,
electrical and communications engineers,
as well as chemical engineers number up to
more than 22,000 each, there are over 16,000
architects, medical technologists number up to
over 40,000, while there are more than 95,000
licensed physicians and over 40,000 dentists.
Official government figures also show that
the Philippines has a skilled labor force of
29 million people. There are 350,000 tertiary
level graduates every year and 36,000 of
these graduate from ICT-related degree
programs like computer science. Around
100,000 receive degrees in commerce or
business administration. The META Research
Group has ranked the Philippines eighth
among knowledge workers from 47 countries
back in 2000. Rubin Report also ranked
the Philippines number one producer of
knowledge workers.
Another thing that makes the Philippines a hot
outsourcing destination: Filipinos are more
attuned to Western culture than most Asians.
Few in this country appreciate a touchdown but
most understand what a three-point shot can do
to a basketball game in the last three minutes.
DBP Yearbook Inside Rev3 (Final)51 51
This distinctly American culture has made
the call center business and the ICT sector as
a whole the fastest growing industry in the
Philippines in recent years. According to AT
Kearney, a top Netherland-based consulting
firm, the Cyber Corridor ranks eighth in the
2007 survey of preferred ICT destinations in the
world.
The plan
For the government, the direction appears to
be well-lighted and clear: the Philippines is
already a favored offshoring and outsourcing
destination, so the Cyber Corridor Super Region
should spur more of this growth through more
investments in infrastructure, education and
training.
In the Arroyo administration’s Medium Term
Philippine Investment Program (MTPIP), the
government identified the following projects
for the Cyber Corridor: government broadband
network budgeted at P5.1 billion (this has been
scuttled due to allegations of graft), the ICT
education and distance learning at P11.1 billion,
the public access and postal program at P3.5
billion, the disaster prevention and Preparedness
at P3 billion, the government mass media
and broadcast services at P4 billion, and the
technical assistance projects at P221 million.
Because of the increasing demand for
knowledge workers, CICT chair and Cyber
Corridor super region development champion
Ramon Sales is pushing for a better education
system. At present, there are some fears in the
industry it will soon run out of talent, and this
is exacerbated by poorer and outdated curricula
even in top schools in Metro Manila.
The answer: the National English Proficiency
Program being implemented by the Department
of Education and the Commission on Higher
Education, the distance learning program to
be implemented by the DepEd; and training
for work scholarship project implemented by
TESDA.
When it comes to setting up capital-intensive
infrastructure, government encourages
partnerships with the private sector and
persuades local government units to also pick up
the tab when necessary.
In May 2007, for example, the ICT sector got a
boost from a 20,000 Asian American Gateway
(AAG) fiber optic cable network in Bauang, La
Union in Northern Luzon, providing a boost to
the Cyber Corridor dream.
The AAG project will link Malaysia to the
US via Singapore, Thailand, Brunei, Vietnam,
Hong Kong, the Philippines, Guam, Hawaii
and the US West Coast through an undersea
cable system that is not easily disrupted by
national disasters. The network is owned by
a consortium that includes the government of
Brunei, Telstar of Australia, AT & T of the US,
Bharti of India, CAT of Thailand, PLDT of the
Philippines, PT Telekom of Indonesia, Telekom
of Malaysia, StarHub of Singapore, and VNPT
of Vietnam.
“The award-winning communications system
will support the rapidly growing business
process outsourcing and call centers industry in
the country and strengthen its bid as the most
favorable investment destination for BPOs and
call centers,” President Arroyo said during the
launching for the facility.
For Arroyo’s Metro-Manila-is-not-the-
Philippines pronouncement to actually happen,
infrastructure and investments must be spread
across the regions. The CICT has been trying to
do this through three projects: the PC ng Bayan
program (which provides cheap computers
using open source software), the Community
e-Center Project and the National Broadband
Deployment Plan. The last one has been
scuttled due to allegations of corruption.
Under the Community e-Center Program, the
CICT began in 2006 the Internet in Schools
(iSchools) projects to wire schools, empower
teachers so that they know how to use these
computers for a better classroom experience for
students (ICT literacy/competency training for
teachers, lab management, sustainability), tech
support, and monitoring and evaluation. So far,
there are 1,671 high schools with connectivity,
spread out all over the country.
There are eCare Centers (target is to have
one per region) specially designed to provide
access and training programs for persons with
disabilities (PWDs).
Then there’s the eLGU CeCs to enable local
government units to deliver services more
efficiently, while providing their respective
constituents with access to the Internet and
other ICTs. The project also recognizes
model websites and best practices in the local
government to encourage replication of useful
and innovative applications.
The CICT also hopes that regional ICT
Centers will spur regional development
through the use ICT in education, commerce
The 2008 PBD Yearbook I 51
12/22/08 5:26:49 PM
 and governance and spearhead the building can allow their backroom operations in
of local e-marketplaces or one-stop-shops for the Philippines to answer calls from their
e-commerce, e-learning and e-government customers at a quarter of the cost. AOL is a
services. major example.
Accounting, data entry and payrolls of
companies in the US were done by staff in
The ICT sector Quezon City. In 2003, Forrester Research, a
technology research company in Cambridge,
brought in more Massachusets, predicted that by 2017, 3.3
million back-office jobs in the US will migrate
than $5 billion to other countries, including China and Russia.
The Philippines is widely expected to get
revenues for bigger, and bigger slices of that pie.
the economy
Companies outside Metro Manila have
in 2007, almost discovered that the industry is like a gold mine.
Davao, Metro Cebu, Subic, Bacolod, Clark in
one third of what Pampanga, among others, had been abuzz with
the golden opportunities. Arroyo has just given
the government a directive to Sales to create an ICT hub in
every province, enabling it to house at least one
collected in taxes call center.
for that year “We need to wire the entire country to
attract more BPO and hardcore technology
and is already a companies, and help train young Filipinos
into world class workers in programming,
major source of embedded technologies and network
engineering,” she said in a speech at the UP-
foreign exchange Ayala Techno Hub.
for the economy. Even real estate companies have been getting
in on the action. They are capitalizing on
The Arroyo the ICT boom by building structures that
are uniquely designed for ICT firms. Cyber
administration parks have sprouted all over the country,
hopes the
with many aspiring for tax incentives
from the government—and getting them.
industry will bring Telecommunications companies like ePLDT
found a growing demand for broadband. As
in $6.8 billion in a result, mother company PLDT’s stock rose
from P300 to more than P3,000 per share at the
2008 and that, by beginning of 2008.
2010, the figure Then the US economy collapsed dragging the
rest of the world with it and created a cloud of
would reach $13 fear that choked everyone, especially those in
the richer parts of the globe. At a time when the
billion. world’s biggest countries are in recession, can
the Philippines’ CyberCorridor super region
continue expanding as it had in recent years?
There are more positive thinkers than
Global crisis naysayers. American companies who are not
in the brink of shutting down are desperate for
Since Arroyo’s nationwide address in 2006, ways to cut costs—now more than ever—and
it looked like the happy days will never end. these will turn to countries like the Philippines,
American and European companies have BPO executives, the government and foreign
discovered that cutting edge connectivity analysts say.
The 2008 PBD Yearbook I 52
DBP Yearbook Inside Rev3 (Final)52 52
A recent survey by the Business Process
Association of the Philippines (BPAP) and
Outsource2Philippins (O2P) and managed
by strategic marketing communications firm
TeamAsia, shows that 65% of respondents
felt that 2009 prospects were “excellent to
outstanding” given the shift in the industry to
higher-value services.
BPAP expects to grow 35% to 40% this year,
and 40% annually until 2010, to employ around
one million people from 300,000 at present.
There are some early signs that this optimism is
not just a sick man’s last grasp for hope. StarTek
based in Denver, Colorado, is expanding
its workforce in its first facility in Makati
City to provide customer care, sales support,
complex order processing, accounts receivable
management, among others. It operates 21
facilities in North America and the Philippines.
Major player Oracle says the financial crisis
will force US firms to keep their best talents
and find out how to maximize their employees
well, a trend that augers well for human
resource software programmed in places like
the Philippines. Citigroup, which has been
bailed out by the US government, says it
will expand its workforce in the Philippines,
picking the country as its hub for its BPO
operations.
Convergys will be opening and staffing five
new facilities. The first facility, Cebu Asiatown
i3, was opened in September. Two more sites
are scheduled for opening in December—UP
Science Ayala Park and Nuvali in Laguna. In
April 2009, the Glorietta 5 facility in Makati
and San Lazaro in Manila would likewise be
opened. That will make 15 facilities from just
one in 2003.
London-based outsourcing firm Logica has
said in early November that it would double
its workers by end-2008 from 400 to 800.
Curiously, Logica is currently in a restructuring
mode and is depending on its operations in
the Philippines to cut down its costs. Logica
provides software support for SAP customers
in Europe.
The Bank of New York Mellon, a global leader
in asset management and securities servicing,
in fact believes it’s the country’s BPO/KPO
industry that will help the country weather the
global financial crisis, mirroring the BPAP’s
sentiment that the BPO sector is “one of the
few bright lights amid the gloom and doom of
the global financial crisis.”
12/22/08 5:26:50 PM
 The picture, of course, is not totally peaches
and cream. Major call center firm Advanced
Contact Solutions reportedly retrenched 900
workers in October 2008. eTelecare, another
big contact center, has reported a 17% drop in
its net income as of September 30.
An investors guide
Investors who want to position themselves
for growth in the ICT sector despite the
global crunch have five mature sites in the
Philippines to choose from, namely Metro
Manila, Metro Cebu, Clark, Pampanga, Baguio
City and Metro Davao. There are 21 locations
with existing strategic ICT plans already and
the CICT is schedule to conduct scorecard
exercises for 10 more.
The scorecard currently used by the CICT is
a highly detailed and intricate scoring system
developed by the McKinsey group. It provides
prospective investors and businesses with a
highly measurable list of attributes so they
can make an informed decision on where they
should bring their business.
Prospective investors would be interested
to note that score cards use metrics such
as workforce development, presence of
telecommunications facilities, real estate
development, vendor support, local
government unit and community support,
sustained power supply, tax incentives, peace
and order, and transportation, among others to
help locators or investors determine where they
want to bring their business. The first part is on
human capital development and potential as a
supplier and the second part on infrastructure
and potential as a location.
To determine whether investors would have
access to a sufficient talent pool, the scorecard
measures workforce development by assessing
the number of top colleges and universities
in the area, the presence of bridge program
providers, whether major fields of study are IT-
related, accounting, nursing or physical therapy
degrees, whether graduates prefer to work in
the area and whether special programs that help
graduates to speak English flawlessly and give
them the financial support to do all these things
are offered.
Telecommunications infrastructure is the
lifeblood of ICT firms, and the scorecard
measures the number of telecommunication
providers in the city, fiber-optic capabilities,
bandwidth and whether there is still room for
new entrants.
DBP Yearbook Inside Rev3 (Final)53 53
New investors also need buildings suitable to
their operational requirements. The scorecard
measures the number of existing and planned
IT parks or buildings, availability of IT-ready
buildings, three-star hotels or better, and long-
term accommodations for principals. (You
don’t want your American counterpart to be
sleeping in a hovel).
Vendor support that service
telecommunications, hardware and software
requirements are also included in the scorecard,
and even the time needed to get a qualified
engineer for on-site support is scored (can he
be reached within four hours? for example)
They say it takes a village to raise a child.
In the ICT sector, it takes multi-stakeholder
support to have a cyberpark up and running.
The scorecard puts much weight on whether
the mayor to the governor to the local
chamber of commerce is on-board. Having an
investment promotion body and even non-
government organizations providing support to
the industry are also plus factors.
Most ICT businesses continuously consume
power 24x7 after launching day, just like any
7-11 store. Thus, the cost of power, guarantee
of no brownouts, quality and availability of
sustainable energy sources are rated highly in
the scorecard. This is also true when it comes
to availability of transportation for cyber
services workers, number of flights per day,
and international flights to the area.
In keeping with the move to rationalize
fiscal incentives, the Philippine government
maintains that quality of labor and
infrastructure pull in investors more forcefully
than tax incentives. But for companies that
can ensure transfer of technology and locate
in areas outside Metro Manila, the Arroyo
administration offers tax incentives. These are
also part of the scorecard.
Quality of life, in the scorecard, is measured by
assessing peace and order, traffic congestion,
recreational amenities, air pollution, health care
facilities fit for expatriate communities.
Excluding Metro Manila, there are currently 24
“Next Wave Cities” established as part of the
Philippine Cyber Corridor.
Out of these 24 cities, 17 currently host
major offshoring and outsourcing operations,
namely Bacolod, Bacoor, Baguio, Batangas,
Cabanatuan, Cagayan de Oro, Cainta,
Camarines Sur Province, Cebu, Clark/Angeles,
Davao, Dumaguete, Iloilo, Legazpi, Lipa,
San Fernando in Pampanga, and Sta. Rosa in
Laguna.
All these have passed the scorecard. More
cities are in the process of being scored.
After accomplishing the scorecard, cities and
local governments are required to:
1. Conduct initial educational or priming
activities;
2. Conduct a multi-stakeholder SWOT
analysis workshop;
3. Accomplish cyber services corridor
scorecard which assesses key parameters;
4. Have a strategic planning workshop
with CICT or Department of Trade and
Industry officials to develop targets, action
plans and roles;
5. Implement their plan and evaluate their
progress periodically and modify them if
needed
6. For the CICT and DTI to present the status
of the new location to the ICT industry.
Challenges
With the lofty goals and vision of empowering
the Philippines through the ICT sector, the
government’s work is cut out for it, and the job
doesn’t look like child’s play. Even after years
of continuous growth, the ICT sector still has a
long to-do list.
The demand for knowledge workers has
far outpaced supply. More and more ICT
companies are finding it difficult to look for
qualified ICT workers, and the headhunting
business has become highly competitive.
Telecommunications and transportation
infrastructure are still experiencing hiccups
especially when there is high traffic of
information going through the wires.
More IT Parks and office facilities are still
needed, power in some regions are still
expensive, red tape is a continuous headache
for companies looking to set up their
businesses and in some areas, especially in
Mindanao, there is a problem with insurgency
and crime rates.
Yet as they say, the proof of the pudding is in
the eating. Big players are confident that the
crisis notwithstanding, the Philippines will
continue to attract offshoring and outsourcing
companies looking to cut costs, and the Cyber
Corridor, is poised for more growth.
The 2008 PBD Yearbook I 53
12/22/08 5:26:51 PM

