Long road ahead for Zambo’s battered economy

ZAMBOANGA CITY (MindaNews) — A mantle of insecurity still cloaks the business community here as it continues to grapple with the impact of the recent urban warfare that did not
only hostage innocent civilians but also the entire city and its bustling economy.

While most of the business establishments have re- opened, many have shown signs of utmost caution such as shops closing early at night or opening late in the day. For some of those opened during daytime, their sliding steel doors are either full or half- opened but their windows are totally shut, indicating readiness to close any time danger lurks.

The business climate remains abnormal two weeks after the standoff was declared over by the government, leaving behind a badly shattered economy that would take tremendous efforts, resources and time to heal.

For 20 days — the duration of the war that came after Moro National Liberation Front (MNLF) members loyal to founding chair Nur Misuari laid siege initially on four of the city’s 98 barangays on Sept. 9 — the total preliminary estimate of economic losses to “Asia’s Latin City reached P6.6 billion or P331 million daily.

The estimated losses are in terms of Gross Value Added or the total payment to factors of production like wages, interest, profit and rent, among others. The data was provided by the National Economic and Development Authority (NEDA) in Region 9 based on the computation of the regional office of the National Statistical Coordination Board (NSCB).

On Sept. 28, Day 20 of the standoff that began on September 9, Defense Secretary Voltaire Gazmin declared “mission accomplished” while Local Governments Secretary Mar Roxas announced the “siege is over in Zamboanga.”

For the business sector, however, it is still not over. In fact, it is just the beginning of the arduous recovery process that business and government leaders interviewed for this story could not say how long it would take to complete.

Abnormal times

Stalls selling candles and religious artifacts outside Fort Pilar Shrine in Rio Hondo, one of the city’s premier tourist spots, opened only last October 4, a week after the siege was declared over. But only a few stall owners have opened and on abnormal operating hours.

Rio Hondo was one of the sites of fierce clashes between government troops and MNLF fighters.

“Our operations are restricted and business is still very slow. We open at 7 a.m. and close at 5 pm., unlike before the standoff when we can close our stores even beyond midnight,” Abigail Malalay told MindaNews on October 8.

At this time of the year, Fort Pilar and the streets leading to it would have been teeming with people and trade booths because of the Zamboanga Hermosa Festival or the Fiesta Pilar celebration in honor of Nuestra Señora La Virgen del Pilar.

Malalay lamented a very significant drop in sales unlike before when she could take home at least P10,000, especially during Saturdays and Sundays, because of the volume of people flocking to the shrine.

On October 8, armored tanks and government troops guarded the entrance to the Shrine that remained closed.

Malalay, 30, who has been helping tend the store since she was six years old, said they closed shop for 27 days.

Beside Fort Pilar, which was built by the Spaniards in the 17th century as their defense fortress, Paseo del Mar, the “gimikan” or chill-out party place in the city, was a virtual ghost town with business establishments there remaining close. Heavily- armed policemen were the only persons at the gate and inside the seaside venue.

A few meters away,Lantaka Hotel and its neighboring row of restaurants and law and other professional offices remained closed.

“We were advised to open by the military, but at our own risk,” stressed Carl Andrew Rubio, a lawyer and a certified public accountant.

But businessmen and professionals in this district could not risk resuming their operations until they could get full security assurance from the government.

“Nobody is coming here to avail of professional services,” he told MindaNews on Occtober 7, pointing to a lawyer- friend who was boarding his car to go home because clients weren’t coming.

Big loser

Among the city’s manufacturing sector, the sardines industry suffered huge losses as they were forced to shut operations due to the standoff, leaving thousands of workers displaced including those from the commercial fishing sector.

This city is the “Sardines Capital of the Country,” hosting 11 sardines factories operated by 10 companies. It supplies 80 to 85 percent of the country’s canned sardines requirement.

“During the first ten days of the crisis, the estimated lost income opportunity is no less than P850 million for the sardines industry,” Roberto Valerio, executive director of the Industrial Group of Zamboanga, Inc. (IGCI), told MindaNews.

