Tag Archives: infrastructure

Industrial Parks: Next wave of real-estate boom

BusinessMirror
February 13, 2019
Amor Maclang

AGRICULTURE is a key contributor to the Philippine economy. However, when compared to some of our Asian neighbors, our agricultural industry falls behind, especially in terms of quality processing, manufacturing and exportation.

For the Mindanao region, falling behind represents a huge untapped opportunity to advance the country’s agro-business sector. Mindanao is the country’s fruit basket after all. The Davao region, specifically, is a key exporter of various agricultural products such as banana, abaca and rubber.

With 16 percent of the 2019 national budget heading toward Mindanao, the government is clearly prepping the south of the Philippines for economic growth. But how can the agro-business sector benefit from the growing Mindanao economy?

A premier agro-industrial park

FOR the Anflo Group of Cos., which includes Tagum Agricultural Development Cos., Inc. (Tadeco), Davao International Container Terminal (DICT), Pearl Farm Beach Resort and Damosa Land Inc., the solution is simple: enable access to and support the integration of agricultural materials and processes. The conglomerate is offering their solution through the newly developed Anflo Industrial Estate Corp., a premier agro-industrial ecozone in the Davao region. AIEC is a 63-hectare park that houses industrial lots and ready-built factories that international and local processors and manufacturers can either purchase or lease for five to 25 years.

“We received our Philippine Economic Zone Authority [Peza] accreditation by 2015 and started building the park itself in 2016,” said Ricardo Lagdameo, vice president for Anflo’s real-estate arm, Damosa Land Inc. “We felt that the economy was right and that it was necessary to diversify the types of businesses in the region. The Davao region is known for fresh fruit production and export, but today we believe that the heft of the growth opportunity will be in manufacturing, especially as this relates to agro-industrial manufacturing.”

AIEC is built and zoned to boost industrial development. Unlike many industrial parks in the country, AIEC is located within walking distance to an international container port. It is also only 40 minutes away from an international airport. “We are providing a space that has complete infrastructure, security, unparalleled location and access to a world-class container terminal. We have also planned infrastructure for the future—wide roads, sewerage treatment facilities, 24/7 security and commercial amenities to service the workers in the park,” said Lagdameo.
Benefiting commerce, community and country

A world-class industrial park in Mindanao benefits many stakeholders. For agricultural processors, an organized industrial park makes for an efficient business setup. Since AIEC is registered under the Peza, locators also receive tax incentives.

The agro-industrial zone also represents income for the community. Mindanao is home to almost one-fourth of the Filipino population, so the industrial park means major job creation in the region. Being located in the food basket of the country means access to various types of agricultural produce. The Davao region is known to be the leading producer of bananas, pineapple, cacao and coconut. Local farmers can thus benefit as the park brings together ready buyers of harvest. For example, AIEC’s locators include a saba processor and a banana chip manufacturer. “In five years, AIEC will be a bustling community with 4,000 to 5,000 workers, a place for farmers to sell their produce, and a driver for growth in the region,” envisioned Lagdameo.

Moreover, AIEC’s developers are part of a conglomerate that has been doing business in Davao for almost 70 years. This places AIEC apart from other industrial parks in the Philippines and in direct competition with international counterparts. According to Lagdameo, “Foreign investors look at how easy it is to do business in a country before investing in it, as well as how secure it will be for the next years to come.” And AIEC is designed to pull foreign investments into the Philippines and drive global economic competitiveness.
The global interest in AIEC

There is already demonstrable global interest in the premier agro-industrial zone. AIEC’s growing list of locators includes at least four nationalities—Filipino, Dutch, Chinese and American. Some notable locators include Del Monte Fresh Produce (stores packaging materials for their fresh fruit exports) and First Panabo Tropical Foods Inc. (processes frozen turon and saba for export). United Good Harvest (processes dried banana chips for export) is also set to begin its operations within the first quarter of this year.

“Most of our locators are involved one way or another in agri-business. Aside from food processing, we signed on a pallet manufacturer that services the needs of plantations, a company that produces packaging material for fresh fruit exporters, and a foam manufacturer which supplies material for packaging, as well. We also seem to be at the positive end of the ongoing trade war between China and the US. A number of Chinese companies are setting up in AIEC in order to be able to continue exporting to the US from the Philippines” explained Lagdameo.

In total, 65 percent of AIEC’s first phase of lots and ready-built facilities have already been leased or sold. Currently, the park is receiving multiple inquiries for the remaining 4 out of the 15 ready-built facilities that have been established. Several more units will also be constructed this year to accommodate the demand.

“What we’ve seen on our end is that locators want to come in quickly. Hence, we will be building our more ready-built facilities for locators to choose from.”