Staving off Starvation
and Instability
Three dollars a day won’t get you far at
today’s food prices. If you live in the United
States, it isn’t even enough for a gallon of
gasoline. But that’s what ordinary people in
Haiti make daily.
So when food prices steadily went up by at
least 40% beginning in 2007, it didn’t take
much to connect the dots and predict where the
situation was heading.
After all, when inflation goes up and incomes
remain stagnant, something’s got to give way.
The 2008 PBD Yearbook I 54
DBP Yearbook Inside Rev3 (Final)54 54
The Rice Crisis
By Norman Sison
Finally in April earlier this year, like a pot of
rice steaming on the stove, simmering anger
at rising food prices reached boiling point.
Haitians took the streets and demanded swift
government action, setting up roadblocks,
looting stores, burning tires, battling with
police and troops, and attacked the presidential
palace.
Not long after Haiti, similar protests or
street demonstrations flared in Burkina Faso,
Cameroon, Cote D’Ivoire, Egypt, Indonesia,
Mozambique, Uzbekistan and Yemen.
Rice field
Even in reasonably prosperous Malaysia, the
ruling coalition was nearly ousted by voters
concerned over soaring food and fuel prices.
In Thailand, which is the world’s largest rice
exporter, supermarkets placed signs limiting
the amount of rice that shoppers were allowed
to purchase.
The riots in Haiti and elsewhere were a clear
lesson that government leaders in other
countries—especially in developing countries
like the Philippines—understood only too
well.
12/22/08 5:26:52 PM
 At least 70% of the nation live below the
poverty line, with poor Filipinos living on a
dollar or two a day.
Based on a poll of 1,200 household heads
across the country conducted last June 27-30
by Social Weather Stations, about 2.9 million
Filipino families or 16.3% had no food on the
table at least once in the past three months
due to soaring food prices, up from 15.7% in
March and higher than the 10-year average
hunger rate of 12.1 percent.
Politics of food
Jeffrey Sachs, an economist and special adviser
to United Nations Secretary General Ban
Ki-moon, said soaring food prices worldwide
is the “worst crisis of its kind in more than 30
years.”
President Elías Antonio Saca of El Salvador
called it a “perfect storm” at a meeting of the
World Economic Forum in Cancún, Mexico.
Sachs predicted “more political fallout to
come” unless the situation eased soon enough.
Fearing protests, Indonesia revised its 2008
budget and increased the amount to be spent
on food subsidies by about $280 million.
In the Philippines, the Arroyo administration
contracted rice imports in advance, spending
almost P59 billion. President Arroyo phoned
Vietnamese Prime Minister Nguyen Tan Dung
herself to purchase 1.5 million tons of rice.
The Philippine move was the result of two
factors. One, Thailand, which produces 10
million more tons of rice than it consumes,
moved to limit its rice exports. Two, Thailand
and other rice exporting countries briefly
toyed with the idea of forming a cartel similar
to the Organization of Petroleum Exporting
Countries, raising the possibility of even higher
food prices.
In early April, the national government hosted
a conference at the Clark Special Economic
Zone in Angeles City, Pampanga, and unveiled
a P36.5-billion agriculture program to counter
the looming food crisis. This was on top of the
P5 billion in subsidies set aside for farmers and
an additional budget of almost P3 billion given
to the Department of Agriculture and meant for
boosting rice and corn production.
“We must work harder to grow and breed
what we need,” Arroyo told delegates. “We
are going to cluster our food production drive
DBP Yearbook Inside Rev3 (Final)55 55
in six assistance packages, which are the
essential ingredients in making food abundant,
accessible, and affordable.”
In line with the Filipino penchant for
shortcutting names with acronyms, the
program, dubbed FIELDS (short for fertilizer,
irrigation and infrastructure, education and
extension, loans, dryers and other post-
production facilities, and seeds and other
genetic materials), hopes to solve the country’s
perennial rice shortage once and for all.
Of the P36.6 billion set aside for the new
agriculture program, P500 million would go
to organic fertilizer production, P12 billion
for irrigation and infrastructure, P2 billion for
research and development, and P3 billion for
educating and training. At least P2 billion will
go to building rice and corn processing centers
and P8 billion for procuring seeds. Almost half
of the funding, P15 billion, will be earmarked
for loans, benefiting at least 200,000 farmers.
Leadership failure
Driving north from Manila on the way to the
Ilocos region or vice versa, the rice fields
are ripe for harvest. To avoid being slowed
down in bustling Urdaneta City, Pangasinan,
motorists can detour by taking a two-lane
cement road that leads to Asingan. But because
of the lack of drying facilities, farmers use one
lane of the road during harvest time to dry their
golden brown palay.
However, the practice forces irate drivers
to carefully move to the shoulder to avoid
collisions and avoid falling into the paddies
as well or to just drive over the grain and get
back on the lane after an oncoming vehicle has
passed.
The lack of agricultural facilities is one of
several factors that Rolando Dy blames for
the rising price of rice. This is a result of
decades of “under-investment in agriculture
and infrastructure,” says Rolando Dy, dean of
the University of Asia and the Pacific’s School
of Management and concurrent executive
director of the university’s Center for Food and
Agribusiness.
In her State of the Nation Address in July,
President Arroyo said domestic rice production
had been growing by an average of four
percent annually since 2002. She took care to
point out that the figure was growing faster
than the country’s annual population growth
rate, currently at two percent.
However, the Philippines needs to import
at least two million metric tons annually to
maintain a two-month stock as a buffer against
shortage. So if there is no shortage, why is
an agricultural country like the Philippines,
once a rice exporter in the 1970s and home to
the International Rice Research Institute, the
world’s top rice importer?
Dy’s estimates, based on figures from the
National Food Authority, pegs Philippine rice
consumption from 122 kilos per person in 2002
to 134 kilos today.
But Dy emphasizes that the biggest factor,
which other experts are also pointing out, is
the inability of more and more people to afford
the staple. He says the situation is “really an
income crisis” rather than a simple supply-
demand problem.
“The primary reason is the low purchasing
power of the masses,” Dy outlined in a paper
issued in March, caused by the government’s
failure to reduce the wrenching poverty in the
country.
With the cost of fertilizer also going up, it
seems unlikely for the prices of rice and other
farm produce to go down in the near future. Dy
said the huge demand for fertilizer in Brazil,
due to its hard push into the production of
biofuels, is pushing fertilizer prices up. “The
days of cheap fertilizer are gone,” he says. “It
will be difficult to establish food security if
farmers don’t have enough access to fertilizer.”
Adding to the problem, the Philippines suffers
from a lack of large land areas suitable for rice
paddies like the Mekong delta in Vietnam.
This problem could be offset if government
improves productivity by investing in
agriculture and support infrastructure like
irrigation, roads and research and development.
Dy also blamed chronic corruption, which had
resulted in substandard farm roads and lack of
agriculture infrastructure.
Folly of complacency
The Philippine government isn’t alone in its
shortsightedness.
In the 1960s, population growth outpaced food
supply in Asia, raising the threat of starvation
in poor countries. Wealthy nations stepped
in and poured billions of dollars into crop
research to improve yields and to avoid a
looming hunger crisis.
The 2008 PBD Yearbook I 55
12/22/08 5:26:53 PM
 By the next decade, the resulting food self-
sufficiency eventually became known as the
Green Revolution and the threat of starvation
faded by the 1980s.
So did most funding for crop research from
wealthy nations in the 1990s. That included
money for the International Rice Research
Institute (IRRI), one of 14 institutes in a global
network of research centers left as a legacy
of the Green Revolution. Known collectively
as the Consultative Group on International
Agricultural Research, the centers focus on
improving crop yields and food production in
developing countries.
“Rice prices declined steadily in the 1990s,
leading many governments to believe that
the supply of food was plentiful. Lower
prices were taken for granted, leading to
complacency in agricultural research and
development,” according to a 12-page paper
issued earlier this year by the IRRI, based
in Los Baños, Laguna, to explain what’s
happening around the world.
Then came a host of other factors, both short-
and long-term, that eventually orchestrated
a worldwide crisis by the turn of the
millennium: growing population, declining
crop yields, lack of areas for farm expansion,
failure to develop agriculture, skyrocketing
crude oil prices, extreme weather believed to
be caused by global warming, and recurring
pest outbreaks.
As in the 1960s, the foremost factor is, again,
rising population. “The poorest of the world’s
poor are the 1.1 billion people with income of
less than a dollar a day.
Around 700 million— almost two-thirds—of
these people live in rice-growing countries
of Asia. Rice, the dominant staple in Asia,
accounts for more than 40% of the calorie
consumption of most Asians,” according to the
IRRI.
“Poor people spend as much as 30-40% of
their income on rice alone. Ensuring sufficient
supplies of rice that is affordable for the poor
is, thus, crucial to poverty reduction.
Given this, the current sharp increase in rice
price is a major cause for concern.”
Thanks to the Green Revolution, higher
crop yields led to lower rice prices. But the
decline ended in 2001. Prices rose and sharply
increased in the first quarter of 2008.
The 2008 PBD Yearbook I 56
DBP Yearbook Inside Rev3 (Final)56 56
In 2001, rice traded on the international
market at $300 per metric ton. These days, it’s
between $500 and $700 per ton. In January
this year, the Philippines was buying rice at
nearly $500 per ton. It has gone up by at least
40% since then.
The upward price movement during the past
seven years, according to the IRRI, indicated
that “we have been consuming more than we
have been producing.”
The higher consumption was due to growing
population in Asia. “Population growth is
outstripping production growth and this is
projected to get worse. Demand for rice in Asia
is expected to continue to rise as its population
expands.
Even after allowing for some decrease in per
capita rice consumption in Asian countries
with higher income levels, it is projected
that in 2015 Asia will need to produce 38
million more tons of rough (unmilled) rice
than it produced in 2005. Globally, demand
is increasing by around five million tons each
year. This means that in 10 years, the world
will need to produce 50 million tons more than
it does now.”
This was compounded by gradual decreasing
crop yields, which the IRRI said, has
“decreased substantially” over the past 10-15
years in most countries.
In South Asia, average yield growth decreased
from 2.14% per year in 1970-1990 to 1.40%
per year in 1990 to 2005.
“In the major rice-growing countries of Asia,
yield growth over the past five-six years has
been almost nil. Globally, yields have risen by
less than one percent per year in recent years,”
the IRRI paper stated.
The IRRI attributed the decreasing crop yields
to a number of factors.
Among them is extreme weather due to
global warming. “Global temperatures,
particularly night-time temperatures, have
steadily risen in recent decades because of
increasing greenhouse gas concentrations in the
atmosphere. Some evidence suggests that rising
temperatures may have already contributed to
lower rice yields in recent years, but a thorough
global assessment is yet to be conducted.
Further, human-induced climate change is
expected to increase the severity and frequency
of extreme weather events.”
In Australia, a six-year drought blamed on
global warming is forcing a giant rice mill to
shut down, taking off 20 million tons from the
world export market.
Another is higher crude oil prices, which
resulted in higher transportation costs,
especially for countries that import rice. It
also pushed up at least the cost of transporting
fertilizer.
“Rising oil prices and concerns about climate
change have also spurred rapid investments,
particularly in developed countries, in biofuels
such as ethanol produced from maize grain
or biodiesel produced from oilseeds. This
has increased pressure on international trade
of grains and livestock feed as well as on
agricultural land in some countries. Until
now, the direct impact of biofuels on rice
Rolando Dy, Dean of the University of Asia
and the Pacific’s School of Management.
production and rice trade has likely been small.
However, if the industry continues to grow, rice
production and prices may be affected more
seriously,” the IRRI paper warned.
With supply now threatened, major rice
exporting countries imposed export restrictions
to protect their domestic consumers and ward
off possible foot riots.
“These restrictions have further contributed
to the recent increase in rice price as the rice
supply in the world market has dwindled.
While exporters are holding on to their stock
of rice, importers are rushing into the market to
buy more rice to meet their consumption needs
and to build their own stock. Hoarding by
traders for speculative purposes has added fuel
to the fire in some countries.”
From plenty to want
Ironically, the food surpluses during the 1970s
to the 1990s eventually led to a worldwide
crisis that experts now say would need a
second Green Revolution to solve – and this
time with sustained attention.
A case in point is the International Rice
Research Institute, which saw much of its
funding disappear.
Money comes from government donations,
private grants and aid from international
development institutions.
12/22/08 5:26:54 PM

