The 10-Point Agenda being put forward by former president Gloria-Macapagal Arroyo has particularly afforded the strategic opportunity for Mindanao to significantly contribute to the overall development efforts of the national government and that of BIMP-EAGA. It may be noted that the development strategies for Mindanao aptly mirror the thrusts of the national government.

Mindanao’s strategic location in Asia Pacific makes it a potential hub for transport, business, and telecommunications, among others. Mindanao in BIMP-EAGA was dubbed as Asia’s playground in the 21st century due to our exquisite tourism assets, rich water resources and favorable climatic condition. Mindanao’s rich soil and typhoon-free climate allows us to produce bountiful agricultural and fishery products.



Through the years, since BIMP-EAGA was formalized, progress has been achieved, as follows:



I.  BIMP-EAGA Roadmap to Development


The four-year roadmap, 2006-2010, was a major directive issued by the BIMP-EAGA Leaders during their 2nd BIMP-EAGA Summit in 2006 in Malaysia. It aimed to guide the EAGA stakeholders in the identification, prioritization and implementation of programs and projects in realizing the goals of increased trade, tourism and investment in BIMP-EAGA. The implementation of the medium-term BIMP-EAGA Roadmap to Development was approved during the 2nd Summit in Kuala Lumpur in December 2005.  The strategic objectives of the BIMP-EAGA Development Roadmap are to:

  1. Promote trade, tourism and investments within and outside EAGA
  2. Coordinate the management of common natural resources for sustainable development
  3. Coordinate the provision of infrastructure to support economic integration, and
  4. Strengthen the subregion’s institutional structures and mechanisms to support the effective
      implementation of cooperation development activities.

As the said roadmap is midway through its implementation, the BIMP-EAGA Leaders, during their 4th Summit held in Singapore, agreed to conduct a comprehensive Mid-term Review of the BIMP-EAGA Roadmap to Development 2006-2010.  This is to ensure that the current measures and projects being implemented remain relevant and contribute in achieving the goals of the Roadmap. Mid-Term Review Task Force (MTRTF) was constituted in March 2008 to serve as the core group that will assess and decide on technical, substantive and administrative issues that may arise from the conduct of review.

The Asian Development Bank (ADB) is funding the Mid-Term Review Process and the findings of the said MTR will be reported during the 17th SOM and 13th MM in November 2008.



II.    Air and Sea Linkages including Policy Incentives


The year 2007 was indeed the banner year for transport connectivity in BIMP-EAGA. The agreement for the expansion of air linkages in BIMP-EAGA was signed, the Transport Ministers agreed to the designation of additional 5 airports with fifth freedom traffic rights.  For the Philippines, the designated air ports are: Davao City, Zamboanga City, Puerto Princesa City, and General Santos City.  As a result of the implementation of the MOU of Expansion of Air Linkages in BIMP-EAGA, it was reported that approval has been granted for Air Asia of Malaysia to operate the Kuching - Bandar Seri Begawan route (v.v.) and the Kota Kinabalu – Bandar Seri Begawan (v.v.).  Batavia Airlines will serve the Pontianak to Bandar Seri Begawan while retaining the existing route between Pontianak and Kuching.  With increased air services, it is expected that intra-EAGA tourism will grow significantly.

Two other transport agreements were signed by the Transport Ministers at the sidelines of the ASEAN Transport Ministers Meeting in Singapore on November 2, 2007. The first agreement related to the establishment and promotion of efficient and integrated sea linkages, which designated 33 ports as BIMP-EAGA gateway ports.

Among others, the agreement provides for undertaking joint measures to promote and sustain intra-EAGA maritime trade and tourism, facilitate the entry of shipping operators and investors, and grant temporary exclusive rights to pioneering shipping services.  The agreement also calls for developing and formalizing mechanisms that will enable mutual recognition and monitoring of the safety standards, security requirements, environmental protection and ship manning of non-convention ships which currently dominate the EAGA sea lanes.
The implementation of this agreement is anticipated to generate greater mobility and consolidation of cargo within EAGA and from EAGA to the rest of the region.


