Biz leaders blame policy problems for Mindanao’s slow economic growth

DAVAO CITY (MindaNews / 16 Nov) — Local business leaders are blaming Mindanao’ slow economic growth on ambiguities in some government policies, insecurities in land ownership, and conflicts.

From 2010 to 2013, Mindanao posted a real gross domestic product (GDP) growth of only 5 percent compared with Luzon’s 5.3 and Visayas’ 5.2, according to the study presented at the Joint Enabling Secretariat-Inclusive Business in Mindanao (JEM-IBIM) in Seda Abreeza hotel last Friday.

Preliminary results of the Mindanao Jobs Report (MJR) conducted by the World Bank in the Philippines was presented there.

The report is an offshoot to the Philippine Development Report on jobs conducted in 2014 to provide the next administration a detailed and comprehensive study on how to address the complex issues that hinder Mindanao’s growth and development.

Arturo Milan, Davao Light and Power Company (DLPC) executive vice president and chief-operations-officer lamented how investment opportunities have been shunned in Mindanao due to the complex regulations implemented by the government like Republic Act 8371 (Indigenous People’s Rights Act) or IPRA, and the issues on property rights concerning lands where investors are supposed to be operating.

“We are focusing on investments, which are generators of jobs. We should try to look at the complex regulations and property ownership that add up to the discouragement of the investors,” he said.

Citing limitations set by IPRA, Milan said there are vast lands in Mindanao that have remained unproductive and where companies are interested to invest in “but not clear on how to go about it.”

“It’s confusing how to make the atmosphere conducive for investments,” he said.

The IPRA provides that projects that will affect indigenous peoples’ lands and resources require free and prior informed consent (FPIC) of the IPs or Lumads, as they are referred to in Mindanao.

The IPRA recognizes the Lumads’ right to self-determination. The FPIC is intended to protect indigenous rights and interests and to give them a voice in matters that affect them, such as when investors come to undertake projects like mining, power generation, plantations.

Vicente Lao, president of the Mindanao Business Council (MBC), said the administration of President Benigno Aquino III was supportive of the passage of RA 10667 or the Philippine Competition Act, and RA 10668, or the Foreign Co-Loading Act, which amended the 50-year old Cabotage Law, but the implementing rules and regulations have yet to be passed.

These two legislations were signed in July 2015. `

“The foreign vessels were not allowed to ship from Manila to Mindanao because only the local shipping companies can service the routes. This costs us double (for lack of competition) to ship goods. The amended version of the Cabotage law still has implementing guidelines (and without an IRR) will die a natural death,” he said.

RA 10667 provides “for a national competition policy prohibiting anti-competitive agreements, abuse of dominant position and anti-competitive mergers and acquisitions.”

Meanwhile, RA 10668 allows “foreign vessels to transport and co-load foreign cargoes for domestic transshipment.”

Karl Kendrick Chua, WB senior country economist in the Philippines and MJR team leader and senior country economist, said that to fully realize the potentials of the Philippines, Mindanao must keep up with this growth, which is uneven in several regions of Mindanao.

The weaker basis for growth was also attributed to the slow growth of the total factor productivity in innovation, technology, and governance, and the large deficits in infrastructure and human capital investment.

In terms of structural transformation, he said Mindanao’s labor productivity increased in the last decade, with labor reallocation from agriculture to higher productivity sectors being the main drivers.

He added though that the overall productivity of Mindanao still lags behind the rest of the country.

“There has been modest agricultural growth in Mindanao but productivity levels still lag considerably behind Luzon,” he added. (Antonio L. Colina IV / MindaNews)