“Public spending on agricultural research
in Asia grew by an average of 3.9% per
year during the 1990s, compared with 4.3%
annually during the previous decade. In 2000,
overall public research intensity, measured by
the percentage of agricultural gross domestic
product invested in public agricultural
research, remained low at 0.53 for developing
countries as a whole,” according to the IRRI
paper.
Even if the institute gets adequate funding now,
solving the worldwide food crisis could take a
few years. Combating the brown planthopper
pest problem, for instance, could take four to
seven years, according to experts.
A brown planthopper outbreak could destroy
20% of a harvest and they are currently
multiplying by the billions throughout the
region. The IRRI could create rice varieties
resistant to the insects, which live only on rice
plants, but the institute lacks the funding. Work
on rice varieties that could prove crucial in
coping with global warming had to be dropped
as well.
“Since 2005, planthopper outbreaks have
affected several million hectares of rice land in
countries such as Vietnam, China, Indonesia,
DBP Yearbook Inside Rev3 (Final)57 57
Korea, and Japan, particularly in growing
seasons with abnormally higher temperatures.
In Vietnam, planthopper and virus outbreaks
were a major reason behind the government’s
decision to restrict rice exports,” according to
the IRRI paper, which also attributed the higher
seasonal temperatures to global warming.
Jacques Diouf, director general of the Food
and Agriculture Organization of the United
Nations, estimates revitalizing the world
agriculture could run up to $30 billion a year.
“The problem of food insecurity is a political
one,”’ he said during the June conference held
in Mexico, criticizing wealthy countries for
cutting funding on agricultural programs meant
to feed the world’s poor. “It is a question of
priorities in the face of the most fundamental of
human needs. And it is those choices made by
governments that determine the allocation of
resources.”
World leaders are now rushing to act. In May,
US President George W. Bush asked Congress
for $770 million to help boost agricultural
productivity in poor countries.
However, the IRRI has yet to receive the
needed financial boost. “There has been much
Planting rice
talk of increased funding, but we haven’t seen
much of it yet,” says IRRI spokesman Adam
Barclay. “We have been told that USAID
(United States Agency for International
Development) will reverse its decision to
significantly cut funding to IRRI and the
other Consultative Group on International
Agricultural Research centers. We don’t have
any figures yet, though.”
World Bank president Robert B. Zoellick
impressed on the Mexico conference that the
crisis was “man-made” catastrophe. “It does
not take complex research. We know what has
to be done,” he said in his prepared speech.
“We just need action and resources in real
time.”
Earlier this year, the Asian Development
Bank pledged to support the IRRI and other
institutions in efforts to boost productivity.
Haruhiko Kuroda, president of the ADB,
blames the food price surge on several “short-
term cyclical and long-term structural factors”
outlined by the IRRI.
He also attributed part of the blame on Asia’s
developing economies, saying that improving
incomes have resulted in more and more people
The 2008 PBD Yearbook I 57
12/22/08 5:26:56 PM
 eating meat, which, in turn, are pushing the
price of food and feed grain.
Based on
“Looking at the supply-demand dynamics,
figures from we believe that the era of cheap food is over,”
Kuroda wrote in a May opinion-editorial to
the National the Wall Street Journal, warning that over
a billion people in Asia alone are “seriously
Food Authority, affected” by the surging food prices.
Philippine rice The ADB estimates that up to 60% of average
incomes goes to food; up to 75% if you include
the cost of energy such as gasoline, which is
consumption partly pushing food prices up.
has increased For the short-term, Kuroda believes that
“targeted income- and cash-support measures
from 122 kilos are more effective” in helping the poor cope
with the situation.
per person in “Through targeted support to the poor rather
2002 to 134 than general price subsidies, governments will
be able to focus on the truly needy and ensure
kilos today. But better coverage, as well as free up resources
to boost much-needed investment in the farm
sector,” he wrote in the Journal.
University of
Even those living just above the poverty line
Asia and the may not be spared.
Pacific’s School An increase of 30% in food prices would
increase the number of poor by an additional
of Management nine million in the Philippines alone.
dean Rolando If food prices continue to rise beyond the reach
of the poor, Kuroda says, the situation could
Dy emphasizes erase gains made in the past years to ease much
of the wrenching poverty in Asia by 2015 as
set by the United Nations in its Millennium
that since more Development Goals.
and more people In a paper issued in July, the ADB announced
that its short-term response would be to
are unable to strengthen “targeted safety nets” aimed at
helping the poor such as cash transfers, food-
afford the staple, for-work, food stamps and school feeding
programs.
it is more than Already, the ADB has sent missions to several
income crisis Asian countries seeking assistance to map
out measures in collaboration with other
development institutions such as the World
rather than Bank and the International Monetary Fund and
the Food and Agriculture Organization of the
a simple supply- United Nations.
demand problem. The ADB will provide up to $500 million to
finance its short-term support for the hardest-
hit countries.
The 2008 PBD Yearbook I 58
DBP Yearbook Inside Rev3 (Final)58 58
For the medium and long term, the ADB will
provide funding for vital infrastructure—rural
roads and bridges, rural electricity, irrigation,
among others— to boost agricultural
productivity.
Gauging from its current project pipelines, the
ADB estimates that up to $4.7 billion would
need to be invested in agriculture across Asia in
the next two years.
Over 70% is expected to go to financing rural
infrastructure development. Kuroda expects
at least $2 billion to be spent on boosting
agriculture in 2009 alone.
The IRRI estimates that the world would need
to produce an additional 50 million tons of
rice annually, or nine percent over current
production, to meet projected demand. Asia
alone is expected to account for 58% of rice
consumption.
“The best strategy for keeping the price of rice
low is to ensure that production increases faster
than demand,” the IRRI stated in its paper.
“To achieve this, a second Green Revolution
is needed now as much as the first Green
Revolution was needed to avoid famine and
mass starvation.”
However, with land being continuously lost
to urbanization, industrialization and biofuel
production, among other things, the IRRI
doubts that Asia’s rice areas could be expanded
from the current 136 million hectares to meet
future demand.
“The main source of additional production will,
therefore, have to be yield growth.” Global
average rice yields must continue to increase
by an annual rate of at least 50 kilos per hectare
or 12% above current levels to keep pace with
the demand.
In its paper, the IRRI outlined a list of
short and long-term measures: investing
in agricultural research and infrastructure,
develop a new generation of rice scientists
and researchers, strengthening safety nets for
the poor, accelerating use of higher-yielding
rice varieties, and changes in government
policies.
Nations “must invest now” in agriculture, the
institute warned, to avert a worldwide crisis.
“Rice production can be revitalized, but there
are no silver bullets.”
12/22/08 5:26:57 PM
 The 2008 PBD Yearbook I 59

