DAVAO REGION 2010 PLANS AND PROGRAMS

1. DAVAO REGION 2010 PLANS AND PROGRAMS

2. CONTENTS • The Operating Environment and DTI-XI’s Contribution • Development Prospects • Plans and Programs for 2010 • Development Outlook for 2011 and beyond

3. The Operating Environment Investments Davao Region, 2008 and 2009 Investments by Category (In Million Pesos) 132% 35% Sources: SEC, BOI, NERBAC-Davao

4. The Operating Environment Investments Major Investments 2009 Source: BOI and Davao City Investment Promotion Center • Abreeza Property Development (partnership of Ayala Land and Antonio Floirendo Group (Anflocor) • Robinson’s Supermarket Property Development and Retail (Gokongwei Group) • 8990 Housing Development Property Development, Mass Housing • Davao Fiberboard Packaging Export of Corrugated Carton Boxes • SL Agritech Production of Hybrid Rice Seeds • DMC Urban Property Dev’t Property Development, Mass Housing • Invent Foods Mfg. Agriculture Products Processing (Herbal Coffee) • Granstar Motors and Ind’l Assembly, Manufacturing of Motorcycles • Freshmax Corp. Export of cavendish banana • PSoft, Inc. IT, Software Development • Macondray Plastics Manufacturing of banana cluster packing

5. The Operating Environment Investments Investments-in-the-Pipeline • Feed Factory; • Packaging Plants; • Banana Plantations (est. 5,000 hectares); • Banana Chips; • Pineapple production (est. 2,000 hectares); • Vegetable farms (est. 15,000 hectares); • Real Property Development; • Energy; • Information and Communications Technology / BPO(software, medical transcription, call centers); • Computer Assembly; • Activated Carbon; • Mining and Trading; • Cold Storage; • Wood Processing; • Aquaculture; • Durian production and processing; • Health Service Facilities / Hospitals; • Cacao Processing Facility; and • Palm oil processing.

6. The Operating Environment ExportsDavao Region, Second Quarter 2008 & 2009(in million US$) 286.2 186.3 2008 2009 Source: NSO

7. The Operating Environment DTI-XI Milestones: Exports Generated Through the Export Pathways Program (EPP) Coco peat blocks (Taiwan); Lady’s bags (France); Black nachi and garden white stones (Japan) Cacao beans (U.S., Netherlands and Malaysia) Banana flour (Korea) Microwavable banana/turon (U.S., Japan, M.E.) Coconut sugar (U.S., Canada) Bamboocraft (Japan) Virgin Coconut Oil (U.S., Netherlands) Coco fiber and coco peat (China, Taiwan) Fresh and Processed Mango (Japan) More non-traditional products are being developed for export Source: NSO

8. The Operating Environment Exports-in-the-Pipeline • Virgin Coconut Oil to Europe • Other Coconut Products (e.g. RBD, Dessicated) to Europe • Cacao beans from Davao del Sur to The Netherlands • Fresh Banana (Cavendish) to Japan and China (Direct link of small farmers group to market) • ICT: U.S.$ 100 Million booked contracts for BPOs (ICT Davao) Trade Facilitation The Davao Industry Cluster Capacity Enhancement Program of DTI-XI, through the Banana Industry Cluster, was able to procure and distribute organic fertilizer for use in banana plantations, a project of the Federation of Banana Growers Cooperatives (FEDCO). It has also linked with Marubeni Corporation for possible supply of Cavendish banana to Japan.

9. The Operating Environment Labor & EmploymentDavao Region, July Labor Force Survey 2008 & 2009 43% 45% Source: NSO

10. The Operating Environment Inflation Rate Davao Region, January to September 2008 and 2009Base Year = 2000 2008= 10.1% 2009= 4.8% 2009 Inflation Forecast = 6%-8% Source: NSO

11. The Operating Environment Major Infrastructure Projects The top 3 projects were: • Maramag-Bunawan 230 Kv Transmission Backbone Project valued at P3.2 billion • Rehabilitation/Improvement along Surigao-Davao Coastal Road valued at P2.7 billion • Improvement and Concreting of Kapalong-Talaingod Road Contract Package valued at P2.1 billion

12. Development Prospects Trend on ‘healthy’ and environment enhancing projects continue to be the focus in world trade Standards promotion: Organic, Rainforest Alliance, Halal, Kosher Increased awareness on Corporate Social Responsibility as a key to sustaining backward-forward integration in industries Entry of major retail chains will spur MSME activities BOI project commitments to the region reach a total amount of P1.8 billion BPOs continue to expand making Davao Region the prospective Hub of e-services in Mindanao

13. Development Prospects Non-traditional products finding their way to niche markets Employment rate to remain high due to government’s continuing efforts in job generation Continued pump-priming of infra projects Inflation rate to taper off

14. Development Prospects Non-traditional products finding their way to niche markets Employment rate to remain high due to government’s continuing efforts in job generation Continued pump-priming of infra projects Inflation rate to taper off

15. DTI-XI Plans and Programs CY 2010

16. Development Thrust Promote international competitiveness Promote expansion / diversification of existing industrial structure Promote expansion of growth industries Provide support for linkages between SMEs and leading Philippine industries Help improve access to financing Streamline programs and incentives Harmonize implementation of SME policies Build the capacity of institutions assisting SMEs Development of Women Entrepreneurs

17. Strategies MFO 1 Strengthening Exports and Domestic Trade • Intensify market intelligence and research • Enhance trade for existing products • Identify and develop additional products with high growth potential • Improve operation of EPP through enhanced client-focused assistance and apply initiatives to enhance business environment • Enhance SPIN implementation by developing and marketing raw materials/components • Further develop and deploy designers pool

