June 12, 2016 9:15 pm by Voltaire Palaña
San Miguel Corp.
(SMC) and the Autonomous Region in Muslim Mindanao (ARMM) have signed a
memorandum of understanding (MoU) to help develop the region through
investments in industries ranging from energy to ports and bulk water
facilities.
SMC President and
Chief Operating Officer Ramon Ang and ARMM Gov. Mujiv Hataman struck the deal
on June 8, which initially establishes an agreement for Ang’s SMC Global Power
to build a power plant in ARMM to help provide long-term solutions to
Mindanao’s power crisis.
Ang said ARMM
represents one of the most under-penetrated markets in the Philippines, “but is
a region ripe for investment offering huge potential growth.”
San Miguel’s
investment in ARMM is in line with its strategy to locate facilities and
production centers outside urban centers, creating strong “second-tier cities,”
generating jobs, and rebalancing the national economy by income and growth
dispersal, Ang.
San Miguel has
committed to build a power plant over the next two years that will serve the
estimated 573,446 households across the entire ARMM region. At present, only 30
percent of households in the region have electricity. Brownouts, particularly
during the summer months, are frequent.
No financial or
technical details of the proposed power plant were provided. As of now, rapid
assessments and feasibility studies will be conducted to determine sources of
power, the capacity, and viability of existing power plants in ARMM.
On a nationwide
basis, SMC’s power generation company has set a goal to build P200 billion worth
of power plants across the Philippines for an additional 1,200 megawatts (MW)
to the grid.
‘Vote of confidence’
Instability, lack of
infrastructure, and lack of a stable power supply has made investors wary, but
Ang said that he hoped San Miguel’s vote of confidence in the troubled region
would create much-needed jobs and entrepreneurial opportunities, and ease
worries over perceived investment risks.
“San Miguel has shown
great vision by choosing to invest in ARMM. Over the next few years, we’re going
to see what can be achieved when the private and the public sector work
together with the best interests of the local communities at heart,” Hataman
said.
Hataman’s office
highlighted the P37 billion in terms of infrastructure investment in ARMM
during his tenure, which has provided more than 1500 kilometers of roads and
other vital infrastructure like ports and water supply systems.
However, the weakness
of ARMM that prevents it from building industries like rubber processing
plants, seaweed processing plants, sardines factories, ice plants to prolong
fish catch value, and coconut processing plants, is its shortage of power, both
Ang and Hataman pointed out. Unlike roads, agriculture and fisheries, no
department is tasked to resolve the power crisis in ARMM since power is
private-sector led.
ARMM is comprised of
Basilan, Lanao del Sur, Maguindanao, Sulu and Tawi-Tawi.
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