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

 Tourism estates rake it in
Property markets elsewhere in the world
have slumped but that of the Philippines
continue to flourish. Despite difficult times and
skyrocketing fuel costs, local developers and
buyers see the country as one of the hottest real
estate hubs in Southeast Asia to date.
“Investment opportunities in real estate,
tourism and infrastructure remain high in this
country,” stresses property services global
leader CB Richard Ellis (CBRE) Philippines
general manager Trent Frankum. “Foreign
investors are looking at the positive effects of
the stable Philippine peso, increasing tourist
arrivals, the business process outsourcing
(BPO) boom, and the positive effect of
overseas Filipino worker (OFW) dollar
remittances.”
Last year, tourist arrivals broke the two-million
mark for the first time since 2004, with arrivals
rising to 3.091 million. CBRE expects new
markets, such as Russia, Middle East, China,
and Korea, to sustain tourism growth. CBRE
also projects arrivals will increase to 3.4
million this year and generate US$5.8 billion in
international tourism receipts.
In addition, hotel room occupancy rates rose to
73.06% in 2007 from 71.95% in 2006. “New
hotel and resort developments are currently
in strategic business locations such as Makati
City, Fort Bonifacio, and the Bay Area as well
as top tourist destinations such as Cebu and
Boracay, further enhancing industry prospects,”
he points out.
The projected number of tourists arriving
in 2008 is set at more than 3.4 million, the
majority of whom will pass through the
National Capital Region, Metro Manila, and
some 30% or 1.02 million will use new direct
flights to the Mactan-Cebu International
Airport as their entry point to the Philippines.
New development projects include the US$153
million Kingdom Hotel, a combined hotel and
The 2008 PBD Yearbook I 60
DBP Yearbook Inside Rev3 (Final)60 60
By Emmie Abadilla
residential condominium rising in Makati City.
“We expect 18,143 units from 28 upcoming
residential condominiums to be completed
between 2008 and 2013. Likewise, in Fort
Bonifacio, 11,652 units will come into the
market from 33 residential condominiums
being constructed in the same period,”
Frankum says.
BPO boom
The offshoring and outsourcing (O&O)
boom in the Philippines has created further
opportunities for the real estate market,
Frankum points out. “Major investors and
businesses are looking at the Philippines
because it is one of the largest English-
speaking nations in the world and has 33.5
million Filipinos in the workforce.”
Already, major multinational BPO operators
are expanding their presence in the Philippines.
Accenture leased 1.3 million square feet.
Teletech, which has six facilities in Metro
Manila, is starting to build call centers outside
the metropolis.
In addition, major financial companies such as
HSBC, Citigroup, and JPMorgan are enlarging
the Philippine sites of their customer support
operations. Hongkong Shanghai Banking Corp.
(HSBC) currently has four locations, which
total to 859,200 square feet, and plans to open
more sites. Citigroup and JPMorgan, on the
other hand, have 214,812 and 107,400 square
feet of space leased, respectively.
“Third party BPOs are not stopping in their
expansion, with a handful such as Convergys,
IBM, Sykes, TeleTech and People Support
already securing more sites in the country,”
Frankum noted.
Other major O&O service providers continue
to develop sites in Metro Manila and Metro
Cebu. According to CBRE research, a total
of 731,871 square meters of property in
Metro Manila has been earmarked for new
O&O facilities this year, with 189,614 square
meters already pre-committed before start of
construction. “Offshoring and outsourcing
will continue to drive demand for real estate,
particularly in the office space market.”
Tourism estates
Significantly, the country’s biggest developers,
which had shied away from mega-tourist-
oriented developments for a long time, have
made the plunge and are now reaping profits.
Everyone has ventured into multi-billion peso
tourism real estate and leisure community
projects, from Ayala Land Inc. (ALI) to SM
Investments Corp., from tobacco tycoon Lucio
Tan’s Eton Properties Phils. Inc. to the state-
owned Philippine Amusement and Gaming
Corp.
The slump of property markets overseas has
not dampened the luxury property sector either.
“We even registered stronger sales in Middle
East and Asia for this year. The domestic
real estate market has been quite good. The
Philippines continues to grow 6 to 7%, so the
market is still strong and demand-driven,” ALI
president Jaime Ayala pointed out mid-year.
Increasing prices has not stood in the way of
sales either, considering that local construction
costs are shooting up by more than 35% this
year due to record price increases of oil, steel,
cement and global shipping on the back of the
devaluing American dollar.
As a result, developers have immediately
slapped at least 20% increases for pre-
construction projects and 15% price
adjustments corresponding to the rise in global
construction costs over the next six months.
Nearly all construction materials used for
building Philippine high-rise buildings are
imported. Exporters of steel reinforcement
12/22/08 5:27:01 PM
 bars, electrical wirings, aluminum, copper-
based components and Portland cement
from China, Korea, Malaysia and Taiwan are
expecting over 40-50% price increases due to
the depreciation of the US dollar combined
with record high oil prices which is constantly
pushing up shipping costs.
Nevertheless, all these will have minimal effect
on the industry in general and even less effect
on the current market base.
investors want to replace failed pension
plans and other saving schemes with solid
investments in real estate. The savvy ones
look for investments that will earn them a
monthly income for their retirement. Our hotel
rates, for example, are the same, if not more
expensive than those in the US or Europe, but
the entry level to purchase real estate is only
specialists, David Stanley Redfern Ltd., PLC’s
UK-based marketing partners, expect the
Philippines’ real estate sector will sustain at
least a 24% per annum growth for the next five
years.
Reliable OFW money
Surprisingly, many European investors have
not yet discovered the potentials of the
Philippine real estate market. But that is not

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

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

At the time, they only had a very limited

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

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

“Today’s technology, unheard of 15 to 20

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

Dubai and the UK. I even get calls from clients

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

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

 Kapitan’s
city
BEER MAGNATE LUCIO TAN has joined
the band wagon of tycoons cashing in on the
tourist estate boom via the P10 billion Eton
City, the first master-planned residential island
development in the country.
His Eton Properties Philippines, Inc. (EPPI)
broke ground last December 2007 on a 1,000-
hectare site along the South Luzon Expressway
in Sta. Rosa, Laguna to launch Eton City’s
maiden showcase, South Lake Village. It also
happened to be EPPI’s ninth project since it
became a real estate company last year.
No doubt about it, Tan is positioning the
mixed-use leisure township as the future
“Makati of the South”. To be developed over a
ten-year span, Eton City integrates residential
enclaves with world-class hotels, a business
district, and a golf course, plus a full range of
commercial and resort-style recreation facilities
found only in next generation cities on the
other side of the planet such as The Palm and
The World in Dubai, and Lake Las Vegas in
Nevada, and Foster City in San Francisco,
California, both in the United States.
In fact, Foster City serves as the main
inspiration for South Lake Village, reveals Eton
President Danilo Ignacio.
“This island, built on engineered landfill by
the bay, is very popular with Asians living in
the United States,” he says. Naturally, EPPI
believes Eton City will be just as popular in the
country.
“We have a one-of-a-kind development,
something nobody has done in the Philippines.
We offer not just lake front lots but actual
‘island lots’ and ‘island homes’,” Eton City
General Manager Alex Jazmines points out.
Centerpiece
Eton’s centerpiece, South Lake Village,
features 18 islands, each measuring a hectare
within a 35-hectare man-made lake. Eton may
even add a 19th island to cater to social events
like weddings. The lake villages, connected to
the mainland via land bridges, are slated to be
turned over to homeowners in the middle of
2009.
The 2008 PBD Yearbook I 62
DBP Yearbook Inside Rev3 (Final)62 62
Each island accommodates 8 to 12 residential
lots of three types: lake village lots about
500 to 600 square meters each, lakefront lots
measuring 600 to 800 sqm, and island lots that
span 800 to 1,200 sqm. The lots are priced
between P10,000 and P12,000 per sqm.
Together, the lake island villages will
occupy about 150 hectares and will showcase
waterfront living in the Philippines.
Homeowners here are meant to have the best of
both worlds: resort-style living with city luxury
and comfort.
The second phase of Eton City covers one
more high-end residential village while
phase three entails the development of a
central business district that houses shopping
malls, office buildings for business process
outsourcing hotels and residential condos.
Phase four includes the construction of an 18-
hole golf course and still another village.
Waterfront living
Waterfront properties and waterfront living are
hot these days.
“It’s one of the current trends in the real estate
market. In Thailand, Singapore, Australia and
the US, areas near water are considered prime
property,” confirms architect Nestor Mangio
of NS Mangio & Associates(NSM&A), Eton’s
partner.
Location map
NSM&A has designed several waterfront
development projects in Bermuda and inthe
Philippines and is now executing the master
plan of South Lake Village.
“Our studies showed lakeside communities
offer significant growth as a result of the robust
tourism market,” Ignacio says.
“Given the steadily increasing remittances from
overseas Filipino workers, the low interest rate
regime, the upsurge in foreign tourist arrivals,
and BPO requirements, we are confident the
market will be keen on Eton’s inventory
and line-up of new projects. We believe that
demand for our core business will remain
resilient.”
Green architecture
NSM&A takes care of the “green architecture”
and sustainability of Eton City. Its
environmental plan addresses concerns ranging
from lake water supply, mosquito infestation,
flooding and erosion, to conservation and
pollution.
First of all, live rivers surrounding the area
ensures ample water supply. Rainfall and
natural creeks will feed Eton’s man-made lake.
“The continuous inflow and outflow of lake
water will prevent stagnation and mosquito
breeding,” Jazmines says.
12/22/08 5:27:04 PM
 In addition, developers are seeding fish in the health and spa zone with a gym, aerobics area,
lake, fattening them on mosquito larvae before clinic and salon; and a landscape/ outdoor Zone To be developed
anglers sport with them. For good measure, for family barbeques and lake activities. The
they have also installed filtering systems and country club shares come free with South Lake over a ten-year span,
aerators. Village lots. Eton City integrates
A detention pond sifts creek water before it is Other amenities on the drawing board include residential enclaves
channelled into the lake. In addition, fountains the River Grove, a world-class championship with world-class
on the lake corridor double as aerators, golf course, a commercial strip with shopping
maintaining proper oxygen levels. Lake liners, and dining areas, high-end residential and hotels, a business
earth fill, rock layers and vegetation contain office condominium communities, a complete district, and a golf
erosion on the lakeside. To curb pollution, only central business district.
kayaks and electric boats will be allowed on course, plus a full
the waters. On top of everything, residents will enjoy range of commercial
enhanced 24-hour security with a guarded entry
“We have looked into a 50-year flood study, and exit, roving guards, security cameras and and resort-style
taking into account the highest flooding levels a road-lined perimeter that keeps the property recreation facilities
in the area,” Jazmines notes. As a result, Eton away from the edge of the development area.
City’s villages will be elevated at the same found only in next
height as the expressway, out of harm’s reach. “We are using the latest security equipment to generation cities
ensure the safety of Eton City dwellers,” the
Most important of all, Eton City is nature- developers note. on the other side of
focused. So, EPPI is leaving out 47 per cent the planet such as
of the 1,000 hectare site as open spaces, way Eton City’s strategic location makes for a final
beyond the minimum requirement of 30%, selling point. The lake community is on both The Palm and The
allowing the lush greenery to create the sides of the South Luzon Expressway, right World in Dubai and
ambiance of a tropical sanctuary. at the entrance of the existing Eton City-
Greenfield interchange so residents can easily Lake Las Vegas in
In all, the luxury lake village community will travel in and out of Metro Manila. Nevada, and Foster
have 11 kilometers of waterfront and plenty
of parks. Residents can enjoy good views of After all, Santa Rosa is a major gateway to City in San Francisco,
Laguna de Bay and Mount Maquiling, along the metropolis, a high growth hub hailed as California, both in the
with their very own lake. the next lifestyle hub minutes away from
Makati. In its own right, the area is a center for United States.
The playgrounds, tree-lined roads, linear parks commerce, not only in Laguna but also in the
along the river and lake-view corridors and entire CALABARZON.
bridges are all consistent with Eton’s green It hosts industrial estates,
plan while the man-made lake forms the heart large-scale firms and
of community sports and recreation. Residents multinational companies,
can build their own private docks, sail and fish along with commercial
on the lake or take their boats to the country centers and first-class
club. housing projects.