However, the current capacity represents only one of four phases of AIEC. In the next two years, AIEC will roll out two additional industrial phases and one commercial phase. Plans to place a cold-storage facility are also in the works. With major expansion in the pipeline, AIEC will certainly serve as an international business gateway for Mindanao and the country.

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Mindanao 2020 document launched in Cagayan de Oro

GoldStar Daily
17 May 2012

REPRESENTATIVES from the business, civil society, and government agencies met Tuesday in Cagayan de Oro to draft a road map for the economic future of Mindanao by 2020. Mindanao Development Authority (MinDA) Secretary Luwalhati Antonino said during the Mindanao Economic Policy forum that many of the issues confronting Mindanao today and the strategic way forward actions that need to be pursued are embodied in the Mindanao Peace and Development Framework plan (Mindanao 2020) which MinDA presented to President Aquino in 2010 as the administration’s agenda for Mindanao. In the Mindanao 2020 plan, the economic policies are embodied in the 10-point agenda. “This holistic, integrative and multi-dimensional plan is hoped to transform Mindanao into a peaceful, integrated, cohesive and dynamic isLand-economy that will be at the forefront of our country’s sustainable development within the next twenty years,” Antonino said.

Antonino added that the blueprint for Mindanao’s future goes well beyond economic and infrastructure development, and addresses other dimensions that are integral to Mindanao’s holistic sustainable development, such as peace and security, human development, and social cohesion, governance and institutions. Antonino, who was appointed to the position as MinDA Secretary by President Aquino, said the government’s policy is to endeavor to pursue progress and transformation for the isLandregion, not only in the context of securing peace amid history of confl ict but also in terms of harnessing its inherently rich economic potentials for the benefi t primarily of Mindanawons. In the formulation of Mindanao 2020, the following guiding principles were adhered to:

Holistic and integrative planning, which addresses the social, economic, environmental, cultural, political/institutional and spiritual dimensions of human welfare as interrelated and mutually reinforcing concerns; Environment and natural resources as the foundation for the peace and development roadmap to the future of Mindanao, implying that these must endure and be judiciously sustained into the future; Considerat ion for the larger national, regional and global context, i.e. planning with full consideration of the dynamic changes in the national and international Landscapes; Subsidiarity, asserting that units of governance closest to the people must be the primary determinants of actions and interventions to address problems and issues that begins in communities; Pluralism and cultural diversity as a strength that can be harnessed through appropriate attitudes and motivation;

Paramount importance of good governance in effectively addressing injustice and poverty, and in promoting sustainable development; Participation of women and youth as essential elements for the success of various peace and development interventions; Affi rmative action and a preferential option for Mindanao to redress traditional injustices and restore confl ictdamaged facilities and institutions; Sensitivity to the various dimensions of confl ict in addressing traditional challenges; and Wide ownership secured through a participatory plan formulation process, critical to gaining wide support towards its successful implementation.

Antonino added that it may sound like an ambitious plan for Mindanao, but that Mindanao 2020 is fi t for the people of Mindanao. “We should dream, we should not be content with what we have now, and this is not for ourselves but for our children, they will benefit these policies,” Antonino said. Sam Chittick, governance advisor of the Austalian Assistance for International Development (AusAID), said “Mindanao must change. That the opening sentence of the Mindanao 2020 report sets out the fundamental challenge for everyone here today, and all those interested in future growth and peace in Mindanao. This statement, through the voice of all Mindanawons, challenges each of us to consider what we’ve done, what we are doing, and what we can do to help change the fundamental dynamics that have constrained Mindanao for decades.”

Chittick added that the Mindanao 2020 is a labor of love for many people “including some of the best and brightest minds of Mindanao, like Dr. Ciel Habito, Ella Antonio, Fr. Bert Alejo, Fr. Jun Mercado, Dr. Ric Eguia, Marian Roces, Edtami Mansayagan, Samira Gutoc, and Dean Tony La Vina,” Chittick said. Chittick added that these authors were responsible for many consultations around Mindanao, and a large part of their role was listening to the desires of the varied interests of Mindanawons. Antonino said the Mindanao Economic Policy forum would hopefully be able to fruitfully discuss, validate and supplement the observations and analysis contained in the policy papers so as to generate shared consensus, offer alternative perspective and recommendations.

She added that the policy papers will be presented by experts from the Brain Trust led by former National Economic Development Authority director Dr. Ciel Habito, whose team had assisted MinDA in the formulation of the Mindanao 2020. “In line with this, the administration of President Aquino is truly committed to give Mindanao the attention it deserves in the pursuit of our social development and poverty alleviation initiatives, apart from our general thrust for inclusive growth and widely-shared economic development,” she said.

