Wednesday, September 23, 2015

AKLAN: THE PLACE TO INVEST* By Peter Wallace Chairman, The Wallace Business Forum

*A paper presented during the Aklan Investment Forum held on July 17, 2015, Grande Royale  Restaurant, Andagao, Kalibo, Aklan.(2nd of three parts)

International openness meanwhile measures the ease of obtaining visa requirements. Based on the latest T&T Competitiveness Index, the Philippines is the second most open country in the world.

However, the Philippines got poor marks in the enabling environment and infrastructure sub-indices, which aren’t exactly surprising. Also, the country remains in the bottom half of globally competitive Asia Pacific countries, while it ranks 5th among the 9 Southeast Asian countries included in the survey. Singapore, Malaysia, and Thailand, ASEAN economies with very efficient rail systems and airports, are the top countries in the region.

In 2014, the government logged 4.8 million foreign tourist arrivals, below the government’s target of 5 million and only a modest increase (3%) from the international tourists recorded in 2013. While the influx of foreign tourists into the country has increased quite significantly over the last 5 years, the annual growth in tourist arrivals has been slowing down. Moreover, the Philippines is still lagging well behind its regional peers in terms of the volume of the foreign visitors. In 2013 where comparable regional data is available, the Philippines attracted 4.7 million foreign tourists, dwarfed by Vietnam’s 7.6 million; Indonesia’s 8.8 million; Singapore’s 15.6 million; and Thailand’s incredible 26.6 million.

The WEF report added that investments are needed in digital connectivity and infrastructure to further boost the tourism competitiveness of the country and eventually attract more tourists. At present the Philippines fares disappointingly in these 2 categories.

The establishment of a Department of Information and Communications Technology (DICT) is vital in developing the digital infrastructure of the Philippines. It is already in its final stages as the Senate recently passed on third and final reading a bill seeking the creation of a DICT while its version in the House of Representatives is still pending on 1st reading. Without President Aquino’s imprimatur, the bill’s passage in the administration-dominated House is in peril. The Department of ICT is particularly crucial as even the World Economic Forum noted the increasing importance of mobile-internet based services. A DICT would enable the environment required for faster and cheaper internet access, something that would support the use of mobile applications for planning itineraries, booking, travel and accommodation. Some of this mobile applications, which the oldies might have a hard time using, include those for booking taxis or renting private vehicles such as Uber, Grab Car and Easy Taxi; and those for booking hotels such as PinoyTravel, Agoda, TripAdvisor and HotelQuickly. Perhaps, there are already some applications about Boracay and Aklan available for download on Android mobile application store, but just like any tourist destination, these apps must also be marketed vigorously.

In terms of physical infrastructure, the government has allocated P16.2 billion to construct and upgrade 966 kilometers of roads and 1,228 lineal meters of bridges. I just hope Aklan is getting its fair share.  However, the government needs to speed up construction and focus on implementing key infrastructure projects as more tourist arrivals are expected, especially with the upcoming ASEAN economic integration Aklan can benefit from.

One area of development that can be done in Aklan is to bring the successful concept of partnership between government and the private sector in the public arena into projects here. There are many projects that need doing in Aklan, and the provincial government is keen to do them, getting the private sector to help may be the way to go.

Tourism is the country’s 4th largest source of foreign exchange earnings. But to sustain this and to further develop the local tourism sector, succeeding administrations must improve the country’s business climate and intensify the construction of infrastructure projects that would directly link tourists and world-class destinations like Boracay.

So I’m glad to see that the new wing of the passenger terminal building of the Kalibo International Airport was opened on March 26, 2015, while the new departure area was opened on March 30, 2015. These developments (worth (P44.3 million) will accommodate additional passengers. Aklan looks geared for the projected high volume of visitors to Boracay and other beaches as they are developed.

Then there’s the Caticlan Boracay Airport which is a P5.3 billion PPP project being undertaken by San Miguel Corporation’s subsidiary, Trans Aire Development Holdings Corporation. It involves the runway extension of the Godofredo P. Ramos Airport from 950 meters to 1,800 meters. SMC will also be constructing a new passenger terminal. It is expected to be completed next year.

Boracay attracts about a third of the more than 4 million international tourists who visit the country every year. Hence, better airports would mean more foreign visitors to Boracay and nearby islands. It is estimated that one foreign tourist is enough to generate one additional job. This equates to more jobs and livelihood for Aklanons. More importantly, more well-paying jobs locally would entice Filipinos working in cruise ships and hotels and restaurant abroad to come back to the Philippines and work here. Parents get to spend quality time with their children. The social cost of working abroad is minimized. And here’s an idea, let’s encourage the cruise ships to stop over here.

Aklan is also heavily dependent on agriculture. Among the province’s top agricultural products is coconut, a product which health benefits are beginning to be recognized ever more rapidly worldwide.

Aside from traditional export products like coconut oil, copra meal and desiccated coconut, there’s also a huge market for coir and coconut water, which the Aklan coconut industry could tap. Coir is the fiber obtained from the coconut husk. It can be use to make rugs, ropes and fiber boards. Coco coir net is used for soil erosion control. It is ideal for the rehabilitation of football fields, golf course greens, and riverbanks and slopes susceptible to soil erosion. Note that during President Aquino’s SONA in 2011, he mentioned that coconut coir fibers have been used locally as a cost-effective way to strengthen the country’s roads. Western Europe has an annual coir yarn and rope demand of 54,000 metric tons while the Japanese, Korean and European car makers have an annual demand of 137,000 MT of rubberized molded coir. The Metal Industry Research and Development Center of the Science and Technology department has developed a twining machine to mechanize the production of coconut coir. But more financial support is needed to further improve the quality of our coir products. Marketing is also important if we want our coco to get noticed by large markets like United States, Germany, Japan, and South Korea.

Global demand for coconut water, meanwhile, has been growing tremendously. Large beverage firms Pepsi, Vita Coco and Fiesta Coco Equity are investing heavily in coconut water and have in fact pledged to source their demand for coconut water from the Philippines. International athletes and celebrities are also into coconut water. Locally, the demands for coconut water has been on the rise as more Filipinos search for healthier alternatives to softdrinks and other sport beverages. (To be continued next issue) /MP

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