The lake homes typify contemporary Asian Strategic location, green

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

The luxury amenities include a 2.2-hectare

Eton City landmarks

South Lake Sports and Country Club, with a

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

The 2008 PBD Yearbook I 63

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

 From
malls
to resort
town
PROPERTY MAGNATE HENRY SY builds
resort towns as well as he builds malls. He
proves it with Hamilo Coast in Batangas.
The P7-billion project is his first foray into eco-
tourism real estates and “green development”.
And this early, his SM Investments Corp.
(SMIC) expects 2008 sales to hit P2 billion
from the 40-hectare Pico de Loro, the first
of 13 coves in his pioneering 6,000 hectare
project along the South China Sea.
Riding the country’s tourism surge and going
with the government’s strategy to position
the country as one of Asia’s leading tourist
destinations has been a well-timed move
on the tycoon’s part. “Promoting Philippine
tourism should be the task of every Filipino
because tourism allows us to compete in the
global marketplace,” SMIC chairman Henry Sy
stresses.
Needless to say, Hamilo Coast is also reviving
the economy of Batangas.
“We expect to employ as many as 70,000
people for this whole project. Most of them
will come from the local community,” SMIC
vice president for investor relations, Corazon
Guidote notes.
Hamilo Coast beachfront
The 2008 PBD Yearbook I 64
DBP Yearbook Inside Rev3 (Final)64 64
Swimming pool
The premier coastal residential and resort town
combines two sunshine industries: property
and tourism. Add to that, Hamilo Coast merges SM Investments
urban planning with environment-friendly
development. Corp. expects
Based on the master plan of Cadiz 2008 sales to hit
International, Manila and ML Design, Brisbane
Hamilo Coast will be an integrated network P2 billion from the
of coastal resort communities with a balanced
mix of residential, commercial, eco-tourism 40-hectare Pico
and leisure amenities such as sports facilities, a
full-service beach, country clubs, a golf course, de Loro, the first
forest parks, exclusive beach enclaves, marina
and yacht clubs. of 13 coves in its
The developers has conscientiously followed pioneering 6,000-
the natural terrain of the vast property, which
covers 13 natural coves, limestone cliffs, virgin hectare project
forests, natural parks, rock formations, plus 32
kilometers of coastline. along the South
In keeping with Hamilo Coast’s backdrop of China Sea.
forest and sea, the architecture of residences,
resort hotels and other buildings is modern
tropical.
But even while SMIC combines commercial
convenience and home comforts with nature
and adventure, it will see to it that the beach
and sports facilities are environmentally safe
and friendly. It will develop low-density
neighborhoods, ensuring that the building
of the residential condominiums, beach and
country clubs, retail shops, as well as a marina
and yacht club create a low impact on the
natural surroundings.
In other words, Hamilo Coast is a serious,
green development. In fact, it is the Philippines’
first community designed for ecological
sustainability with a defined environmental
program from concept, planning, design to
construction and operation.
12/22/08 5:27:07 PM

To ensure that the project will comply with
international environmental standards, SMIC
has partnered with a global conservation
organization, WWF-Philippines.
WWF advise the company on proper land
use to preserve the area’s natural ecosystem
and to sustain the needs of future generations.
They employ Coastal Resource Management
to revive the habitats of fish and other marine
creatures along the shores, measure the impact
of Hamilo Coast on the biological capacity of
Nasugbu, and stabilize the soil in the area to
keep the construction debris and run-offs from
killing the sea.
Furthermore, Hamilo Coast has commissioned
adventure specialists, Sandugo, to define eco-
friendly and safe adventure courses custom-
designed for the site’s topography. Currently,
Sandugo is designing trekking and biking trails
in the property.
DBP Yearbook Inside Rev3 (Final)65 65
Buyers’ response
Not surprisingly, buyers have snapped up
shares of the Pico de Loro Beach and Country
Club. A few months after SMIC launched the
project, 300 individual club shares have already
been purchased of the 3,200 to be floated once
the beach club is finished. Individual shares
have sold for P460,000 each while shares for
corporate buyers have fetched P850,000 each.
Likewise, the first condos offering studio-type
units have sold out fast, confirms Efren Tan,
SMIC vice president for sales.
To date, SMIC is starting work on Hamilo
Coast’s second phase, fine-tuning it based on
buyers’ response by scrapping out studio-type
pads. From this time onwards, the smallest
condominium units will be one-bedroom
affairs aimed at families eyeing vacation homes
outside Metro Manila.
Condominium exterior
Hamilo Coast
Location-wise, Hamilo Coast has the advantage
of being just two and a half hours away from
the metropolis by car and 20 minutes by
helicopter. Soon, the travel time will be cut to
just one hour by ferry from SM Bay City in
Pasay.
Future plans include linking SM Bay City
seamlessly with Hamilo Coast to allow guests
to fly to Manila and check in a hotel at SM Bay
City before they hop on to a ferry for a Hamilo
Coast eco-tourism experience.
And Hamilo Coast is just the beginning.
In the coming years, SMIC projects its tourism
estates will become an equally important
contributor to the company coffers.
“Our prospects are bright and the possibilities
are endless,” executives conclude.
– Emmie Abadilla
The 2008 PBD Yearbook I 65
12/22/08 5:27:11 PM
 Ayala’s
magic
now
extends
to resorts
A LATECOMER IN RESORT
DEVELOPMENT, Ayala Land Inc. (ALI), has
hit the jackpot with its $600-million Anvaya
Cove in near Subic Bay and is now scouting
south of Metro Manila for similar sun and sea
sites.
While most Filipinos are tightening their purse
strings, ALI sold out the P3.5- billion phase
one of its first leisure community project much
faster than expected, leaving a market still
hungry for premium space.
“The demand is very strong,” ALI president
Jaime Ayala confirms. “Anvaya Cove has done
very well. We sold out phase one, so we are
openeda new phase last August. We will also
offer complete units by fourth quarter of 2008,”
he says.
Anvaya, which means “family” in Sanskrit,
is a three-phased, 20-year eco-sensitive
development pitched as a retreat for bonding
and communing with nature. It offers activities
ranging from barbecues and spas, picnics and
camping to kayaking and golf, trekking, diving
and snorkeling. Target clients include rich
locals looking for weekend homes as well as
overseas Filipinos from America and Europe
who intend to retire in their homeland.
Phase One covers the bulk of the property, 58%
of the 320 hectares, and includes a beach club,
golf course plus 18 executive villas, worth over
P20 million each.
Since 2007, buyers have snapped up the villas,
which were sold with condominium titles to
do away with the ban on foreigners owning
property, as well as the house and lot packages.
Add to that, ALI has unloaded a total of 300
residential lots ranging in size from 367 to
1,200 square meter, priced at between P6,640
The 2008 PBD Yearbook I 66
DBP Yearbook Inside Rev3 (Final)66 66
and over P14,000 per sqm. Buyers are now
starting to build a dozen residences.
“Every year, we bring new assets. We have
sold out our beach and nature club early this
2008 and we have stopped selling shares,”
according to Ayala. “Now, we are developing
the nature camp.”
It was fast work too. In 2005, ALI partnered
with the Subic Bay Development and
Industrial Estate Corp. (Sudeco), the privately
owned real estate holding firm of businessman
Carlos De Leon’s family, and started
earthworks right away on the latter’s coastal
lands in Morong, Bataan.
The area is just 20 minutes away from
Subic Bay Freeport, a tourist hub in itself
complete with dive sites, equestrian center,
jungle environment, a survival training camp,
zoo, ocean theme park, butterfly gardens,
insectarium and aviaries, go-kart track, car
raceway, golf course, yacht club, duty-free
stores and restaurants.
And just this April, the joining of the new
Clark-Subic Tollway with North Luzon
Expressway (NLEX) made the leisure
community “the fastest accessible leisure
property in the country”, just 1.5 hours drive
from Manila.
Master plan
ALI contracted architect Leandro V. Locsin,
Jr. for Anvaya’s master plan. Fusing design,
Location map
environment, economics and planning, they
created a community “where the mountains
meet the sea” with clusters of vacation and
retirement homes, a mountain and beach club
plus a nature camp in an area that overlooks
the South China Sea in the backdrop of the
Zambales range.
Its showcase Cliffside homes, atop a 1,500 foot
promontory at the south of the site’s main cove,
comes with its own one-hectare nature park
and commands a view of the beach, the bay
and the mountains.
On the other hand, homes at Mango Grove look
out into the cove, the green valleys, the beach
club and nature camp. Around the clumps
of fruit trees, ALI built a 10,000-square-
meter park to protect over half a century-old
mangoes, narra, cupang, cashew and bamboo.
The smallest residential cluster, Wood Park,
features a natural brook and a Sunset Park.
Building around natural features, the developer
carved out rolling asphalt roads, low-impact
pedestrian, bicycle and cart paths, infinity pools
and big playgrounds. They transformed one
stream into a lake for kayaking and lined the
beachfront with restaurants and bars.
Recreational areas blended wild greenery
and rolling hills with man-made structures
like shaded foot and jogging paths lined with
benches, a multi-purpose gazebo that blends
with existing land forms and interactive
playgrounds.
12/22/08 5:27:12 PM