In support of this, the Transport Ministers likewise agreed on the following specific measures in the air transport, to wit:


        Granting of FFTR (Fifth Freedom Traffic Rights) in 2 selected points in the BIMP-EAGA;

        Multiple designation of airlines (no restriction on the frequency and capacity of airline);

        Adoption of a sub-regional multi-lateral agreement on common airport tariffs;

        Co-terminalization with own stop-over rights; and,

        Code-sharing arrangements and cooperation among small airlines to link areas which are not served by the national carriers.


An in-country support to this development is likewise manifested in the grant 50% discount to current landing fees and charges as well as 50% reduction on Customs and Immigration overtime pay in all seaports and airports participating in BIMP-EAGA.



III.   Business Development and Investment


Modest but encouraging gains have been achieved. The development of subregional value chains have been initiated in the primary commodities of BIMP-EAGA namely oil palm, virgin coconut oil, seaweeds and halal foods. A series of stakeholder consultations and dialogues have been conducted to promote buy-ins of the private sector players in the establishment of the value chains. 

The EAGA Business Handbook and Directory has already been published by BEBC, with GTZ assistance. Copies of the Handbook are downloadable from the BEBC website, www.bimpbc.org.

As directed during the 3rd Summit, the preliminary feasibility study on establishing a private sector development fund (PSDF) has been completed with assistance from the Asian Development Bank and findings were reported to the Senior Officials and Signing Ministers. The Senior Officials then tasked the BIMP-FC, to form a BIMP-EAGA PSDF Task Force which will recommend to the Senior Officials the best possible option/scheme for financing SME projects in EAGA considering including those outlined in the PSDF study.

Relatedly, the BIMP FC with assistance from ADB organized a roundtable on “Enhancing SME Capital Formation and Access to Finance in BIMP-EAGA” Manila on 9 June 2009. The roundtable also served as the venue for the PSDF TF meeting. The PSDF TF concluded that a private equity fund exclusively for BIMP-EAGA is premature at this time. The meeting also agreed that the proposed facility to prepare SMEs for external equity funding should be undertaken at the country level instead of at the EAGA level. In this regard, the following were agreed and adopted:

  1. Each member country will continue its capacity development programs for SMEs under their respective national schemes;
  2. Based on criteria to be set by the member country, each will identify at least five (5) SMEs/champions;
  3. The member countries will prepare these 5 SMEs/champions for possible equity investment over a period of one (1) year or by June 2010;
  4. The 5 SMEs/ champions will then be presented to equity funders (e.g., Aureos) and other interested investors; and,
  5. In the interim, the FC and/or the SMED Cluster are expected to provide and disseminate updates on each member country’s progress in the implementation of this initiative.

 



IV.   Transport and Trade Facilitation


In addition to the business development support in BIMP-EAGA, parallel initiatives have been initiated to ensure the efficient mobility of goods and people across EAGA borders.



org. chart
Figure 3. CIQS Organizational Structure in BIMP-EAGA


Orchestration of Customs-Immigration-Quarantine-Security (CIQS) initiatives in BIMP-EAGA and Philippine-EAGA is demonstrated in Figure 3. The BIMP-CIQS Task Force serves as the regular institutional mechanism for all CIQS initiatives at the BIMP-EAGA level. Meanwhile, the Mindanao-Palawan CIQS Inter-Agency Committee (Min-Pal CIQS IAC) provides general policy directions and specific courses of actions for in-country CIQS initiatives. Finally, the six (6) Local CIQS Consultative Councils (LCCCs) serve as the technical working group of the IAC at local levels as well as resolution venue for port-based issues and concerns.

The BIMP-EAGA CIQS Task Force has agreed to prioritize: the establishment of one-stop CIQS facilities and the streamlining of CIQS rules, regulations and procedures (RRPs) were given high importance to facilitate secure and efficient movement of goods, people and services within the sub-region. It also recognized the need for coordination among development partners to consolidate all CIQS-related initiatives   


The following are milestones under the CIQS initiatives, to wit:



BIMP-EAGA level:


          Designated priority partner ports;

          Conducted an assessment of CIQS environment of said ports with assistance from ADB RETA 6408;

          Started compilation of CIQS RRPs among BIMP-EAGA countries for publication and dissemination;

          Linked already some CIQS websites to FC website and continued the compilation and updating of the directory of CIQS;