The group counts as members six of 10 sardine companies, two of thee coconut oil mills, one of two seaweeds processors and two of three plywood manufacturers.

On September 13, Day 5 of the standoff, seven factories resumed operations, and all of the 11 sardine factories are now running but not on full capacity as of October 7.

“There’s only one shift from the normal two, and they’re only operating until 5 p.m. The night shift remains suspended,” Valerio said.

The reduced shift has a tremendous impact on the sardines factory workers and the commercial fishing industry which employs 20,000 to 25,000 individuals, he added.

Of the 18 IGSI member- companies, Valerio, also the secretary general of the Zambasulta Employers’ Confederation, said the allocation for salaries has gone down by more than half.

“During normal times, the payroll of our member companies is between P12 million to P14 million. During the first two weeks of the standoff, it went down to just P4 to P5 million,” he added, noting the “no work-no pay” policy for non-regular employees.

Many workers were tremendously affected by the shutdown of the factories, Valerio stressed.

“You think these are all normal times, they are not,” he said when asked about the sentiment of the business community after the standoff was declared over.

While there were gainers due to the standoff, such as the catering industry and some hotels, the losers far outweigh them, Valerio said.

According to the National Disaster Risk Reduction and Management Council’s website, as of October 2, 23,794 families or 118,819 persons in 14 barangays in Zamboanga City and one in Zamboanga Sibugay, were affected by the standoff. Of this number, 20,810 families or 105,705 persons were inside and outside evacuation centers. The standoff also left 137 persons killed and 10,160 houses burned.

It also forced the suspension of air and sea transport, locking down the city for over a week. Flights were resumed only on Sept. 19, Day 10 of the conflict.

Early end to standoff possible

The loss of many lives and properties and the economic meltdown in the city could have been avoided early on if only the government handled the situation properly. Valerio blamed Roxas and Gazmin for the prolonged conflict.

“Roxas was part of the problem, including Gazmin. They came here not to solve anything. They came here to add to the problem,” he said.

The crisis could have ended on Day 5, September 13, if the government had responded to the demands of MNLF commander Habier Malik for a ceasefire and a safe passage out of Zamboanga.

President Benigno Aquino III arrived in the city that same day. He stayed until September 22.

Valerio cited the presence of the government’s security assets in the city like the Western Mindanao Command and the Philippine National Police, including the presence of American troops inside the military base, as “factors that could have prevented the conflict from erupting.”

“Where’s their intelligence [network]? There was no failure of intelligence, there was no intelligence at all,” he said.

“They could not have launched the attack without any preparation. They must have prepared for the attack months before,” Valerio added.

For Pocholo Soliven, president of the Zamboanga City Chamber of Commerce and Industry Foundation, the conflict could not have erupted if only the government had talked to Misuari, hence avoiding “holding Zamboanga City and its economy as hostage, as collateral damage.”

“We don’t deserve this to happen, this is our home. More than anything else, the conflict created a wedge in the harmonious multicultural diversity enjoyed by Christians and Muslims here,” he told MindaNews.

Like Valerio, Soliven also questioned the apparent intelligence failure that could have prevented the MNLF from laying siege on the city.

Stressing the conflict left more questions than answers, Soliven said the Office of the Presidential Adviser on the Peace Process “has a lot of explaining to do.”

He said the military solution would not have been an option if only a dialogue was resorted with the MNLF under Misuari and if there was an effective intelligence gathering.

Soliven stressed that not only Zamboanga City, the economic hub of Region 9 and parts of the Autonomous Region in Muslim Mindanao (ARMM), was affected but also the trade in Basilan, Sulu and Tawi-tawi (Basulta).

Trade between the city and the three island provinces of ARMM includes oil, copra, seaweeds and rice, among other consumer commodities, he said, adding that Zamboanga City is the traditional R & R (rest and recreation) destination of people from the BaSulTa provinces.

For the city, however, the economic loss could be bigger than the P6.6 billion estimates computed by the regional office of the NSCB, stressed Soliven. He said this estimate covers only the formal sector — manufacturing, banks, trade, and other large industries. He said if the informal sector, the small businesses would be factored in, “the economic loss would go even higher as they comprise the bulk of the local economy.”

