Mindanao connectivity to ASEAN revived

Manila Bulletin
by Bernie Magkilat
August 5, 2014

Mindanao is being revived as the new gateway to Southeast Asia this time with more vigor with real connectivity by air and sea underway on hopes that manufacturing operations will further thrive with new power capacities coming in.

Rey Billena, regional governor for Mindanao of the Philippine Chamber of Commerce and Industry (PCCI), told reporters at yesterday’s press conference for the 23rd Mindanao Business Conference (Minbizcon) on September 1-3 in General Santos City that Mindanao is poised to deliver the Philippines to Asean in 2015.

Already, Mindanao will be connected to Bitung, Indonesia through General Santos City with the maiden voyage of cargo vessel P.T. Kanaka of Surabaya by August 30 this year. The commercial shipping service will operate twice-monthly with a 200 twenty foot equivalent container capacity.

This new sea route will serve as transshipment port for goods coming from China to Jakarta. It will substantially reduce travel time to 8 days from 18 days for cargoes from China to Jakarta, Surabaya and Bitung.

Aside from carrying export products from Mindanao, P.T. Kanaka will also shuttle container vans from Davao, GenSan and Bitung. The GenSan port, though highly underutilized, also requires upgrading since it does not have cranes that would unload cargoes but are instead utilizing vessel-mounted cranes.

Bitung, already an international port, is only 350 miles away from GenSan and 15 minutes by plane.

The Davao-Bitung Ro-Ro project was made possible with the signing of a Memorandum of Cooperation between the Davao City and Manado Chambers of Commerce and Industry during the Davao Investment Forum in November 2012. Trade Secretary Gregory L. Domingo endorsed the project. This service is core advocacy of the Philippine Consulate General in Manado, in anticipation of increased trade between Southern Mindanao and North Sulawesi.

At end-2013, Indonesia was the Philippines’ 11th biggest trading partner with total trade reaching $3.51 billion. In terms of air connectivity, Billena said that air service is also expected to resume by the first quarter or second quarter of next year connecting Davao and Manado.

“We have concrete discussions with two airline companies, one Filipino and one Indonesia,” he said without identifying these airlines. Three airlines – Mindanao Express, Garuda of Indonesia and Lion Air – initiated flights in 2007 but they stopped due to difficulty to build up traffic.

“Hopefully, with manufacturing firms such as tuna canners also putting up manufacturing operations in Bitung we can build up traffic this time,” said Billena, a retired country manager of a joint venture company by San Miguel Corp. and The Cocal Cola Company. The connectivity of Mindanao to Indonesia is part of the Mindanao Development Authority to create three growth corridors in the region with Zamboanga City serving as as gateway to the East Asia Growth Area and a trading hub while Cagayan de Oro will serve as business center for agri business and GenSan in southern Mindanao as food and logistics hub.

Already, investments in power generation in Mindanao are expected to adequately serve the Mindanao’s power requirement to support its growth. The region is projected to require 3,000 gigawatts by 2030.

Some capacities from Aboitiz Power, San Miguel Corp., Sarangani Power, FDC in Cagayan de Oro may be frontloaded between 2015 and 2016 while a total of 1.7 GW shall be on stream by 2018 or 2020 instead of 2030. source