Tax holidays to attract new investments

The Philippine Star
April 02, 2011

The Investment Priorities Plan for 2011 is off the press, so to speak, and is now up for approval in the Cabinet.

The priority projects include Agriculture, Ship Building, Low Cost Housing, Development of Indigenous Energy Sources, Infrastructure, Research & Development, Green Projects (in terms of manufacturing goods and efficient use of energy and natural resources), Tourism and Motor Vehicles. A special criterion has been included –this is Strategic Projects.

For the low-cost housing projects, the Board of Investment (BOI) lowered the cost per housing unit from P4 million to P2.5 million, only for purposes of qualifying under the BOI incentives scheme. For tourism projects, the BOI has considered projects which are otherwise not covered by the Tourism Development Act, which supported only tourism-related projects located in tourism zones. Now the agency is coordinating closely with the Department of Tourism (DOT) to identify worthy projects outside of the tourism zone, so this should be good news for developers who wish to qualify under the BOI laws.

Of course, motor vehicle development is a high priority in the 2011 IPP, and it’s high time we gave the auto industry this much-needed boost. I was in Thailand about a week ago for the all-new Ford Ranger launch and also for the Bangkok Motor Show. Much as I enjoyed the hospitality of my host, Ford Group Philippines, enjoyed Thai cuisine and their shopping, and found the Thais a very friendly people, I couldn’t help but feel pangs of regret that we have not achieved as much as the persevering and hardworking Thai people have in terms of the automobile industry. Thailand is now considered the hub as far as motor vehicle manufacturing is considered in the region, and for good reason. They are not plagued by excessive taxes, have no labor problems, and are not burdened by the high costs of doing business – permits and licenses, power costs, etc. The government has been very supportive of the auto industry and look where they are now.

For the motor vehicle criterion, the BOI is set to give incentives for parts and components locally fabricated as well as use of alternative sources of energy in the manufacture of these. What are these incentives?

The Executive Order (EO) that is still in effect grants zero duty on all importation of capital equipment for projects listed in the IPP. Sadly, this EO ends in June 2011, but BOI, has been pushing for another Executive Order to extend the effectivity of the zero duty on capital equipment. A public hearing has been set through the efforts of the Tariff Commission, but the President has yet to sign the EO.

Another incentive is the Income Tax Holiday (ITH) for these BOI-approved projects under the IPP. The duration of the ITH would depend on whether the project is a pioneering effort or not. If it is, the project proponents can enjoy as much as 6 years holiday. If this pioneering project generates foreign exchange earnings, it earns a bonus of one year in the tax holiday. If the project’s direct labor to capital equipment ration will not exceed $10,000/work force, another one year bonus is earned in the ITH. Further, if the project makes use of indigenous raw materials, about 50 percent or more, in the project, they stand to earn another year bonus in the ITH.

For non-pioneering projects, the Income Tax Holiday is good only for four years. In total, though, a project can only enjoy ITHs for not more than eight years.

This is covered by a Memorandum of Agreement between the BOI and the Bureau of Internal Revenue (BIR), so project proponents can run to the BOI if, while one’s project is still covered, you suddenly find a letter of authorization from the BIR in the mail informing you of an impending audit. The BOI promises to arm you with all the necessary documents to preempt the audit. The BOI will issue a certificate of ITH entitlement for all those qualified under their laws. However, BOI also reserves the right to validate the amounts claimed in the income tax returns of these projects and evaluate the full claims based on their own computations. The BOI annually forwards the list of companies/projects entitled to ITH based on a taxable year.

For 2011, the Board of Investments vows to be more strict and vigilant in granting income tax holidays, presumably because of some abusive companies who have used the BOI as a shield against the BIR. All companies/projects will be advised of the procedures they will have to comply with in order to avail of the ITH. Meanwhile, the BOI clarifies that a single company can have two or more projects listed with the BOi for purpose of availment of incentives. In 2009, for example, there were 844 projects listed, but only 699 companies. The year before that, 924 projects were approved, but only 780 companies were listed.

The BOI laments that some camps view these incentives as revenue foregone for the government. However, there is a fixed duration of these tax holidays, so after 4 to 8 years, these companies will have to pay their regular income taxes. Also, the projects are certain to generate employment for hundreds of thousands of our countrymen. For the 2011 IPP, BOI is targeting one million in employment. There is also the foreign exchange that will be generated by these projects (Note: export projects are automatically included, subject to procedures) and the country can certainly use the foreign exchange.
BUSINESS & LEISURE By Ray Butch Gamboa.