Speech of President Benigno S. Aquino III at the 22nd Mindanao Business Conference
Delivered at the SMX Convention Center, Davao City on August 8, 2013
We gather today at a turning point in the history of Mindanao—where this region’s complete transformation from the Land of Promise to the Land of Promises Fulfilled is close at hand. In the past, generations of Filipinos could only talk of the vast potential of Mindanao, but the next step—fulfilling that potential—always seemed elusive. Assessing the situation, perhaps one can cite three basic reasons for this: The first was greed getting in the way of solidarity—for example, greed over land that bred injustice, and led to the cycle of violence that has long condemned Muslims, Christians, and Lumad to fighting with one another. The second was a lack of foresight. The richness and bounty of Mindanao led many to believe that these resources would always be there, unmindful of the consequences of for instance, logging in watersheds. Decisions that would allow Mindanao to adjust to an ever-changing world were postponed—fostering an attitude that has affected us most in the power sector, since hydropower seemed so plentiful and cheap. The third was an unhealthy adherence to old solutions to old, misdiagnosed problems, resulting in a vicious cycle of impunity and corruption, as was the case when ARMM elections were not synchronized to national elections.
This is why, after we assumed office, we wasted no time adopting a disciplined, systematic approach to the development of this region. We made sure to correctly identify the most pressing problems; we studied all the possible solutions, and ultimately pursued the ones that would be the most efficient and beneficial to the vast majority of our people.
The first issue—the obvious issue—we needed to address was peace and security. After all, any real progress must be built on the bedrock of peace. For the past forty years, thousands of families in Mindanao have been displaced and, at times, even harmed by skirmishes. It was vital for us to achieve lasting peace and stability in Mindanao so that those affected by the tensions could get their lives back, so that they could hold steady jobs, so that businesses—both big and small—could focus on efficiency and innovation instead of just worrying for their safety; all this with the greater vision of inclusive growth for all Mindanaoans.
Both sides of the tension are conscious of the fact that conflict is a road that leads nowhere. Hence, all of us made a commitment to putting the arms away, truly engaging in dialogue, and once again putting trust in one another. Now, the MILF and the Government have a Framework Agreement on the Bangsamoro. Just last month, both sides signed the second annex of the agreement; and I am confident that more good news will arrive soon.
Challenges to our stability, of course, still exist. Many of you must have heard of the blast that occurred in Cagayan de Oro just last week. Incidents like this, in whichever island, in whichever province, affect the entire country; and we are one with the victims and loved ones affected by these incidents. Make no mistake about it: This is a desperate act by a small sector dead set against the attainment of peace in Mindanao. For a long time, we have been working to neutralize these elements; and this is a fight in which we have had quite a few successes. And so our continuing message is this: To those willing to partner with us for peace, we welcome you as brothers; but to those who want to challenge the authority of the State, you will feel the full brunt, depth, and might of the State’s response. You will not get in the way of the peace and the stability that will help fulfill the potential of Mindanao.
But peace—vital as it is—is only one part of the equation. From the onset, we had also identified a problem in the region’s power sector—one that needed to be addressed to guarantee growth.
Due to the region’s ten-year exemption from EPIRA, the plants in the region remained under the ownership of government. This meant that some local leaders were able to keep the price of power artificially low in shameless pursuit of political expediency—leading to a pricing structure that did not encourage any investor in the energy sector to bet significantly on Mindanao. The revenues of these government-owned plants could barely recoup the cost of providing power, much more pay for proper maintenance of the plants. And let us not forget: These are power plants that one could liken to cows deserving to be put out to pasture, but are still milked long past their useful life. Agus 6, for example, has been operating for around sixty years, even if it was originally designed to work for just thirty years. In this regard, Mindanao had the worst of both worlds: a combination of complacency and short-sightedness, thinking the weather patterns would stay the same, and that the plants would remain as productive without having to be maintained or replaced.
As much as we wanted to, we could not solve this problem overnight. 200 megawatts of power cannot be bought in a corner hardware store. It takes a minimum of three years to build a coal power plant, which is why the moment we stepped into office, we worked to enact the structural changes necessary to attract more investors in the power sector in Mindanao. Right now, we are on track to end the energy deficit by 2015—during which we foresee Mindanao to already have a surplus.
Perhaps this is also an apt time to remind everyone: A few months ago, Mindanao was facing eight-hour brownouts or at least portions of Mindanao were facing eight-hour brownouts; and government did everything it could to tide us over until 2015, from rehabilitating existing plants to setting up a loan facility for electric cooperatives to purchase or rent generator sets. Now that it’s the rainy season, however, all of a sudden people are opposing the generator sets, saying that they are either too expensive or harmful to the environment. Come the dry season, will we expect the litany of complaints about brownouts to resume?
We are aware that there are a great number of issues that need to be addressed in the power sector; and as your government, we want to address all these concerns at the same time. That’s our job. But we cannot keep looking for perfect solutions. We cannot simply say that we want an abundance of cheap, reliable, environmentally friendly power—and we want it yesterday. We invite all the stakeholders to work with us to find realistic solutions to these issues; and we are ready to listen to all reasonable suggestions.