          CIQS facilities already existing in all ports of entry and exit in Brunei Darussalam and Malaysia; 

          Regularized RP-RI and RP-Malaysia Joint Border Patrols;

          Institutionalized the four Quarantine sub-groups;

          Started heads of sector meeting for Customs, Quarantine and Security;




Philippine-EAGA level:


          Revived and regularized Mindanao-Palawan CIQS Inter-Agency Committee and Task Force;

          Operationalized Local CIQS Consultative Councils in P-EAGA Ports of entry and exit;

          Established CIQS –OSAC in General Santos City Fishport

          Implemented the AusAID Technical Assistance Project on Strengthening the BIMP-EAGA Support Team on CIQS (BEST on CIQS);

The transport and trade facilitation initiatives will ensure that maximum benefits are derived from EAGA’s physical infrastructure.  These measures are also aimed at promoting the seamless flow of people and goods across borders and more closely integrating the economies of BIMP-EAGA. Other on-going transportation and trade facilitation assistance from strategic partners are discussed in the section on Cooperation with Strategic Partners.



V.   Tourism and Promotion


The pursuit of marketing BIMP-EAGA as a single eco-tourism destination has been reinforced with the adoption of the community-based ecotourism (CBET) development as a strategy to further intensifying partnerships among the local governments and local communities, and a means for addressing rural poverty. This decision was made during the Community-based Ecotourism Conference held on 30 October-1 November 2008 at Manado, North Sulawesi, Indonesia. In line with this, the BIMP-EAGA leaders directed the Tourism Ministers to invigorate its support for ecotourism development in the sub region and strengthen its promotions and marketing efforts to establish BIMP-EAGA as a leading ecotourism destination in Southeast Asia.

Still under CBET development, each member country will have to identify two (2) priority CBET sites that will need to be assisted in coming up with respective CBET development strategy with technical assistance from ADB. For the Philippines, Coron in Palawan and Lake Sebu in South Cotabato are on the priority list.  Engagement of consultant is ongoing and work is expected to commence in August 2009.

In terms of tourism standards, EAGA adopted the ASEAN Common Competency Standards for Tourism Services. Furthermore, the Tourism Cluster adopted “biodiversity” as EAGA’s brand essence. In line with this, the cluster agreed to the report of GTZ proposing “Equator Asia” as the new tourism brand name of EAGA. It was further agreed, however, that further consultations and promotion of the new brand name should be done to make it acceptable among product sellers for a stronger brand ownership. Also, the Branding Task Force, which worked with GTZ in coming up with the new brand name, shall explore alternative taglines to attach to the “Equator Asia” brand name to capture EAGA’s biodiversity essence and to appeal to target markets.

In response to the directive of the BIMP-EAGA Leaders for BIMP-EAGA tourism to gain worldwide attention, BIMP-EAGA countries participated in several activities such as the JATA Fair in Japan as well as the BIMP-EAGA Ecotourism Conference in Indonesia in 2008. Meanwhile, EAGA participated in the World Ecotourism Conference in Laos in July 2009.  Other activities lined up for EAGA’s participation this year include the JATA Fair 2009 in Japan and the first BIMP-EAGA Yacht Rally. For 2010, EAGA is set to join the ASEAN Tourism Forum (ATF) 2010 in Brunei Darussalam as well as hold a Workshop on Information Dissemination on Tourism Standards and Training for Ecotourism Tour Guides.



VI.   Natural Resources Development


Energy development and environment management have been the most discussed topics in regional and international forums. This year’s theme of the ASEAN Summit reflects the importance being given by regional leaders to energy security and to sustainable management of natural resources.  The BIMP-EAGA Energy Sector Action Plan, which covers the development of both conventional and renewable energy and which is consistent with and complementary to the ASEAN’s energy action plans, has been endorsed.  The action plan calls for the phased development and implementation of identified priority energy projects. First off, funding for the conduct of the feasibility study for the West Kalimantan-Sarawak power interconnection project has been secured and we expect the study to be underway by early 2008. Among others, this study will look into the possible parameters for power trading and will facilitate the drafting of a power purchase agreement between West Kalimantan and Sarawak. It is hoped that this project will provide a model for future power trade within BIMP-EAGA.

