BICOL-MAN

"Be Cool Man"

Industry Development Areas

Source: http://www.neda5.net/rpfp/industry_devt_areas.htm

The industry sector plays a vital role in production land use.  By providing livelihood and employment opportunities for the people, it generates investments that help reduce the incidence of poverty and thus, help steer the region toward sustainable growth.

Since the early seventies, the government has recognized countryside development as a major strategy to accelerate regional development. Several programs were adopted to disperse and re-channel development activities outside the Metropolis. Limited investments in the countryside, however, held back the industrial dispersal programs and policies of the government. The priority given by the national government on infrastructure development in Metro Manila proved inconsistent with the objectives of the industrial dispersal policy, i.e., to decongest Metro Manila and encourage industries to locate outside the metropolis. Consequently, industries continued to locate in the metropolis and its suburbs, leaving the countryside untapped.

The government’s countryside development strategies included the following: (1) the development of Regional Growth Centers (RGC) popularly known as Regional Agro Industrial Centers (RAICs); (2) the establishment of growth networks and corridors to strengthen linkages among provinces and regions; and (3) the enactment of RA 7916 or the Special Economic Zone Act of 1995 as amended by RA 8748 and of RA 7227 or the Bases Conversion and Development Act.  The identified growth centers were envisioned as development hubs of the underdeveloped regions.

Consistent with those strategies, Region V identified during the late 1980’s the City of Legazpi as the site for the Bicol Regional Industrial Center (BRIC).  The presence of major infrastructure facilities critical for an industrial center, like the seaport and airport, were the primary factors for assigning the location to Legazpi City.  Barangay Lamba, Legazpi City was identified as the site for the BRIC.  A feasibility study conducted under the supervision of the Regional Development Council (RDC) V revealed that developing the area would not be financially viable due to high investment requirements. The RDC V through Resolution No. 13 Series of 1993 approved the transfer of the site by the City Government of Legazpi to Bgy. Homapon, where the conversion of a 57 hectare agricultural land was approved and a road network was constructed.  The offsite road project was funded under the Social Development Fund of the President (P7.125M) and DPWH Fund (P5.0M).

Seven years after, the BRAIC site remains a barren land.  The landowner had not initiated any onsite development because no investor was willing to locate in the area.  Its Conversion Order signed on September 26, 1996  stipulated that “the development of the area should proceed at the rate of five hectares per year, not to exceed a total of five years from the issuance of this Order.”   It further stated that “any violation of the terms and conditions shall be ground for the recall or cancellation of this Order.” The decision of the PARO on this matter is still being awaited.

A corridor-type strategy deemed to accelerate agri-industrial development in infra-ready areas, thus requiring less government investments, was conceived by the RDC V in 1993. The project, dubbed as the Legazpi-Iriga-Naga Growth Corridor (LINGC) covered the four cities of Legazpi, Ligao, Iriga and Naga, and selected municipalities in Albay, Camarines Sur and Camarines Norte. Later on, it included Daet, Camarines Norte and was renamed as the Legazpi-Iriga-Naga-Daet Growth Corridor (LINDGC).

The completion of the LINDGC master plan in January 1999 could pave the way to the rapid development and emergence of several business centers along the growth corridor.  The implementation of some government projects identified in the master plan is on going, such as:  Pantao Port, Legazpi Port, Legazpi Airport, Bicol River Basin-related projects (i.e., the River Basin and Watershed Management Program) and several solid waste management projects of the LINDGC-member local government units.

The enactment of the Special Economic Zone Act in 1995 paved the way to the identification of several ecozones in the region.  Five areas were initially recognized in Bicol as ecozones, namely: the cities of Naga and Iriga in the Province of Camarines Sur; Legazpi and Tabaco in the Province of Albay; and Sorsogon in the Province of Sorsogon.  In addition, some LGUs also considered other areas in their municipalities as sites for special economic zones. This was consistent with the PEZA Law, which stipulated that “other areas may be identified as ecozones although they do not meet the criteria set for ecozone establishments provided that the said area shall be developed only through local government and/or private sector initiative without any financial exposure on the part of the national government, and that the area can be easily secured to curtail smuggling.”

Among the proclaimed and approved special economic zones in the Bicol Region, only the Legazpi City Special Economic Zone and the Global Industrial Maritimes Complex in Jose Panganiban, Camarines Norte had Presidential Proclamation issued by President Fidel V. Ramos on June 9, 1998 (Presidential Proclamation No. 1249) and by President Gloria Macapagal-Arroyo on December 2, 2003 (Presidential Proclamation No. 508), respectively.  As in the BRAIC, there were no locators in Legazpi Ecozone despite some groundworks undertaken onsite by the City Government of Legazpi. The other proposed ecozones in the region already have their PEZA Board Resolutions, however, they have yet to meet other requirements to qualify for a proclamation by the President of the Philippines

Bicol Region still has few large industries. DTI data indicated that  there are only eight large industries and these are mostly located in the province of Albay.  Four are coco-based industries, namely:  Cosay Coco Products, Cosay Coco Oil Mills, Legazpi Oil Company, Inc. and Globe Coco Manufacturing, Inc.; two are abaca-based (Alindeco and Isarog Pulp and Paper; and two are mineral-based, in the island of Rapu-Rapu, Albay and Camalig,.

On the other hand, Bicol Region has 27,256 micro, small and medium enterprises (MSMEs) that account for 99.93% of the total 27,732 establishments of the region in year 2002 and  around 3.3% of the total SMEs nationwide.  Among its provinces, Camarines Sur registered the highest number with 8,250 (31%) followed by Albay – 6,452 (24%), Masbate – 3,743 (14%), Sorsogon – 3693 (14%), Catanduanes – 2,894 (11%) and Camarines Norte, having the least number with 2,414 (9%).

In terms of Business Sector, services has the highest share of 91%.

By business activity, Wholesale and Retail Trade had the most number with 16,723 or 60.34 percent, far second was Community, Social and Personal Services with 3,423 (12.35%) and the least was in Agriculture, Hunting and Fishing with 2.23 percent.

Problems that inhibit SMEs from expanding are: the high cost of financing or interest rate, stringent collateral requirements by financing institutions, inadequate or inefficient infrastructure support system that contribute to high cost of doing business in the region, limited market, poor product design and packaging, lack of access to market information and poor forward and backward linkages among and between production sectors.

For the Information and Communication Technology (ICT) sector, the region houses six companies engaged in Business Process Outsourcing (BPO), located in the two cities of the region, namely: Legazpi City (4) and Naga City (2).  These companies are operating in line with data conversion, medical transcription, web design, digital animation and maintenance services for US companies.  The combined employment of these companies totals to 1,102, with data conversion as the highest employer.  Almost all companies started operation in 2003, except for one (1) company which started in 1999.

Supporting the ICT sector are Bayantel & Digitel, the main telecommunication providers & Internet Service Providers (ISPs) in the region with bandwidth ranging from 56kbps to 1 mbps.  Both companies can deliver T3 connection (US standards – 48mbps) or a combination of E-1 connections (European Standards currently used in the Philippines).  All provinces have ISPs with Camarines Sur having the most number of ISPs (8).  There are four (4) companies that cater to Plain Old Telephone (POTS), using non-digital copper wiring.  There are at least 46 schools and training institutions which offer ICT-related disciplines ranging from short-term courses to bachelor’s degree in computer science and majority of these are located in the provinces of Albay and Camarines Sur.

Source: http://www.neda5.net/rpfp/industry_devt_areas.htm

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