Mindanao’s lack of infrastructure, budget make PHL unprepared for Asean integration

Published by rudy Date posted on July 20, 2013

DAVAO CITY—The long years of neglect that Mindanao suffered would have its painful and telling blow when the country is forced to open its entire economy to the scheduled single market of the Association of Southeast Asian Nations (Asean) by 2015.

“Everybody now acknowledges that Mindanao is not the country’s backdoor anymore. It is the front door to the country’s integration into the Asean Economic Community,” said Romeo Montenegro, chief of the public affairs and international investment unit of the Mindanao Development Authority (MinDA).

MinDA is the government’s socioeconomic planning unit for Mindanao and the designated official government representative agency in the Asean’s subregional grouping called BIMP-Eaga.

Montenegro said infrastructure was still the biggest issue of this southern Philippine island, which remained largely agricultural and whose agribusiness potential was long stymied by the prohibitive shipping cost by a highly monopolized shipping industry.

Infrastructure was being worked out in the last few years, though, with upgrading and improvements of the seaports and airports. Montenegro said the ports of the cities of Davao, General Santos and Zamboanga needed special attention due to their strategic location in the transport network in the Asean.

But overall, he said “almost all sectors and industries in Mindanao are not prepared for the integration.”

Aside from the prohibitive shipping costs that prevent Mindanao vegetables, fruits and other crops from contributing to the steady supply in the national capital and other domestic markets, the production sector also complained of the lack of good farm roads and lack of processing facilities as concerns that the government had not paid adequate attention to for several decades.

Business owners, mostly small and medium enterprises, have also identified restrictive and strict banking credit regulations and requirements, and the long permitting and licensing process and high cost of doing business on the part of local governments as the other problems of starting business.

The Davao City Chamber of Commerce and Industry earlier disclosed that its members, which are almost all small and medium businesses, were forced to borrow from the loan sharks due to restrictive loan requirements set by the Bangko Sentral ng Pilipinas.

The only consolation for DCCCII, however, was the similar problem faced by smaller cities and provincial capitals in other Asian countries that would place many small businesses in the region on the same dilemma.

But Montenegro said Mindanao has a better advantage compared to the other areas in the Philippines in the area of economic integration. “Our long years in the BIMP-Eaga [Brunei Darusallam, Indonesia, Malaysia, the Philippines-East Asean Growth Area] has provided us with a strong footing in economic integration.”

The BIMP-Eaga was created in March 1994 and has reached consensus in even critical areas like customs, immigration, quarantine and security and made vast progress in intra-Eaga trading with the opening of air linkages like the Davao-Manado in Indonesia route, and the Zamboanga-Sindakan in Malaysia.

Montenegro said he was optimistic the national government would be more cooperative now in providing the needed support, mainly infrastructure funding, for Mindanao over “this acknowledgement that Mindanao is the major island connection with Asean in the coming 2015 free trade.”

While he admitted that Congress may still be hard to persuade, “we are already getting adequate budget preference from the national government agencies in the development of agriculture and agribusiness and on the development and upgrading of the ports and road networks.” –Manuel T. Cayon, Businessmirror

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