Renewable energy projects, however, are still in the discussion stage with the member countries reviewing respective priorities.




VII.    Institutional Strengthening


A continuing effort in the sub-region is institutional strengthening thereby ensuring that the core competencies of subregional institutions and the capacities of human resources are consistently built up. The BIMP-EAGA Business Council, the fifth country in the cooperation equation and the officially recognized private sector umbrella organization in EAGA, has finally made significant efforts to expand its consultative platform. The preparatory study for legalizing or formally institutionalizing BIMP-FC has been completed and the accompanying agreements have been drafted. The next step is to ensure that all agreements necessary to complete the legalization process are signed in 2008.




Mainstreaming Local Governments


Local Governments have also stepped up their participation in cooperation activities. With the institutionalization of the BIMP-EAGA LGU Forum held annually back-to-back with the SOMM, local governments are now given the venue to discuss among local executives common issues and and possible collaboration efforts and programs.  Moreover, a technical working committee has been created to identify and recommend the most appropriate mechanisms for structuring the participation of local governments in cooperation activities. 

The convergence of the development agenda of the private sector and the local governments can only accelerate trade, tourism and investment in BIMP-EAGA.  This convergence of interest is a demonstration of the confidence of stakeholders on the cooperation initiative and recognition that economic integration in BIMP-EAGA is a powerful tool for economic development and poverty reduction.

Hence, initial agreements were made and activities to jumpstart the local government’s collaboration were also identified, to wit:

·         Regular exchange of information and conduct of trade visits between LGUs with potential trade links

·         Exploratory talks on possible joint cooperation (Wood processing, Fisheries/mariculture, Jatropa, Palm Oil, and other agricultural commodities)

·         Revival of bilateral discussion on fisheries cooperation between General Santos City, Philippines and North Sulawesi, Indonesia

·         IGACoS and Sarawak, Malaysia (Ekran Bhd) to explore the possibility of reopening the Samal Casino Resort



VIII.    Enhancing Information Dissemination


Information dissemination, although a critical component of cooperation development, has been one of the weaknesses of BIMP-EAGA. In 2007, the BIMP-EAGA Communications Strategy was formulated and the BIMP-EAGA Media and Communicators Association is one of the identified key awareness agents of BIMP-EAGA. BEMCA has stepped up its participation in the implementation of the strategy, strengthened cooperation among journalists based in EAGA through regular roundtables, and is now finalizing the BIMP-EAGA news exchange facility. These developments will increase media mileage and bring BIMP-EAGA within the radar screen of a wider audience of investors, traders, and tourists.



IX.   Cooperation with Strategic Partners


The Asian Development Bank, as Regional Development Advisor, has been BIMP-EAGA’s long-time committed partner. BIMP-EAGA continues to benefit from the extensive involvement and learning of ADB in the development of other growth areas in the Asia and the Pacific. ADB has committed to significantly increase its assistance to BIMP-EAGA from about USD700 thousand in 2007 to USD2.5 million in 2008. While continuing to provide assistance to key sectors, ADB is proposing to intensify its assistance in developing the priority economic corridors, the power interconnection project, renewable energy including possible financing schemes, and in undertaking the comprehensive mid-term review of the BIMP-EAGA roadmap to development. Among ADB’s technical assistance arein the areas of environment, energy, CIQS, institutional strengthening and mid-term review of BIMP-EAGA programs and projects. Hereunder is the summary of ADB’s technical assistance packages for BIMP-EAGA for the period:



Regional Economic

Technical Assistance

Description

Implementation Period

Amount



Support for Customs, Immigration, Quarantine, and Security Harmonization in BIMP-EAGA. (ADB)



The TA aims to assist the EAGA countries to (i) strengthen the role of the CIQS Task Force as a catalyst for the CIQS harmonization process, (ii) establish or enhance national institutional mechanisms to coordinate effectively the CIQS harmonization initiatives, (iii) formulate strategies and implement action plans to streamline, simplify and harmonize CIQS processes and formalities at ports of entry and border crossings, and (iv) build the capacity of CIQS focal points in the subregion.