Anvaya follows the lay of the land, leaving as
much as 60% of the site’s natural environment
While most untouched, maintaining wide open spaces,
protecting wildlife habitats from beach
Filipinos are combers.
tightening their It has allocated sanctuaries: a nesting cove
for sea turtles plus a stretch of wetlands
purse strings, for migratory fowl, eagle owls and mallard
ducks.
Ayala Land, Inc.
The master plan includes view pavilions and
sold out the P3.5- lookout towers along with ecological trails
through the forested parks, foot paths to
billion phase one the coves and secluded beaches, “discovery
classrooms” and obstacle courses for adventure
of Anvaya Cove, seekers.
its first leisure The beach club cum nature camp have trained
coordinators to assist families in planning and
community customizing mountain and beach activities,
eco adventures, sunset cruises, romantic private
project, much picnics, spas and massage services.
faster than The club has, likewise, hired local fishermen to
serve as lifeguards, marine and forest rangers
expected and as well as guides.
left a market To light up the place without disturbing sea
turtles laying eggs or confusing hatchlings
still hungry for who are sensitive to strong lights, Anvaya has
waist-high bollards along the roadway instead
premium space. of electric posts.
No cables are in sight, with all wiring buried
underground.
DBP Yearbook Inside Rev3 (Final)67 67
Anvaya Cove Beach Club
In addition, home owners are allowed to build
on only 35% of their lots, ensuring ample
margins along their perimeters.
Residents whose homes surround My Park,
have to build without fences or keep their walls
low, if at all.
“We want people to feel relaxed and pampered
here,” the Ayala says.
Ecotourism
Originally, the locals thought the area should
host a technology park but favoured ALI’s
project when it came because Morong is best
suited for ecotourism.
“Anvaya is a better alternative because the
influx of industrial locators will destroy our
town,” they commented.
However, future homeowners at Anvaya have
to share the responsibility in caring for the
environment and protecting the coral reefs on
the bay.
Meanwhile, ALI plans to develop an Amara
resort villa community close to the Mactan
International Airport, in a 45-hectare land
fronting the sea.
For the Ayalas, building dream homes in
leisure communities has become a serious and
lucrative business.
– Emmie Abadilla
The 2008 PBD Yearbook I 67
12/22/08 5:27:13 PM
 Pagcor’s
$20B
Las Vegas
dream
NEXT YEAR, a $20-billion Las Vegas-style
casino-entertainment complex will rise on the
800-hectare reclaimed site off Manila Bay,
adjacent to the SM Mall of Asia.
The chips—and some $1.5-billion revenues
for the Philippine Amusement and Gaming
Corp. – will roll in soon after.
First called Pagcor City in 2001, the project
goes by several names: “Manila Bay Tourism
City”, “Bagong Nayong Pilipino Integrated
Tourism City”, and just plain “Tourism City”.
Whatever moniker it ends up with, the project
signals the state company’s shift from gaming
to entertainment.
“Today’s thrust is no longer casino gaming but
total entertainment,” PAGCOR chairman and
chief executive Ephraim Genuino says. “In
the global arena, only 25% of the revenues of
gaming destinations, such as Las Vegas, come
from actual gambling.”
Pagcor City models itself after The Strip, a
section of Las Vegas which hosts the majority
of the world’s largest casinos and 18 of the 25
largest hotels in the world, with a combined
capacity of over 67,000 rooms. The Strip rakes
in over $6 billion per annum.
“We are not just building casinos and bringing
in gamers. We want to bring in tourists.” says
Pagcor president Rafael Francisco. “With
Pagcor City, we can quadruple our tourist
arrivals to 10 million in five years.
We can catch up with Singapore, which recently
allowed two casinos, and Macau, Asia’s casino
capital.”
Pagcor, of course, has to rake in the cash
too, being the biggest money maker for the
government. When its property project is fully
operational, the state-run company projects to
easily triple its 2007 annual income of $500
million.
The 2008 PBD Yearbook I 68
DBP Yearbook Inside Rev3 (Final)68 68
To be completed within 7 to 10 years, the
three-phased project can, likewise, generate
200,000 new jobs for Filipinos.
Bluprint
Under the plan, the reclaimed site, easily
accessible from the Ninoy Aquino International
Airport (NAIA), seaports, as well as the
major commercial and urban centers, will
be divided into specialized areas with non-
gaming operations accounting for 65% of the
development.
Pagcor’s blueprint includes a “Tropical Area”
with white sand beaches and lagoons facing
Manila Bay, a “Winter Park” with large
ice skating rinks with real snow and skiing
facilities as well as six-star hotels, world-
class theme parks, educational and cultural
complexes.
It will also have a marina complex with walk-
through glass tunnels showcasing different
marine species in the Asia-Pacific, a fish port
and a seafood restaurant patterned after San
Francisco’s Fisherman’s Wharf, shopping
malls, a commercial district, sports stadia,
celebrity-themed restaurants, convention halls,
state-of-the-art theaters, gaming facilities,
residential villages, and a hospital district.
Boardwalks will provide public access to
promenades lined with specialty restaurants
and outdoor cafes. An almost 2,000-
foot observation tower will dominate the
landscape.
“It’s important to have attractions that ensure a
pleasant stay for casino visitors, most of whom
Pagcor’s future city
travel with their families and take side trips,”
Genuino explains.
So far, only 25% of Pagor City’s land area has
been reclaimed. The rest will be added as the
project gets underway. Of the total, only 35%
of the total property is allocated for casino
development.
In 2007, Pagcor started the first phase of
Pagcor City which consists of a resort hotel, a
theme park, and gaming centers. Covering 40
hectares and entailing an investment of about
$10 billion investments.
“Our goal is to complete Phase I in two years
and immediately proceed with the second
phase, which would involve residential
villages, a resort, more hotels and casinos,”
Genuino says.
Phase III covers a hospital district, retirement
villages, and wellness centers. Japanese
investors, in particular, want to develop a
retirement village within the reclaimed area to
cater to the rapidly expanding retiree market.
This will include a casino with a 2,500 room
hotel, an oceanarium, a giant Ferris wheel
known as the Manila Eye (after the London
Eye), an art museum displaying religious
icons, a theatre, sports arena and commercial
facilities. The casino is expected to open
around April 2010.
Investors
Foreign investors are bankrolling 90% of the
cost. Already given the nod to proceeds are
Aruze Corp.of Japan, Genting Berhad Group
12/22/08 5:27:14 PM

