The island and province that will benefit most from the strong post-pandemic economic recovery of the Philippines is Palawan. It combines the two most important sectors that are given the highest priority by the new Administration of President Marcos Jr.: agribusiness and tourism. In fact, Palawan was already the epicenter of what former Secretary of Tourism Bernadette Puyat Romulo was trying to promote aggressively, i.e. agritourism. Here, we have to recall that agribusiness is not limited to farming but comprises the whole value chain involved in food security: from farming or fishing, post-harvest, warehousing, logistics, cold storage, processing, retailing up to the final consumers. If the Local Government, the business sector, and civil society put their efforts together to make full use of the abundant natural resources of this biggest province in the Archipelago, they will be among those to help most the present Administration to achieve the goal of bringing down the national poverty incidence of 18% today to single digit by the end of the present term in 2028. Agribusiness and tourism are the two most job-generating sectors of the economy.
In 2018, Palawan received 1.8 million tourists, a 21% increase from the year before. As domestic tourism is already bouncing back (revenge travel of Filipinos families) we can expect this island that has been rated by international publications as the “best island resort in the world” to be among those to be most visited. Palawan is rated by the Conde Nast Traveler Readers as the most beautiful island in the world and was also considered by the National Geographic Traveler Magazine as the best island destination in East and Southeast Asia in 2007. It is also one of the most biodiverse (terrestrial and marine) islands in the Philippines. It also has been ranked as having the best beaches in Asia.
It also must be noted that it is the only island other than Luzon that has three international airports to which foreign tourists can fly directly without having to stop over Manila or Cebu. Palawan could be among the first to benefit from the recently amended Public Service Act (PSA) which allows foreign companies to own 100% of airports, seaports and other transport facilities as well as telecom enterprises. It will not be long before such global infrastructure companies as Acciona (Spanish), GMR (Indian), Balfour (USA) and others will be looking at opportunities to build world-class airports in Palawan in such attractive tourism destinations as Coron, Puerto Princesa, San Vicente, and others that are being identified by the Provincial Government. It also helps that there are already luxurious resorts like El Nido, Amampulo andBugsuk Island that have their own private airports. Setting an example in diversifying markets to include middle-class tourism is the Lio Island resort developed by the Ayalas. There will come a time when Palawan will be a tourism destination for both luxury and mass tourism, especially as more and more modern airports and seaports are built by both domestic and foreign investors.
As Wikipedia reports, Palawan’s economy is basically agricultural. The three major crops are palay, corn and coconut. There are also mineral resources such as nickel, copper,manganeseand chromite. With the very high prices of these minerals in global market today, resulting from the ongoing Russian-Ukraine war, there will be profitable opportunities in mining that can be responsibly exploited by the mining companies. They are enjoying a more favorable attitude towards mining of President Marcos Jr. who rightly approves responsible mining as a means to generating jobs and obtaining much needed foreign exchange reserves. Palawan also has one of the richest fishing grounds in the country. About 45 % of Manila’s supply of fish comes from the province. Palawan is also the only oil producing province in the country.
Given the appropriate investors, especially from Taiwan and Malaysia, Palawan could be among the first to respond to the imperative of diversifying our crops away from palay, corn and coconut. There should be renewed efforts of the Government, in tandem with local investors in agribusiness, to position the province as a site for large-scale corporate farming in cacao, coffee, palm oil and a host of fruit trees like avocado, durian, langka, pomelo, etc.The demand for fruits will grow rapidly as most of the countries in the Indo-Pacific region join the upper-middle income category the moment they attain per capita incomes between $4,000 to $12,000 as the Philippines will do in the next two to three years.
Palawan can also lead in another indispensable means for improving the productivity of the agricultural sector, the highest priority in the Administration of President Marcos Jr. It already hosts in the southern town of Brooke’s Point the pioneering agribusiness enterprise called Cardinal Agri. Working in tandem with thousands of small coconut farmers, Cardinal Agri has improved the lot of some of the poorest of the poor in the country by helping them consolidate the farms into bigger units so that they can come out with higher-value products such as coconut water, coconut milk, coconut sugar,virgin coconut oil, and other by-products of the coconut tree. In its website, Cardinal Agri states that it is dedicated to partnering with local farming industry and its workers towards a more sustainable and effective paradigm. It operates across the agribusiness spectrum, including the farming, processing and marketing of premium tropical crops. I learned from the provincial office of Palawan that there are more enterprises that are planning to follow the example of Cardinal Agri. This will revolutionize the coconut industry in the Philippines in the same way that the FELDA and FELCRA models of palm oil production revolutionized that industry in Malaysia. In fact, I know of agribusiness enterprises that are also considering converting some vast land areas of Palawan into palm oil farms after they have established successful palm oil plantations in Mindanao.
Needless to say, the agribusiness and tourism sectors as the engines of sustainable and inclusive growth of Palawan will be handicapped if there are not enough and reasonably priced energy, telecom and transport services in the island. Fortunately, during the Duterte Administration, the Build, Build,Build program endowed the whole island with abundant roads and bridges that connected the farms to their respective markets and enabled tourists to reach some of the most remote tourism destinations. A Singapore-based energy WEnergy has been busy building off-grid solar energy modules that served as micro grids to electrify such tourism destinations as the underground river in Puerto Princesa. This producer of renewable energy is committed to build more microgrids in other remote areas that are attractive to tourists. Something similar can be done by foreign companies that are involved in installing micro-grid telecom services in some of the close to 2,000 islands in the Palawan network. Again, some of these telecom campaniescan be foreign and can own as much as 100% equity of the business.
The LGU, however, cannot assume that rapid growth of regional GDP (6 to 8 %)that can happen In Palawan will trickle down automatically to the poorest of the poor. Direct intervention in helping improve the quality of public education and health services, as well as direct assistance to small farmers and microentrepreneurs must be provided. The LGU should exhaust all possibilities to partner with the appropriate NGOs and social enterprises that are working to improve the lives of poor farmers and small business people. Among them are the Angat Buhay movement of former Vice President Leni Robredo and the GoNesyo movement of Joey Concepcion. Efforts should be exerted to tie up with the SM Foundation and other similar private foundations whose mission is to help small farmers and other interested individuals to engage in the growing of high-value vegetables and other food crops so they can supplement their incomes and contribute to food security. The LGU should also assign the highest priority allocating part of the windfall they will get from the Mandanas-Garcia rule to improving the quality of public education and public health byaugmenting the salaries and benefits of teachers and health workers. I am very glad that very early in his tenure as Governor of the Palawan Province, Governor Dennis Socrates convened last August 17 to 19 a conference called “Usapang Palawan” which convened representatives from local government officials, the business community and civil society to help in preparing a strategic plan for the next three to five years for the socio-economic development of the province.
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