July  2007 to December 2008 (with extension up to October 2009)



U$ 600,000



Efficiency Improvement and Connectivity Strengthening in Archipelagic Southeast Asia Project (ADB)



The principal objective of the RETA is to promote higher and sustainable growth in aSEA by increasing investment in transport and energy infrastructure. This will be achieved by preparing a list of subprojects and completing pre-feasibility studies for the highest priority of them, to stage suitable for further development as actual investments.



March 2008-

March 2010

U$ 2.75 Million



Institutional Development for Enhanced Subregional Cooperation in the aSEA Region



The RETA will support strengthened regional cooperation in aSEA playing a greater role in the development of the region. It will accelerate the implementation of the existing roadmaps through capacity development, and provide for impact and results monitoring.



March 2008-

February 2010.

U$ 3.8 Million



Strengthening Sound Environmental Management in the BIMP-EAGA 

The RETA will strengthen the sustainable management of natural resources in the BIMP-EAGA. It will produce an agreed design for Regional Environment Program (REP) for BIMP-EAGA.

March 2008 – September 2009

U$ 1.7 Million





Likewise, our relations with the ASEAN Secretariat have been mutually supportive.  ASEAN has provided opportunities for networking with dialogue partners. The present engagement of PRC, the Australian Agency for International Development, and the ASEAN Japan Centre with BIMP-EAGA has been made possible through the ASEAN Secretariat. The ASEAN Secretariat has also provided advice to BIMP-EAGA on aligning the sub-regional with the regional development agenda, and with the pilot-testing of regional agreements in transport.  Efforts are being undertaken to access assistance from the ASEAN Foundation for some BIMP-EAGA projects.
The German Technical Cooperation Agency project has been extended to 2011, an indication of the confidence of the German Government to the potential of regional cooperation and integration in BIMP-EAGA.  Among the many supportive activities of the GTZ, the development of the subregional value chains in the principal commodities of BIMP-EAGA such as oil palm, virgin coconut oil, and seaweeds is one of its major contributions.  A subregional value chain is an important component in the development of an efficient EAGA trade logistics industry. GTZ likewise funded the Convergence Meeting of BIMP-EAGA Air Transport and Tourism Sectors last 23-24 February 2008 at the Marco Polo Hotel.  Subject activity was able to attract 45 participants representing the airline companies, travel agencies, tour operators, hoteliers, BETC, BEBC, GTZ, local government unit, BIMP-FC, and tourism offices of the BIMP-EAGA countries.
The East ASEAN Initiative (EAI) was developed by AusAID to promote economic growth and security in the BIMP-EAGA subregion. EAI is a $ 2.7 million development program to promote growth and security in the East ASEAN subregion of Southern Philippines and Eastern Indonesia.  This consists of five (5) pilot projects to be implemented within 18 months beginning March 2008, as follows:



  1. Business Development Services. (BDS). This project aims to aggregate local small enterprises in selected areas in Eastern Indonesia and Southern Philippines into sustainable business units to link into local, regional and international value chains.  The project has the following components:  (a) building technical and business capacity (focus on seaweed aquaculture and eco-tourism); (b) access markets and finance; and (c) building governance and sustainability. To date, inception phase has been conducted already including training needs and gender analysis by the Indonesia International Rural and Agriculture Development Foundation (INI RADEF).
  1. Single Window for Investment Facilitation and Trade (SWIFT).  This project aims to contribute to economic growth in the East ASEAN region through more streamlined facilitation of investment and trade.  The components include:  (a) Network establishment; (b) Validation of Davao SWIFT; and (c) Extending/replicating SWIFT. Inception phase initially started. Progress has been made in establishing necessary contacts with the concerned Philippine government agencies. Pario Solutions, the project’s contractor, is now initiating the formation of a Steering Committee for this pilot project. Existing related programs that are being looked up as potential models for the SWIFT Project include: UN/CEFAT; ADB’s Support for CIQS Harmonization in BIMP-EAGA; APEC Sub-Committee on Customs Procedures (SCCP); and Cebu City SWIFT Facility. Pario Solutions initially indicated there are a number of issues regarding the scope of the project that has to be discussed which will be included in the formal report. 
  1. Customs Information Exchange (CIE).  This project shall establish and operate an agreed Customs Information Exchange between the ports of General Santos, Philippines and Bitung, Indonesia that will contribute to facilitating trade and enhancing trade security.  The project’s components are:  (a) groundwork for CIE development; (b) Communications Infrastructure; and (c) Agreed protocols.  The Centre for the Advancement of Trade Integration and Facilitation (CATIF) had already briefed the respective Heads of Customs of the Philippines and Indonesia and had likewise conducted site visits in General Santos City and Bitung City. Initial consultations were made with the Private sector representatives of GenSan and Manado-Bitung, including BEBC and MEDCO.
  1. Maritime Logistics Project (MLP).  This project is aimed at laying the foundations for increased trade by developing an integrated, practical strategy for improving maritime logistics for non-bulk commodities between the East-ASEAN sub-region and key Asian markets through the following components:  (a) Laying actual foundations; (b) Evaluating alternatives; (c) Developing implementation approaches; and (d) Ensuring stakeholder buy-in.  For the Indonesian side, Meyrick Consultants & Associate already completed research on the nature, origins, and destinations of non-bulk commodities with focus on the Eastern Indonesia (East Java, Papua, Maluku, Sulawesi, and Kalimantan) as well as identified key issues to be considered in the areas of transportation logistics, both maritime and landside. While for the Philippine side, the contractors are focusing first on gaining stakeholder support in the priority ports of Davao, Cotabato, General Santos, Cagayan de Oro, Zamboanga and Palawan.
  1. Maritime Security Project (MSP).  This project shall enhance security of the maritime transportation system between selected ports by reducing the illegal movement of people, cargoes, and vessels between the Philippines and Indonesia in order that increased investment and economic growth occur.  The project’s components are:  (a) cooperative working relationship; (b) consistent security practices; and (c) security awareness. The Australian Department of Infrastructure, Transport, Regional Development and Legal Government had made initial contacts with the Philippines’ DOTC and Indonesia’s Ministry of Transportation but agreement between these two agencies has yet to besigned pending go signal from Indonesian side.

 



X.    Cooperation with Development Partners


Our collaboration with development partners has been encouraging. The Northern Territory of Australia has expanded its collaboration with BIMP-EAGA in the area of human resource development and capacity building.  Ties were renewed during the meeting of the Senior Officials with NT on 18 June 2008 in terms of exploration of possibilities for cooperation on the areas of business cooperation, academic research and sports.  NT likewise expressed interest in working again with the BEBC in the development of a new portal.

With the People’s Republic of China, a framework of economic cooperation is currently being finalized, pending several amendments to the pre-finalized form during the 16th SOM.  This framework of cooperation is set to be signed by the BIMP-EAGA Signing Ministers together with the People’s Republic of China in August 2009.  Areas of cooperation include agriculture, forestry, fishery, tourism, exploration of minerals, energy and other natural resources, infrastructure, human resources development, development of alternative sources of fuel, and finance.

Also, the Government of Japan has expressed interest to be an observer in the BIMP-EAGA, thus, a representative of the Japan’s Ministry of Foreign Affairs was invited to a side meeting during the 16 SOM.  During this meeting, Japan expressed interest to forge cooperation with BIMP-EAGA on the areas of tourism promotion, tuna management and SME partnership. Japan is preparing two invitation programs for EAGA such as Youth Exchange Program on Human resource development and Tourism Exchange Program before the end of the year.  Further, Japan is also interested in studying the possibility of formalizing the cooperation framework between BIMP-JP.



XI.   On Regional Gains


Generally, the regions in Mindanao benefited from the creation of BIMP-EAGA.  Almost all regions were able to host BIMP-EAGA and P-EAGA related meetings, seminar, training, fora, among others.  The stakeholders on seaweeds, halal, among others were active participants in the conduct of workshops, seminar, and trade missions within and outside of the sub-region.  Surprisingly, the experiences and lessons learned were applied in their areas. Following are the specific gains at the regional level:  

a)    Zamboanga -Tawi-tawi – Sandakan.There used to be three (3) shipping lines operating in the Zamboanga-Sandakan sea route: Aleson Shipping Lines, SRN Fast Sea Crafts, and Sampaguita Shipping Lines. However, Sampaguita Shipping Lines terminated its operation on 18 January 2001. Meanwhile, Aleson Shipping Lines and SRN Fast Seacrafts have continued their voyages in the said route twice a week (Mondays and Wednesday). The average rate for a one-way voyage from Zamboanga to Sandakan is only Php3,200.00. This will require 18 hours voyage time. Passenger traffic in the Zamboanga-Sandakan section has tremendously increased by 296.88 percent from 3,177 in 2004 to 12,609 in 2005. This figure is indicative of the increasing trade and tourism activities which have been sustained by the regular operation of shipping services between the areas. SRN Fast Sea Crafts has also been providing regular shipping services between Tawi-Tawi and Sandakan on a once a week basis.