Groundbreaking ceremony
of Malaysia, SM Investments Corp., and
Bloombery of Australia.
The Japanese group, which is into the
manufacture of pachinko and slot machines,
has forged a partnership with Wynn Resorts,
operator of Las Vegas and Macau casinos,
to build the Okada Resort Manila Bay.
Construction starts in January 2009.
“The most important thing is to attract people
all over the world, get them to have fun and
give them a pleasant experience,” Aruze
chairman Kazuo Okada says.
For its part, the Genting group has partnered
with a local conglomerate, Alliance Global
Group Inc., which owns the McDonald’s
Philippine franchise and Megaworld Properties.
Genting’s Star Cruises Ltd., the world’s third
largest cruise operator, and AGI’s subsidiary,
Travelers International Hotel Group Inc., has
forged a joint venture to build a hotel and
casino complex.
Add to that, the Malaysian group is leasing 35-
hectares to put up a theme park.
Genting, the franchise holder of Universal
Studios theme parks in Asia, has invested S$6
billion in an integrated resort project in Sentosa
Island.
Bloombury Investments Ltd., a British Virgin
Islands firm, also plans to lease 15 hectares
in the reclaimed area and sink in at least $1
billion to build three luxury hotels for a total of
500 rooms, high-end retail shopping, celebrity-
themed dining, a showroom and museum,
DBP Yearbook Inside Rev3 (Final)69 69
along with a major entertainment and sports
center.
However, Bloombury needs to pull its act
together after negotiations for a partnership
with Crown Ltd., the entertainment and gaming
firm of Australia’s third richest man, James
Packer, fell through.
Crown declined to participate in Bloombury’s
proposal to develop an integrated casino-
entertainment complex in Manila Bay due
to the global credit crunch which pushed up
borrowing costs and made it harder to squeeze
profits from investments.
For its part, SMIC is committed to help
develop Pagcor City by investing in its own
Mall of Asia complex close by.
Recently, SMIC has contracted hotel services
provider Carlson Hotels Worldwide-Asia
Philippine Pacific to manage Regent- and Radisson-
branded hotels within the MOA.
Amusement
Earlier, it was reported that SMIC is partnering
and Gaming with Australia’s Asia Pacific Gaming to build
a world-class gaming facility close to Pagcor
Corp.’s project City. Belle Corp. has also surfaced as a
possible partner for SM’s casino project.
by the bay
But while a casino may be in the works,
is expected nothing is definite todate, according to SMIC
vice chairman Tessie Sy-Coson.
to generate
Theme park
200,000 new
On top of all these, Pagcor City plays host to
jobs and “Bagong Nayong Pilipino”, one of its biggest
locators to date.
quadruple
Nayong Pilipino is a unique, interactive,
tourist arrivals educational park featuring miniature versions
of the country’s tourist attractions.
to 10 million
It showcases Filipino cultural and historical
in five years’ heritage along with the replicas of the
archipelago’s natural and made-made
time. It will wonders.
also easily The theme park operator closed down its
old site in Pasay to pave the way for NAIA
triple Pagcor’s Terminal 3. It broke ground recently on its new
15 hectare home within Pagcor City.
2007 annual
If all goes well, this newest gaming-
income of $500 entertainment mega-complex may yet be the
local version of Las Vegas and Macau’s Cotai,
million. fulfilling the Philippine dream to be Asia’s
leisure capital.— Emmie Abadilla
The 2008 PBD Yearbook I 69
12/22/08 5:27:15 PM
 A Tale of
Boom
town
Among the cities in the country today, Taguig
stands as the most competitive city for doing
business. This is the finding of a World
Bank report entitled “ Doing Business in the
Philippines 2008. “
The WB report is part of the East Asian
subnational series, which ranks 178 economies
in terms of doing business on 10 topics ,
namely : starting a business, dealing with
licenses, employing workers, registering
property, getting credit, protecting investors,
paying taxes, trading across borders, enforcing
contracts, and closing a business.
The report, which was done in cooperation
with the AIM Management Policy Center and
the International Finance Corp., also include
14 other cities in Metro Manila (Caloocan,
Las Pinas, Makati, Malabon, Mandaluyong,
Marikina, Navotas, Paranaque, Pasay, Pasig,
Quezon City, San Juan and Valenzuela); three
cities in the Visayas (Cebu, Lapulapu, and
Mandaue) plus Tanauan in Batangas and
Davao in Mindanao.
In the WB study, Taguig emerged No. 1 in ease
of starting a business. A businessman needs to
take only 15 steps , spend 27 days and 6.9% of
his minimum paid-up capital to be open for
business.
In contrast, one must undergo 23 procedures
in 42 days in Davao; 22 steps in 37 days in
Valenzuela; and 15 steps in 52 days in Manila.
Getting the paperwork needed for construction
is also easiest in Taguig – 23 steps in 121
days compared with Pasig’s 33 procedures
in173 days . The WB study also highlighted
one major cause of the delay is getting an
electricity connection – three months in Metro
Manila and only five days in Tanauan.
The 2008 PBD Yearbook I 70
DBP Yearbook Inside Rev3 (Final)70 70
Fort Bonifacio
Perhaps the most notable physical development
in Taguig is the emergence of Fort Bonifacio
as the next business district of the country. In
the last six years alone, this former military
camp has welcomed A-list institutions and
establishments such as Fort Strip, Market!
Market!, Serendra and the Fort Bonifacio
High Street its skyline has been dramatically
changing every year, indicating rapid pace of
growth and development.
Within the next three years, the city is poised
to become the next tourist destination, with
the construction of five luxury hotels with a
combined 3,000 rooms in Fort Bonifacio. Upon
its completion, the 66-storey Grand Hyatt
constructed by Federal Land, the property
unit of Metropolitan Bank and Trust Co., will
be the tallest building in the country. Other
hotel facilities that are confirmed to rise in
Fort Bonifacio are Sofitel Pullman, Discovery
Suites, Ascott Hotel, and Shangri-La.
A civic center patterned after those in Hong
Kong, Singapore, and the United States will
also be built.. The mixed use complex will
house hotel facilities, convention centers, and
even retail establishments.
Other positive developments include the
ongoing negotiations between the Philippine
Stock Exchange and Metro Pacific Corp. for
the transfer of the unified stock exchange to
a 5,000 square meter lot in Fort Bonifacio, the
construction of St. Luke’s Medical Center, and
the relocation of the embassies of Singapore,
Korea, and the United Kingdom.
On the other hand, the city government is
also coming out with their projects to deliver
womb-to-tomb services to its residents such
as a new state-of-the-art 110-bed district
hospital, a new university, a Taguig Science
High School, and mass housing for the poor.
A 5-hectare city cemetery will be built next to
the upscale Heritage Park. And in addition to
the housing for the poor, the city’s teachers,
firemen, policemen and other professionals will
have their housing.
Perhaps, the most ambitious vision for
Taguig of Mayor Tinga is the building of an
international airport in Taguig’s 7-kilometer
lakeshore area. The place, which is very near
Makati, can accommodate two runways unlike
the Ninoy Aquino International Airport, which
has only one runway.
With so many ongoing activities, there is
no doubt that Taguig will continue to boom.
– Rizal Raoul Reyes
The
greening
of Makati
Being the country’s top business district, the
city of Makati under Mayor Jejomar Binay
has outlined a long–range development plan
to ensure there will be balanced growth in the
area formerly known as San Pedro de Macati.
Part of that balanced growth involves
identifying and designating areas where green
spaces, pocket parks, and landscaped gardens
can be developed and linked according to an
overall Green Plan. This plan, which has been
be formulated based on the city’s Land Use
Plan, will include:
• Utilization of some commercial land parcels
in the CBD as green space. Private property
owners will be encouraged to utilize part of
their lots, although zoned as commercial land
in the 1981 ordinance, as green space.
• Enhancing streetscapes through landscaping
and the aesthetic improvement of sidewalks.
Key street segments that extend throughout
the city will be identified for priority
implementation of landscaping and sidewalk
12/22/08 5:27:16 PM
 Three Cities
improvement measures such repaving, tree
planting, removal of clutter and obstruction,
signage improvement. In general, priority
will be given to pedestrians. Identified
streets are JP Rizal Ave., Chino Roces Ave.,
Lawton Ave., Makati Ave., Ayala Ave., and
Sen. Gil Puyat Ave. When completed, and
by extending across the two city districts,
these landscaped street segments will also
form a series of green corridors that visually
integrate the Old Town, the CBD, and the
Fort Bonifacio areas of the city.
• Development of pocket parks and landscaped
gardens. Small but strategically located
and highly visible land parcels (e.g. street
corners, vacant areas of public facilities,
rotundas, etc.) will be developed into pocket
parks and landscaped gardens.
• Expansion of riverside park. The existing
Liwasang Makati will be a major element
of the Green Plan. It is in a unique location
that offers the opportunity to integrate open
and green spaces with active recreational and
commercial land uses.
• Landscaping of major infrastructure
elements. Recent infrastructure projects such
as the Edsa-MRT3, the Kalayaan flyover,
and the Skyway link have become very
conspicuous parts of the city’s urban form.
The aesthetic impact of these infrastructure
elements will be improved through
landscaping and other features that will
reduce their heavy and obtrusive image.
• Enhancing local capability to manage and
maintain green spaces. The Plan serves as an
initial step towards the establishment of an
institutional framework and corresponding
organization needed to manage and maintain
the city’s green spaces. This organization will
cover support requirements such as tree and
plant nurseries and will include substantial
private sector participation.
The Land Use Plan also identifies special
development areas that, because of their unique
DBP Yearbook Inside Rev3 (Final)71 71
activities or location, can be covered and
guided by more detailed development plans.
These include:
• A government center along JP Rizal Ave.,
which can anchor an urban renewal program
in the traditional part of the city;
• The riverfront development area, with
Liwasang Makati as it primary element, but
which extends throughout the Pasig River
frontage to include residential, recreational
and some commercial uses; and
• The green circuit or the set of street corridors
identified in the proposed Green Plan that can
have a distinct landscaping treatment to serve
as an integrating element of the city.
Quezon
City’s
Triangle
Park
QUEZON CITY joined the business district
development bandwagon when Vice President
Noli de Castro and Quezon City Mayor
Feliciano Belmonte Jr. recently discussed the
blueprint for the Quezon City Central Business
District (QC-CBD) otherwise known as the
Triangle Park.
De Castro and Belmonte chair and co-
chair, respectively, of the Urban Triangle
Development (TriDev) Commission will
spearhead in charting the strategies for the
development of the QC-CBD, a 25-hectare area
located in the North and East Triangles and
Veterans Memorial Area.
According to the city government’s website,
the project has been hailed by the World
Bank as, “the center of gravity of commercial
developments in Metro Manila in the coming
years.”
In fact, the World Bank commissioned
Japanese firm Almec to complete the
framework plan. The estimated P3- billion
project aims to transform a largely institutional
and partly blighted area into one of the most
economically vibrant districts.
At present, the city government is working
hand-in-hand with national government
agencies and various stakeholders for the
development of the area.
Property experts believe the area has good
prospects because of its accessibility to
metropolitan areas metropolitan access. It has
connections to three rail stations and one of the
biggest areas covered by EDSA.
The Triangle Park Project calls for the
formation of five distinct commercial cum
residential districts.
Triangle Exchange is envisioned to have the
highest densities of the Triangle Park. It will
have commercial and residential establishments
fully integrated with the transit facilities,
providing the best regional links and commuter
access.
The Veterans area is envisioned to be a mixed-
use community with a residential focus from
high-rise condominiums to medium and lower
density dwellings. Greenbelt areas will be
built for the residents. The Downtown Hub
will host institutional locators such as medical,
training, science, among others integrated with
commercial and residential developments.
The Emporium section will be technology hub
while the Commons area will consist of a park
with cultural, recreational, entertainment and
amenity focus. Property giant Ayala Land is
an early bird by virtue of building the Trinoma
mall.
—RRReyes
The 2008 PBD Yearbook I 71
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 Business inflat
2008
second
quarter
RESULTS OF THE SECOND QUARTER
2008 survey on inflation forecasts showed
higher inflation expectations for both 2008 and
2009 . The mean inflation forecast for 2008
was higher at 8.8% compared to the previous
quarter’s 4.9 percent.
The upward adjustment in inflation
expectations stemmed mainly from the
acceleration in fuel and food prices, the impact
of which has already started to feed into the
Measuring
inflation
expectations
Yield Curve
Traditional measures of inflation expectations
are contained in the yields of various securities
in the financial market. This is based on the
fact that inflation expectations influence the
shape of the yield curve by affecting expected
short-term interest rates. For example, when
investors revise their expectations about long-
term future inflation rates upward, the yield
curve is projected to steepen. This is so because
since investors are concerned about their real
returns, they would naturally demand nominal
returns that are high enough to protect them
against expected inflation.
Term spreads, based on the yield curve, serve
as another proxy for inflation expectations in
the absence of sufficient time series data. One
term spread (forecast 9-12 months ahead) may
The 2008 PBD Yearbook I 72
DBP Yearbook Inside Rev3 (Final)72 72
prices of other goods (such as fast food meals)
and services (such as transportation). Analysts
noted that additional inflationary pressures
could come from the rising global prices of
metals and steel for construction as well as
coal and natural gas. Meanwhile, contrary to
expectations of a strong currency as a downside
risk to inflation in the previous quarter, the
depreciation of the peso (almost 10% year-to-
date) could support inflation as it will translate
to higher import costs.
For 2009, the survey also showed a higher
mean inflation forecast of 6.1% compared to
the previous quarter’s 4.2 percent.
Citing base effects, most analysts expect
inflation to peak in the third quarter of 2008.
The mean inflation forecast of analysts is
10.6% for the third quarter of 2008 and 10.2%
for the second quarter of 2008.
be defined as the differential between the yields
of one-year bonds and the 91-day T-bill rate.
Studying charts on actual inflation versus the
term spread, it can, therefore, be observed
that the term spread could correctly move up
with the actual inflation (12 months forward),
e.g., in March 2002 or in June 2003. It also
moved down with actual inflation (12 months
forward), e.g., in October 2005. However,
there were also some periods when spreads
did not predict future inflation well, especially
when there were shocks in commodity prices.
Such weakness could be due to the following:
1) the presence of other inter-temporal risks
incorporated in the premium between different
yields; and 2) information among bond
investors may not be fully available 12 months
earlier.
In a previous study, the coefficient of the
three-month spread (182-day versus. 91-
day T-bill rate) was found to be significant
and positive, so that a larger differential is
associated with a rise in the inflation rate.
Moreover, the differential enters with a lag
of four months, so that the differential turns
Based on the probability distribution of
respondents’ forecasts, there is a 31.7% chance
that average inflation for 2008 will be within
8.1-9% and a 31.2% chance that inflation will
be within 9.1-10 percent.
This indicated that there are expectations that
inflation will be above the 4% (+1.0 percentage
point) target for 2008.
Consistent with the survey conducted by the
Bangko Sentral, the Asia Pacific Consensus
Forecasts for Philippine inflation also showed
rising expectations during the quarter in
review.
As of June 2008, inflation for 2008 is now
forecast at 7.3%, higher than the 5.1% forecast
in April 2008 and 4.4% in June 2007.
— by Bangko Sentral ng Pilipinas
out to be a good indicator of what happens
to inflation four months hence. The lag has
an intuitive basis: inflation developments up
to three months ahead are covered by what
happens to the 91-day T-bill rate, while the gap
between the 182-day and 91-day T-bill rate
covers what is expected to happen to inflation
after three months. Following the adoption of
inflation targeting, the BSP started to look at
the market’s view of inflation as represented
by private analysts’ inflation forecasts. One
way was to conduct a survey along with the
publication of its inflation report.
Looking at the historical movements of
forecasters’ expectations over time, the trend of
the forecasts generally moved along with actual
inflation (annual average for the following
year). This is a good indication that the
information contained in the survey is a good
measure of inflation expectations. Presently,
the survey also gathers not only respondents’
deterministic forecasts, but also information
in probabilistic terms, particularly on the
probabilities attached to the various ranges of
inflation.
12/22/08 5:27:18 PM
ation forecasts
2008
third
quarter
PRIVATE SECTOR FORECASTS are higher
for 2008 and 2009, although the forecast curve
appear to be flattening. Third quarter 2008
inflation forecasts showed higher inflation
expectations for both 2008 and 2009. The mean
inflation forecast for 2008 at 9.7% was higher
than the previous quarter’s 8.8 percent.
Lingering inflation was expected to continue to
affect the average price level in 2008. Higher
inflation expectations were largely driven by
A comparison of the resulting mean forecasts
of the BSP survey with current inflation (actual
inflation during the quarter when the survey
is done) reveals that private sector forecasts
follow the path of the said current inflation. In
general, this observation is common among
the other measures of expectations. For a more
frequent reading of market analysts’ inflation
expectations, one can look at other surveys
conducted by private organizations such as
AP Consensus and Bloomberg. Fortunately,
both surveys are done on a monthly basis.
The mean forecasts from AP Consensus have
tracked actual inflation considering that a lot
of information is already available with the
minimal (one month) lag within which the
actual values are predicted.
Meanwhile, the results from the Bloomberg
survey more closely followed the movements
of the corresponding actual inflation (one
month ahead). The narrower deviation of the
Bloomberg mean forecasts over actual inflation
stemmed from the fact that the lag between the
time the forecasts are done and the release date
of actual inflation is relatively short (less than
DBP Yearbook Inside Rev3 (Final)73 73
fuel and food prices during the fist half of the
year. The weaker peso, which drives upward
the cost of imported products , also added to
the price pressures. Meanwhile, some analysts
reported that inflation may have already peaked
and pressures have somehow subsided recently.
The softening of commodity prices, especially
energy, due to the slowdown of global demand,
was expected to support the decline in inflation.
At the same time, weaker consumer spending
would likely keep demand pressures on a
downward path.
For 2009, the survey also showed a higher
mean inflation forecast of 6.5 percent. The
mean inflation forecast of analysts is 11.1% for
the fourth quarter of 2008 and 9.2% for the
first quarter of 2009.
Based on the probability distribution of
respondents’ forecasts, there is a 56.9%
one month). Thus, respondents to this survey
have a lot of information available to them
when they make their forecasts.
Conclusion
The wide range of available measures of
expectations provides policymakers with
important information on how stakeholders
react to evolving price conditions. If these
measures indicate that expectations are already
persistent, then they signal to monetary
authorities that there is a possible emergence
of inflation inertia. At the same time, the
different measures of expectations can be used
by the BSP to test whether its actions in terms
of transparency and accountability have been
effective in strengthening the inflation-targeting
framework by anchoring inflation expectations.
This can be done by comparing the BSP’s
targets against expectations. If expectations
should be observed to have increasing causal
relationship with the inflation target, then one
can conclude that inflation expectations would
have a significant degree of dependence or
anchoring on the BSP inflation target.
chance that average inflation for 2008 will fall
within 9.1-10%, above the 4% target for 2008.
The Asia Pacific Consensus Forecasts for
Philippine inflation in 2008 and 2009 showed
rising expectations in July and August, but
yielded lower inflation expectations in
September 2008 relative to the previous month.
BSP Inflation Forecasts
The Bangko Sentral’s baseline forecasts
indicate that inflation will likely settle above
the 2008 and 2009 targets. However, future
inflation is expected to decelerate to single
digit levels in 2009 to reach the target-
consistent path by 2010.
The current inflation outlook continues to show
that inflation could settle above the inflation
targets for 2008 and 2009 targets. The inflation
forecasts for 2008 and 2009 declined due to
the lower-than –projected inflation outturns
for September 2008, the easing in prices of oil
and non-oil commodities in the world market,
and for 2009, some base year effects from
high inflation in 2008. The emerging baseline
forecasts show that inflation will unwind
over the next few months. Decelerating to
single-digit levels in 2009, to reach the target
consistent path by 2010.
The balance of demand and supply conditions,
as captured by the output gap ( or the
difference between actual and potential output)
provides an indication of potential inflationary
pressures in the near term. Inflation tends to
rise (fall) when demand for goods and services
exert pressures on the economy’s ability to
produce goods and services, i.e. when the
output gap is positive (negative). Based on
revised GDP data, preliminary estimates
yielded an output gap of 4.2% in the second
quarter of 2008, which was higher than the
previous quarter estimate. The positive output
gap could indicate demand pressures that may
contribute to higher inflation.
— by the Bangko Sentral ng Pilipinas
The 2008 PBD Yearbook I 73
12/22/08 5:27:18 PM
 Col. Nicetas Katigbak helps Lipa reclaim ins title as the country’s “Barako Capital”