18. Major Activities MFO 1 Strengthening Exports and Domestic Trade • Reverse Trade Fair, in partnership with ARENA • Davao Trade Expo 2010 • Mindanao Trade Expo 2010 • Product Depot Mindanao / Cultural Village • Participation to Regional Fairs in Luzon and Visayas • Kadayawan Treat/Exposition in Manila (Niche marketing activity @ Shangri-la / Serendra) • Kadayawan Trade Fair • Updating Regional Export Action Plan (more client-focused) • Deployment of Designers Pool: Focus on Packaging and Labeling • Market Research for new industries (i.e. bangus, high value fish)

19. Strategies MFO 2Investment Generation and Industry Development • Sustainable image-building program for Davao Region • Carry out the Regional Development Council thrust on the Competitive Quartet: • Agribusiness, ICT, Ecotourism, Mining • Maintain existing priority industry clusters and identify new potential industries for promotion • Expand NERBAC operations in the provinces • Streamline Business Processes throughout the region • Enhance the capability of Investment Promotion Officers (internal and external) • Enhancing Private sector participation in Investment Promotions • Promotion of environment enhancement projects

20. Major Activities MFO 2Investment Generation and Industry Development • Full implementation of the 3 industry clusters (machineries, livestock and poultry, and biofuel) • Development of new industries using the clustering approach (e.g. aquamarine, abaca) • Establishment of NERBACs in provinces • E-BPLS implementation based on national standard • Foreign Investment Mission • CEO/Investor Dialogues (Top 20 companies) with DTI, NEDA, MBC, etc. • Establish links with private & gov’t sectors for regular consultations • Region-wide and Province level dialogues • Dialogues with CEOs external to RXI (promotion strategy) • Information and Communications Technology Mission • Green Movement – tie up with MFO 4 • Property Fair • Investment Promotions: • Organization of Investment Promotion Officers Network Quality Investor Assistance Training • Investment Project Packaging • Strengthening Knowledge Management • Website Development • Industries in Focus: Virtual Poultry, Saba Banana, Pangasius and RODG-identified priorities

21. Strategies MFO 3 MSME Development • Increased competitiveness for MSMEs through technology application and financing support • Strengthening industry associations and MSME-focused institutions • Big brother-Small brother linkages • Local Regional Economic Development Program • Entrepreneurship Development • Women empowerment

22. Major Activities MFO 3 MSME Development • OTOP • Product depot institutionalization (benchmark: Tiendesita’s) • Product differentiation (value chain approach) • Promote innovations: New technologies, new packaging, new inventions • Evaluation and Assessment of OTOPs • Categorization of products; Graduation of OTOPs • Identify and give focus on other OTOPs • Introduction of “Angel” MSMEs concept • Organize Regional SMED council; Crafting of Regional SMED Plan • Financing • Non-traditional /alternative financing schemes • Credit surety fund of BSP, NLDC, PCFC • Intensify promotion of Intellectual Property (prioritizing IPO for new products developed) • Institutional strengthening for furniture, cut flowers, etc. sectors • Policy advocacy and strengthening on industries to be promoted • Institutional Strengthening and linkaging • Reorganization of PhilExport Davao • Enhance institutional linkaging (e.g. TLRC, DOST, etc.) • Tapping of volunteer consultants from other countries (PUM, etc.) • Go-Negosyo Seminar/s • Asenso Ka! Magazine (possible tie-up with private sector) • TECHIE Seminars for MSMEs

23. Strategies MFO 4 Consumer Welfare and Protection • Intensification of CASH Lifestyle • Strengthening consumerism • Institutionalization of Green Movement • Green Bag Project (bayong project tie-up) • Strengthening of CW Desks • Continue implementation of palengkenomics • Policy Advocacy: Consumer Development Fund • Innovating the Presyo Diskwento

24. Major Activities MFO 4 Consumer Welfare and Protection • CASH-L • Increase number of members/practitioners • Expansion of network • Advocacies: Health, Water and Waste Disposal • Consumer Conference • Capacity building for CW Desks • Conceptual Framework on Consumer Development Fund • Green Bag Project raw materials sourcing: Romblon, Kalakat, Banana fiber. • Institutional partnership (e.g. DepEd); Adoption of CWD modules in academe • Re-strategizing the activities for the consumer month • Benchmarking on sustainable and healthy products production and promotion

25. Strategies MFO 5 Good Governance • Improvement of Quality Management System • Human Resource Development • Health and Wellness • Intensify information dissemination (multi-media) • Strengthening of Speakers and Trainers Pool

26. Major Activities MFO 5 Good Governance • Radio Program (infuse ‘entrepreneurship’ theme, e.g. negosyo atbp.) • DTI Anniversary (‘green movement’ theme) • Presyo Diskwento • Asenso Ka! Magazine (possible tie-up with Smart/Globe, etc., OSEC funding) • Planning: PDCA and Results-based Strategy • DICCEP: Successor Project (for continuity) • HR • Competency Gap Assessment and Inventory of competencies • Succession Planning • Supervisory and Leadership Trainings • Blue Ocean Workshop • QMS Trainings (Root Cause Analysis, Process Improvem’t) • ‘Green Movement’ Trainings • Benchmarking • GAD trainings • Resource Generation: KR2, JICA and other ODA funds

27. Strategies and Goals, 2011-2013 MSME Development SPIN institutionalized: Big brother-Small brother tie-ups Industry Associations Strengthened Non-traditional financing schemes accessed Regional Investment Promotion Program improved (Private Sector-led) LRED in the provinces/cities fully implemented Corporate Social Responsibility directed towards industry development Development and Organization of Women Entrepreneurs Products and Services with high value-added increased Increased MSME Productivity and Competitiveness Increased GRDP Growth