b)    Zamboanga – Sandakan.There were already two (2) Philippine-registered airline companies which operated in this route, South Phoenix Airways (2004) and Mosphil Aero (2006). However these two companies were not successful in their ventures due to their limited financial capacity. Mosphil Aero’s operation barely lasted two months. The reason for these failures are internal problems of the airline companies, the market is perceived to be very viable as can be seen in the continued operations of ocean-going passenger ferries in this route. On the other hand, Asian Spirit has started regular flights in the Zamboanga-Sandakan route last 7 May 2007 but has suspended flights due to change in ownership.

c)    Demak Motor. The motor is engaged in the assembly and distribution of motorcycles. It employs 18 workers, 11 of whom are Filipinos. It is likewise expected to increase its sales with its partnership with the EMCOR group which has 183 distribution outlets in Mindanao and Visayas. Demak motorcycles are cheaper that the leading Japanese brands, making it competitive in the market.

d)    Direct importation of diesel fuel.To mitigate the effect of the rising cost of fuel, YL Fishing Company and Nancy Fishing, both based in Zamboanga City, directly import diesel fuel from Malaysia via a local fuel-tanker ship. To date, the two companies were able to import 12 times already. Average importation volume is 150,000 liters per voyage. The estimated price difference is around P10/liter.

e)    The Philippines is pushing for the following proposed programs and projects entitled, “Formulation of a Framework on Rubber Cooperation”, High-Value Aquaculture Forum” and “Establishment of Integrated Coconut Processing Facilities”. The coconut project will be pilot-tested in CARAGA and shall be presented by the proponent, PCA-CARAGA, during the 6th NRD Cluster Meeting in Manado, Indonesia on 10 June 2008.

f)     Davao – Manado. There used to be two airlines serving the Davao-Manado air route – Merpati Airlines and Bouraq Airlines. However, Bouraq Airlines has terminated its services in December 2004 since the company suffered financial and operational constraints while Merpati Airlines folded up its operation in December 2006 due to low load factor. Sriwijaya Airlines, an Indonesian-flagged carrier followed and mounted regular air services in the Davao-Manado air route on November 2006 but folded its operation on May 2007.

g)    General Santos – Bitung. MV Rimba Tujuh, an Indonesian-flagged container vessel, with a 200-TEU capacity, used to ply this route twice a month. However, it has terminated its services due to the inability of the current cargo traffic to meet the minimum volume requirement of the vessel.

h)    Glan – Tahuna – Bitung. Following a trade mission to North Sulawesi, Indonesia, the Jose Abad Santos-Glan-Sarangani—Cooperation Triangle (JAGS-CT) held an experimental/inaugural voyage in the Glan-Bitung section on 8 October 2006, using M/L Aljamar, a 90-GRT Philippine-registered motor-launched vessel. The shipment brought activated carbon, beauty soaps, cola products and sample fresh mango from JAGS-CT. However, only the activated carbon and the fresh mango were unloaded in Bitung, the beauty soaps and cola products were returned to the Port of Glan due to CIQ restrictions in Indonesia.

i)      PT Sinar. A JV between the Signal Marine Group (Philippines) and some Indonesian businessmen in the production of canned tuna based in Bitung, Indonesia with a capital infusion of US$ 7.7M which started in 2003. The JV provided an avenue for our Filipino tuna companies to expand their operations, making them more flexible and more competitive.

j)      PT Samudra. A wholly-owned Mindanao corporation which is also in the business of export-grade canned tuna which started in 2003. Its produce is primarily exported to the USA. Another example of a Mindanao company expanding its operations in BIMP-EAGA, making them more flexible and more competitive in the highly competitive global tuna market