Making sense of the triple

bottom line
By Rizal Raoul Reyes

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

The 2008 PBD Yearbook I 74

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 Agriculture Secretary Arthur Yap hands over P50 million to finance projects of the Philippine Coffee Board
For the top five issues, improving the quality of
products got the highest with 86% followed by
skills development training for the incumbent
workforce with 77% while close at third was
the improving the safety of products with 76
percent.
Despite these challenges, Juan believes it is
just a matter of time that companies can find
ways to share best practices to implement
their respective CSR programs. Furthermore,
she says LCF members have to intensify their
efforts to reach out to management and stress to
them the importance of corporate citizenship.
“When management realizes the importance,
it can now rally the employees to pursue
corporate citizenship,” she says.
In a survey presented during
the LCF 2008 Forum, 75%
of the respondents pointed
out that corporate social
responsibility “makes a
“tangible contribution to the
business bottom line.” However,
52% of the respondents think
companies should raise the bar
higher in terms of being more
committed in implementing
corporate citizenship to the
ground level.
Sustainable program
Juan, who heads Figaro Foundation, Inc., says
the amount of assistance given by a company
does not matter; the more important thing is
the assistance is channeled to a sustainable
program.
DBP Yearbook Inside Rev3 (Final)75 75
“The question is: To what bigger roadmap can
I connect my initiatives with? And in LCF we
have answered that. Over the last three years,
a lot of our member foundations aligned their
efforts with these two roadmaps. So, no effort,
no matter how small, is wasted but contributes
to a bigger goal,” Juan points out.
Juan says the beauty of their involvement
is there are many areas waiting for their
assistance. For instance, she says education
has many areas that LCF members can help.
She cites teacher training which can deliver
a multiplier effect bigger than textbooks or
schoolhouses in the long run.
“Feeding programs may do well because an
empty stomach is an empty mind which cannot
accept any kind of information,” she says.
For instance, the Philippine Business for
Education has been active in encouraging
students to take up education courses as part
of developing of pool of skilled teachers in the
future.
As far as raising the competency levels
of industries is concerned, Juan says the
Philippine Coffee Board (PCB) is one of the
more sustainable industry boards not only
because of the popularity of coffee but also
because it is in the forefront of addressing of
declining production levels.
Even in the coffee industry board, the
challenge is the sustainability of its projects,
given that the trustees have their own
businesses to run.
“Our consumption is ever increasing mainly
because of our information efforts on the
good quality of our local coffee. As a result,
consumption is even higher than we projected
five years ago. We have been successful in
educating the consumers about Philippine
coffee. Now it is time to concentrate on the
other end of the spectrum--the farmers” says
Juan.
Juan says the current challenge of the PCB
is to work double time or double the farmer
populations, increase the hectares for coffee
plantation.
Meanwhile, Maria Fatima Reyes, founder
and principal of the Sustainability Strategics
(Asia) Philippine Institute of Certified Public
Accounts, sees leadership and commitment,
business case for transparency and
organizational competence and capacity as the
issues to be reckoned in enabling CSR to be
sustainable.
Reyes points out companies must tap
accountants and auditors for their CSR
initiatives must tap the support of the
accounting and auditing sectors for their CSR
data collection and repository
“Accountants and auditors can help companies
develop standards for measurement and
reporting strategy,” says Reyes.
With measurable and comparable data, Reyes
says companies can now develop a stronger
corporate structure for sustainability in CSR
reporting.
In the long term, Reyes sees Philippine
companies implementing the Global reporting
initiative (GRI) in their CSR projects. Further,
she says the Philippines will be active in more
green projects as part of the global initiative to
enhance environmentalism.
The 2008 PBD Yearbook I 75
12/22/08 5:27:24 PM
 A vested production of the Barako, a local variant of
coffee that has been in declined in terms of
production since the 1990s. The result is a win-
“Our consumption is ever increasing mainly
because of our information efforts on the
good quality of our local coffee. AS a result,

interest in win situation for both Figaro and the farmers

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

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

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

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

The bank raised the ante of green banking

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

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 DBP president and chief executive officer
Reynaldo David

The partnership between the two organizations

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

The facility finances the acquisition of fixed

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

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

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 “Living up to our distinction as the first bank
in the country to be ISO 14001- certified, our
sustaining quest for continual improvement
in all our activities continued to be guided by
the processes and procedures defined under
the DBP environmental management system.
Looking forward, we intend to replicate our
success in this area with the rollout of EMS in
the branches starting with four pilot branches,”
says Santo Tomas.
Further, the bank’s EMS remains compliant
with the 2004 version of the ISO 14001
based on the upgrade audit done by the AJA
Registrars Limited on December 2005.
“In the home front, DBP has maintained
its resolve to consistently improve on its
environmental performance. Through
established processes and procedures under
the bank’s EMS, resource conservation and
environmental responsibility have become
ingrained in every aspect of DBP’s operations,”
says David.
DBP is creating opportunities to enable other
institutions to adopt environmental protection
and pollution prevention projects focusing
on renewable energy sources, community
water systems, pollution control and solid
waste management. Under its various lending
facilities, the bank’s combined loan releases
for 2005 and 2006 totaled more than P6 billion.
Patricia Sto. Tomas,
Chairman of the Development Bank
of the Philippines
The 2008 PBD Yearbook I 78
DBP Yearbook Inside Rev3 (Final)78 78
environment project
Mission statement
Green banking is embodied in the bank’s
environmental policy statement: “The DBP,
in its developmental mission and initiatives,
is committed to environmental protection and
sustainable development and shall integrate and
implement environmental considerations into
all aspects of its operations and services, asset
management, and business decisions.”
Further, the bank commits to this policy to
• Develop, implement, and continually
improve an environmental management
team;
• Encourage other institutions to pursue
environmental protection and pollution
prevention through the bank’s lending
and technical assistance programs, and
pursue environmental management
practices, including environmental due
diligence inquiry to risk assessment and
management;
• Comply with relevant environmental laws,
regulations and agreements to which DBP
subscribes;
• Set and review environmental objectives
and targets along identified significant
environmental aspects; and
• Ensure that all employees of all levels are
made aware of and are actively involved
in the bank’s environmental policy and
programs through appropriate training and
information.
David points out the gains achieved by
DBP’s CSR programs anchored on the green
banking have been a source of pride for the
bank. He said partner agencies such as the
JBIC, KFW and the World bank have made
significant contributions to help support DBP’s
environmental programs on-stream.
“Sustainable progress must always be attached
to an important corollary environmental
protection. Guided by this basic principle, our
operations have always pivoted on proving that
profits can be compatible with preserving the
gifts of nature,” he says.— Rizal Raoul Reyes
“Sustainable progress
must always be attached
to an important corollary
environmental protection.
Guided by this basic
principle, our operations
have always pivoted on
proving that profits can be
compatible with preserving
the gifts of nature.”
— Reynaldo David,
president and chief
executive officer of the
Development Bank of the
Philippines
12/22/08 5:27:31 PM
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DBP Yearbook Inside Rev3 (Final)79 79 12/22/08 5:27:45 PM

 Bankers
turned
volunteers
THE SPIRIT OF bayanihan lives in Land

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

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

Specifically, the LandBank’s CSR initiatives

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

The 2008 PBD Yearbook I 80

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