Admitting that rebuilding the economy of Zamboanga would entail gargantuan tasks, Soliven said their worry now is not much on attracting new investors but keeping those in the city to stay.

“Our fear is more about capital flight. The major concern is how to keep those already here to stay,” he stressed.

Act of rebellion

Some businessmen who lost their properties to fire due to the conflict are trying to get off the ground by claiming for insurance, as in the case of Lorenzo Rivera, chief executive of Tres Alaz Corp. and Z.C. Urion Marketing Corp.

Engaged in the distribution of various products in the city and neighboring provinces, his companies employed 200 employees. Today, “our business has been severely crippled and our employees dislocated, as all our offices and stocks were destroyed by fire.

Lorenzo’s companies operated in Martha Drive, Barangay Sta. Catalina, one of the areas severely devastated by the armed conflict. Their properties were insured for fire.

He said he was claiming for insurance worth millions of pesos but is having a problem since the burning was considered an “act of rebellion.”

“I am appealing for help so we can stand again, and for our employees. This very unfortunate event is not of our making and not to our liking,” he told MindaNews.

He has sought the help of City Hall and the business chamber for intervention in claiming insurance, “if not on legal, at least on moral and humanitarian considerations.”

Lorenzo said that during the 1995 siege in Ipil, Zamboanga Sibugay, businessmen who insured their establishments against fire were able to claim from the insurers because of the intervention then of the Ramos administration.

He urged other businessmen in the city who lost their properties to fire due to the standoff to come out so they can collectively push for their claims with the insurers.

A difficult task

Restoring the confidence of investors in the city is a tough task, and how long the recovery process will take remains uncertain.

“This is a very difficult challenge since perceptions cannot be changed easily particularly because, even before the siege, “Mindanao in general,” has already been struggling to change its negative image,” Teresita Socorro Ramos, NEDA-9 director, told MindaNews.

“It is fundamental, therefore, for all agencies concerned, including the private sector, to address the peace and security concerns of Zamboanga City… When investors become confident that peace and security is stable in the region, then perceptions may change,” she added.

Ramos said that before the siege, Mayor Maria Isabelle Climaco presented to the Regional Development Council her plan to conduct a peace and security summit, which has been referred to the Regional Peace and Order Council (RPOC).

President Aquino, however, has yet to appoint the RPOC chairperson.

Ramos said the output of the peace and security summit would have been a set of strategies to address the peace and security concerns of Zamboanga City and Region 9 as a whole.

On the part of the private sector, she said it has recommended the formulation of a master peace and security plan for Zamboanga City.

Ramos said it is difficult to say how long the economy can recoveras it “all depends on the collaborative work of all stakeholders and the availability of resources.”

“It would be along time. Everybody will have to rebuild from the ashes but it will really take a lot of doing, a lot of operations and a lot of unity and one direction,” Rep. Celso Lobregat (1st district) told MindaNews separately

Congressional inquiry

Rep. Lilia Nuño (2nd district) told MindaNews she would call for a congressional inquiry “that would get to the bottom” of the three-week standoff. Like the other business leaders, she expressed dismay at the intelligence failure to detect the intrusion, citing also the presence of the West MinCom, the PNP and even the US forces in the city.

The US troops have been known to provide intelligence support to Philippine security forces using their state-of-the-art surveillance equipment like unmanned drones.

“There is something along the way why it took the military so long to solve the crisis,” she said

Rehab fund

The national government has allocated P3.89 billion rehabilitation fund for the city, the bulk of which, P2.13 billion, is earmarked for shelter assistance to those who lost their homes to fire, according to data from the Office of Civil Defense Region 9 (OCD-9).

At least P797 million would go to the construction of bunkhouses of the evacuees, it added.

The third largest allocation is for “administrative expenses” at P285 million, the report showed.

After all the smoke from the fires has cleared and the guns and bombs have been silenced, it is the population and the economy that will face the ugly consequences of the war staged in its own backyard.  (First published in the October 14 issue of OUR Mindanao, the weekly newsmagazine of MindaNews).