We must also acknowledge that the business of development in Mindanao, however, is about more than the issues one normally sees in the news. Peace and power are fundamental issues, true; but development is about finding every possible avenue to empower all Filipinos in the region. It is about giving them the opportunity to work hard in their jobs and assume authorship of the next chapters of their lives. And in this respect, our other priorities for Mindanao are the same as for Luzon and Visayas: this region has just as much, if not more, potential in agriculture, infrastructure, and tourism.
From an early age, students are told that Mindanao is the “Agricultural Basin” of the Philippines. This remains true to this day. In 2011, Mindanao produced 8.96 million metric tons of coconuts—almost sixty percent of our national output that year. We see this number growing even more in the years to come. Our administration is taking on a large-scale program to support our coconut farmers: boosting their source of livelihood, while at the same time nurturing the growth of the coconut industry and other crops. The plan is simple: Government will give farmers the necessary resources, in exchange for their commitment to intercropping—sowing seeds of different produce in between the rows of coconut trees. The potential difference in income is stark: Growing only coconuts, farmers stand to gain 20,000 pesos per year per hectare. But if they decide to grow coffee along with their coconuts, for example, that gross income potential increases more than eight-fold to 172,400 pesos per hectare. As of now, there are already 218 intercropping sites in Mindanao helping our farmers; and we are confident that we will see positive results, and thus, expand the program, soon.
Of course, these bountiful harvests will only be useful to the producers and consumers both if products can get to the markets in a timely manner. This is why our administration has also focused on improving transport infrastructure all across Mindanao. In fact, the DPWH has so far allocated 61.54 billion pesos for road, bridge, and other infrastructure projects in Mindanao that for 2011 – 2014. The good news is: This number will be increasing even more. For 2014 alone, we are proposing to the congress that the DPWH is set to allocate another 34.29 billion pesos for projects in the region [Applause]— to stress the point, more than half of what has been allocated in the last three years. We have also begun work on major roads in Mindanao, such as the Lake Lanao Circumferential Road Project worth 767 million pesos, which will be completed in February 2015. The DOTC, the CAAP, and the PPA are also in the process of constructing or rehabilitating 15 airports and 46 ports; and this is not including the Laguindingan Airport, which finally began operations a few months ago, after being put off for 22 years. The goal: to see a Mindanao economy no longer stifled by a lack of proper roads, ports, or airports.
Our efforts at improving transport infrastructure do not just help farmers and local industries; they also have a profound effect on tourism. Mindanao is a region blessed with natural gifts that lend themselves not just to sightseeing, but to diving and surfing and many other activities that tourists would enjoy. And the airports, ports, and roads we have constructed are already doing their part to open Mindanao’s attractions up to the rest of the country and the rest of the world.
Our efforts, combined with our highly successful “It’s more fun in the Philippines” campaign, have already made a tangible impact on Mindanao, increasing foreign travellers in the region by 14.55 percent from 2010 to 2011. The region also welcomed almost 150,000 more domestic travellers in 2011 compared to 2010. And we fully expect that when the 2012 data comes out, these numbers will have increased further. These travellers are not just going to visit beaches and take pictures—they will ride public transport, buy souvenirs, and eat in restaurants. The money they inject in the economy redounds to a more vibrant economy in Mindanao and in the Philippines. Not to mention, having more tourists—both domestic and foreign—experience the true richness and beauty of Mindanao will make every visitor a positive advocate of peace, progress, and stability.
There is no one way to realize the potential that Mindanao has always possessed: it is a pursuit that must be done through the integration of a wide range of industries; it must involve the participation of different stakeholders. Addressing all these issues is the only way to truly accelerate the growth of this region so that people can talk not just about its potential, but also about its vibrancy in the here and now. All these efforts will likewise sufficiently prepare Mindanao for ASEAN Integration, which I know a lot of businessmen from here and from neighboring countries are looking forward to. The vision here is also to create a Mindanao that can compete within the ASEAN community—this is a vision that, with government and private sector initiatives, as well as continuing solidarity, can surely be achieved; and we believe our projects are doing precisely that.
Three years ago, we told the whole world that the Philippines is open for business; and I am glad to say that we followed through on our words. In a span of three years, we have built one of the best performing economies in Asia. Two of the top three credit ratings agencies have granted us investment grade status already. Just recently, Standard & Poor’s also projected that the Philippines will be outperforming its ASEAN neighbors in terms of economic growth. [Applause] And Mindanao’s performance was a large part of these achievements and distinctions. As I am addressing the most prominent business leaders of Mindanao, I ask you today: Continue working with us. You can do so much to help: Whether it is by lending your voices to encourage Congress to pass the Bangsamoro Basic Law by 2014, or by sharing a calm, logical voice as we pursue the long-term solution to the power situation; whether it is by helping medium and small enterprises to succeed or by increasing your engagement in corporate social responsibility, particularly in education, health, and other social services. I appeal to you to take your contributions one step further.
I have the utmost confidence for the future of this region. And if we work together, I know we can fulfill Mindanao’s promise, and perhaps even exceed it. [Applause] Years ago, who could have imagined that we would see a Mindanao as vibrant as we are seeing now—where peace is within reach, where critical gaps in infrastructure and power are being filled? There is much more to come in the future, and I invite all of you: Let us work even closer. Let us continue exceeding expectations, and surpassing even the grandest dreams Mindanaoans have had for the region—towards building a Mindanao that will serve as a global example of large-scale transformation, and a Philippines that truly shines on the world stage.
Thank you and good day.