Interview: Mauricio Domogan; Oscar S Moreno; Sara Duterte-Carpio
How will the Build, Build, Build initiative impact your city, and to what extent do you foresee opportunities for private sector participation?
MAURICIO DOMOGAN: The Build, Build, Build project will certainly have a significant and immediate impact on the entire country. There is no way a country can achieve its full potential without the adequate infrastructure in place. Infrastructure can attract both tourism and corporate investment, and the city of Baguio completely supports the programme Build, Build, Build will also be instrumental in developing rural areas, which is a necessary step towards solving the congestion problems in Metro Manila. It is our hope that the programme will be sustained in order to bring more development to the countryside. In Baguio specifically, we are looking forward to continuing our light rail project, as well as building infrastructure to connect the city to less developed, peripheral towns throughout the area, including the municipalities of La Trinidad, Itogon, Sablan, Tublay and Tuba. We hope that these projects can spur investment in these areas, as well as to the Loakan special economic zone (SEZ), where the Loakan airport is looking to bring in new airlines.
If we do not come up with a feasible way to support private sector participation, both Philippine and international investors will be discouraged. The Philippines must make significant improvements to its procurement processes in order to compete regionally. If other countries in the ASEAN region have more favourable procurement procedures than we do, it follows that they will be the ones attracting the available foreign investment.
OSCAR MORENO: Cagayan de Oro is the centre of northern Mindanao and a gateway to the country’s second biggest island. We are currently seeing the resurgence of Mindanao after decades of neglect. Because of its strategic location, Cagayan de Oro can continue to grow as a logistics, trading and transport hub. Emerging cities need to see their growth and success tied to the growth of their surrounding regions. Build, Build, Build should be taken as an opportunity to improve infrastructure connectivity of metropolitan areas. As a whole, the country needs to increase the capacity of more cities and metropolitan areas so that they become competitive and can offset and balance out the high growth happening in other areas of the country.
As the recent security situation in Mindanao has demonstrated, we need the entire island to experience inclusive and balanced growth, since any areas that lag behind will present the risk of destabilisation for the rest of Mindanao.
SARA DUTERTE-CARPIO: Connectivity — be it in road network or logistics facilities — is an important element in nation building and development. With the national government’s Build, Build, Build initiative, we will definitely usher in and spur a new era of economic development. For Davao City, we expect that the project will bring in much-needed investments and employment opportunities for our people.
Both the national and local government welcome the participation of the private sector in the Build, Build, Build programme, as many of the infrastructure projects will require the expertise that only private sector or specific industry players hold. It is in this way that the implementation of the programme will be carried out efficiently in partnership with different levels of government.
In what sectors do you see foreign investment making significant contributions to local economies in the coming years?
DOMOGAN: Foreign investment could make a significant contribution to the area’s mining sector. The area around Baguio is among the most mineralised areas in the country. Benguet, which is adjacent to Baguio, was once a copper and gold mining hub, and home to the country’s largest copper mine. I am confident that the mining industry will re-establish itself over the next few years as the government drafts environmentally sustainable legislation. This could serve as a considerable boost to the area. Additionally, the Cordillera Region is home to many powerful rivers, any of which could be the site of new hydro plants. This could then help to increase electrification across the country. We also have abundant natural hot springs, which demonstrate the area’s potential for future geothermal development projects. Lastly, we are already home to two very large American companies, Texas Instruments and Moog, so SEZs for companies already exist.
DUTERTE-CARPIO: In 1994 Davao City was the first local government unit in the Philippines to have established an investment promotion centre.
We are currently focused on intensifying investment promotion in order to attract more foreign investments. The city government sees wide-ranging opportunities for foreign investments in the areas of tourism, manufacturing and agri-business. We also foresee investment in the establishment of more business and industrial parks in the city.
MORENO: Mindanao is rich in both natural resources and in human talent. We see opportunities for investment in services and manufacturing, with agriculture being key to development.
Currently, ownership of land is limited to Filipinos. However, near Cagayan de Oro, in Misamis Oriental, we have the 3000-ha PHIVIDEC Industrial Estate-Misamis Oriental, an industrial estate that is one of the crown jewels in the northern Mindanao area. This estate has a special charter that allows for an authority to own the land and an investor to lease the land. That said, this is an exception, and in order to further develop our cities, more liberalisation will be necessary to open new opportunities for local governments to work with international investors.
