“Government has to look into the fundamentals of starting a business because businesses are having a hard time getting permits due to the centralized regulations,” Mindanao Business Council Chair Vicente T. Lao said in an interview.

Mr. Lao cited as examples the import commodity clearance (ICC) and mining permit, which both need a signature from agency head offices in the capital.

“While (ICC) has been devolved to the local office, it still needs the signature of Manila,” said Mr. Lao who is in the export, mining and construction businesses.

“Even mining permits from the Department of Environment and Natural Resources have been devolved, but the regional director cannot approve the permit without clearance from Manila,” he pointed out.

Mr. Lao said the centralized system does delay the process and makes it more costly to do business outside the capital.

“We have to go to Manila several times and you know it is very expensive to stay there,” he added.

Meanwhile, Undersecretary Janet M. Lopoz of the Mindanao Development Authority (MinDA) said while there is a need to provide a regulatory environment that is more conducive to business and investments in Mindanao: “we cannot wait for these challenges to be solved before we move forward.”

She urged the business sector to look into current business models that can operate and generate more jobs and investments for Mindanao amidst the constraints.

“We should move forward while we try to solve these challenges because it might take decades to do that,” Ms. Lopoz said.

CABOTAGE LAW
Mr. Lao said despite the enactment in July this year of Republic Act (RA) 10668, which amended the Philippine’s 50-year-old Cabotage law, alongside RA 10667 or the Philippine Competition Act, “there are offices that still make it hard to do business in Mindanao.”

RA 10667 provides for a national policy that “prohibits anti-competitive agreements, abuse of dominant position and anti-competitive mergers and acquisitions” while RA 10668 “allows foreign vessels to transport and co-load foreign cargoes for domestic transshipment.”

“Prior to the signing of RA 10668, foreign vessels were not allowed to ship goods (from domestic ports) bound for Mindanao so we had to settle for local shipping companies that offered one of the highest shipping rates in the world,” Mr. Lao said.

But four months after the signing, Mr. Lao said the law remains unimplemented because of the pending IRR.

“Foreign vessels still cannot ship here because there are no guidelines,” he said.

In a recent committee meeting of the Joint Enabling Secretariat-Inclusive Business in Mindanao (JES-Ibim), Mr. Lao urged World Bank officials to make a “gentle push to the government for the implementation of the new Cabotage Law.”

The JES-Ibim meeting was attended by officials of the World Bank, Philippine Business for Social Progress, MinDA, and members of the business sector.

“This is the reason why there are no processors here because of our problem with high shipping costs,” said Mr. Lao, adding that the power supply problem in Mindanao is another contributing factor.

“This is a fundamental problem that the government should first solve if we are to move forward in Mindanao,” he said.

In a separate interview, an official of the National Grid Corporation of the Philippines (NGCP) said it is putting up additional transmission lines in preparation for the increased power supply that will come from several new coal-fired power plants that are scheduled to go online beginning this year to end-2016.

Milfrance Q. Capulong, NGCP regional corporate communications officer for south Mindanao, said there are various projects such as the Matanao-Malita 230-kilovolt (kV) line in Davao del Sur, Matanao-Gensan 138-kV line, those in the Caraga Region, and the new sub-station in the southern part of Davao City.

“The intention is to expand and to improve reliability and quality of power transmission services,” Ms. Capulong said, but did not give an estimate on the investments being made by NGCP for the Mindanao grid. — with a report fromMaya M. Padillo