What role do you see manufacturing and added-value activities playing in the development of your city, and how is the workforce preparing?
DOMOGAN: The city of Baguio has consistently provided scholarships to deserving college students as part of the ongoing DO30 platform. This programme provides students with the knowledge and opportunities that enable them to more easily adapt to the demands of different industries.
In addition, the city has partnered with the Technical Education and Skills Development Authority to provide free technical and vocational skills training to our constituents so that they are able to be employed, especially in the manufacturing industry.
DUTERTE-CARPIO: We see manufacturing and value-adding activities as a boon to the growth of the existing economy of Davao City. Our city is still largely driven by agriculture, with more than half of our land area devoted to the agro-industry. The abundance of crops, fruits and vegetables in the city necessitates the need for processing, and introducing value-adding will result in a two-pronged benefit: income generation for both the city government and private sector, and the generation of employment opportunities for the Dabawenyos.
Where will you focus your efforts and resources to enable your city and region to advance in competitiveness rankings?
DOMOGAN: Baguio City is the predominant educational centre north of Manila. Each year there are over 100,000 students who come from elsewhere in the country to live in the city of Baguio and study at our universities, most notably the University of the Philippines Baguio, the University of the Cordillera Region, the University of Baguio and Pines City Colleges. As a result of the upcoming infrastructure improvements, we are hopeful that the universities will branch out to peripheral areas as they look to expedite their institutional development. We will also continue to support our tourism and arts industries. Recently, we became the first city in the Philippines to be named a UNESCO Creative City.
Lastly, in 2018 we are prioritising the expansion of access to power and electricity. If we want businesses to invest in our region, this is a necessity.
MORENO: We are focused on making sure that every citizen and investor in the region feels – and is – safe as they live and work here.
Peace and security are essential. The government needs to be establishing a presence in all corners of Mindanao to show that there is an authority to assist them, and that there are efforts to include all segments of our population.
We also need to improve our bureaucracy. Effective government service is not necessarily difficult to accomplish, but anaemic bureaucracy needs to be identified and addressed. The streamlining of regulations will be important to attract investors. We will take cues from the private sector in order to be more efficient, and have already improved in terms of the ease of doing business.
DUTERTE-CARPIO: Davao City is proud to have been ranked as the third most-competitive, highly urbanised city in the Philippines in 2017, as recognised by the National Competitiveness Council. This is an improvement of two places from 2016. Notably, we are the only city outside of Metro Manila to be included in the top-five places on the list. Despite this success, we recognise that there is still room for improvement, which must be implemented to improve the competitiveness ranking of Davao City.
For us, top-of-mind is to enhance the ease of doing of business in Davao City. In 2017 our city council passed an ordinance to begin the implementation of online payments for local fees and taxes in 2018.
The next phase planned for implementation is to move the application of all permits online. We have also partnered with Isla Lipana, the Philippine member firm of PwC, for the review of our Davao City Investment Incentive Code. This partnership will allow us to keep up with current global trends as we look to attract both local and foreign investments.
In addition, Davao City government has also lined up several infrastructure projects to make accessibility and connectivity even more convenient for the movement of people and goods.
Beyond the prestige of achieving desirable rankings, we want to establish efficiency and the heart to serve our people better.
How do you assess the need to strengthen connectivity, both with the rest of the Philippines and the wider region?
DOMOGAN: In terms of connectivity, the biggest problem we must address is transportation between provinces in the region and between adjacent regions. Improved transportation and infrastructure will facilitate the shipping of goods produced in this region, including both industrial and agricultural products, to other regions.
We need to be able to reach throughout the archipelago, as far as the Visayas Islands and Mindanao, which is a large part of why we are such adamant supporters of the Build, Build, Build programme.
MORENO: Cagayan de Oro occupies a strategic geographic location as it is a good launching area to the Visayas. It is also on the northern side of Mindanao, making it a gateway to the island.
Coming from the east, west or south, you must pass through Cagayan de Oro. All cities in Mindanao are within 500 km, making the entire island accessible from here. Major local and regional players in consumer goods, cement and transportation come to our city because they already realise the potential in terms of logistics. In addition, we are a trading centre with the third-biggest port in the country.
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