Enhancing trade relations with Cebu

I'm currently writing the speech for a local diplomat who will soon be talking to a group of prospective foreign investors.

I'm sharing with you a rough draft of her speech so you will have an idea on why investing in Cebu is a wise decision for any astute investor.

Honorable guests, ladies and gentlemen, good morning.

I was agonizing the past few days on how best to present the Philippines, especially Cebu, to a group of businessmen and diplomats who do not speak my native language and who may have a certain preconceived opinion of my country based on reports from the international media.

But then I realized that there is so much more in common between us. And whatever differences there are, these will eventually be prevailed upon by our intense desire to connect with our markets and succeed in the international business arena.

Not many know that former Philippine President Ferdinand Edralin Marcos and USSR President Nikolai Viktorovich Podgomy signed the joint communique formalizing diplomatic relations at the Kremlin’s Vladimirsky Hall in Moscow on June 2, 1976. In fact, fewer people know that the history of the Philippines and Russia goes back for almost five centuries.

According to Prof. Vladimir Makarenko of the Moscow State University, the archipelago making up the Philippines was known to Russians even during the days of the embryonic Russian state of Muscovy in the early 16th century. Perhaps taken from accounts principally by Chinese, Japanese and Arab traders, these islands were known collectively to Russians as Ma-1 or Lukonia.

From these hazy beginnings the Philippines entered into Russia’s recorded history through accounts filtering back to Moscow of the first circumnavigation of the world of renowned Portuguese explorer Ferdinand Magellan in April 1521.

Magellan’s voyage spurred wide interest among European leaders who saw enormous trade potentials in the new route. De Moluccis insulis eventually found its way to Russia and was translated into Russian presumably between 1525 and 1530. The Saltykov-Shehedrin State Library in St. Petersburg is believed to keep a copy of the manuscript. The Russians translation is attributed by scholars to Dmirry Gerasimov, the ambassador of Grand Prince Basil III Ivanovich of Muscovy (1479-1533) to the Papal See in Rome.

Thus, Russia learned about the existence of the Philippine archipelago and its inhabitants at the same time as in other European countries. In succeeding years, more information was gleaned from a variety of other sources through the Vatican, New Spain (present-day Mexico), Spain and also through China and other Southeast Asian countries which had been trading with the islands since olden times. It was through these channels that Russia learned about the eventual conquest and settlement of the Philippines by Spaniards in the late 16th century.

It would take more than another 150 years before Russia showed any interest in opening diplomatic relations.

It is remarkable how the recently concluded 12^th ASEAN Summit has thrust the Philippines, particularly Cebu, into the consciousness of the international business community.

We knew the amount of media mileage such an event would generate. Still, it came as a pleasant surprise when several foreign diplomats and businessmen, particularly those in Europe and Asia were expressing interest in opening or strengthening trade relations with Cebu.

The ASEAN Summit publicity came at a most opportune time when the Philippine national government had a new development planning strategy in strong partnership with the Local Government Units (LGUs) in a bid to spur economic growth in the countryside and eventually lead the Philippines to achieving First World status in the next two decades.

President Gloria Macapagal-Arroyo has said that her vision for the country would come from the perspective of the Regional Development Councils (RDCs), thus paving the way to a greater participation of the LGUs in development planning, much to the delight of the local executives.

The President eschewed the usual central/national point of view and opt to create a development program from the perspective of the regions to bolster education, invest in infrastructure and encourage greater investments all over the country.

In the process, the regional leaders and sectors have intensively participated in the planning, monitoring and fine-tuning development programs and projects in their regions. They also have pinpointed the strengths of their regions and the corresponding priority projects and programs essential to the development of their mega-region’s "own natural advantage" from which the government could build on.

The enlarged grouping of the regions will boost economic and market potentials beyond what each region can generate, with economies of scale, synergies and complementation that will be more attractive to investors.

In addition, a large resource base of each mega-region will be available for the provision of social services and pump-priming infrastructure, particularly for the poorer provinces.

Our president viewed the mega -regions as the "harbinger of First World status" for the country in the next two decades as the strategy entails the massive devolution of development from the national to the regional level, thus breaking the bureaucratic clog that impedes local progress and spells a quantum leap in investments and jobs.

The recent planning tact had put together a series of development packages, identified the areas for investments as the government embarks on "an enlarged economies of scale."

North Luzon would be developed as the agri-business center in the North, Metro Luzon would be the urban beltway, Central Philippines as RP’s tourism hub, and Mindanao as the agri-business center in the South.

This economic development template for the Philippines gives you an idea of where you could place your investments.

Russia is a very important country to the Philippines as trade partner.

Thus, it is worth every effort to look more closely at products of

interest to both sides.

In the Philippines, the preferred investments activities are those that focus on healthcare and wellness products & services, information technology and communications technology, electronics, motor vehicle products, energy, infrastructure, tourism, shipbuilding/ shipping, agriculture, fishery and support services, research and development/ training institutions, machinery and equipment, raw materials and intermediate inputs.

The Russian group that recently visited Cebu was interested in the province’s custom designed furniture that are made of indigenous materials found only in the Philippines. They also looked at the Philippines-produced tropical fruits and aquaculture products which they intend to distribute to the Siberian areas. I believe there are many more local products that would be of interest to them.

Economic growth in Cebu remains robust. In fact, Cebu is the only province that exports more than it imports. This export record represents around 10% of Philippine exports.

Although electronics consistently ranked number one in Cebu for the past years, contributing 33% in 2006 to total exports, provincal exports has slowly diversified to other Industries. This means that other industry sectors have gradually expanded such as fashion accessories and furniture.

Cebu’s ten export markets last year include: Japan, USA, Hong Kong, China, Netherlands, Singapore, Hungary, Indonesia, United kingdom and France.

This economic success of Cebu is the result of positioning, serious, planning, an industrious population and local governments who understand the needs of business.

This success will continue, and to facilitate this growth, our provincial government has implemented several projects.

The connection of Cebu to geothermal power grids from neighboring islands will ensure that supply of cost effective and reliable electricity will continue.

The construction of dams at strategic sites will maintain adequate water supplies.

New road construction projects will improve access and continuing program of road widening and bridge construction will keep traffic moving.

Ongoing investment in world class accommodation will ensure that Cebu emerges as the preferred Tourist and Convention destination in the region.

Most importantly, the development of more special economic zones with incentives for investors ensures industry will continue to profit by being based in Cebu, the Philippines' best seller.

Whenever I meet foreign businessmen and invite them to invest in Cebu, they often ask: WHY CEBU?

There are several good reasons why we are number one.

There is a reason why this small island leads the entire country in exports of furniture, fashion accessories, carageenan, gifts, toys, and houseware.

There is a reason why Cebu consistently gets the biggest chunk of tourist arrivals yearly, and has become the tourist gateway to Central and Southern Philippines.

Here’s an interesting trivia you may want to know: Russia’s birds have been tourists in Cebu for several years. They come here to escape the bitter Siberian winters. You could take that as a cue.

It’s not just a tourist destination.

In the last decade, foreign businessmen have arrived at another reason for coming to Cebu. Because of facility in the English language and good customer relations, they are considering Cebu as an IT services hub.

There is a reason why Cebu is fast becoming the I.T. and call center capital of the country.

Why Cebu?

Perhaps because the island is naturally situated to become the center of all this action.

It is a natural port. More than 80% of inter-island shipping capacity is based here, on this small island. It is the most accessible place to and from all points in the country, with more domestic air and sea linkages than even Manila.

It is naturally safe. It does not lie within any earthquake zone or typhoon belt. There are no volcanoes on the island.

It has the necessary, well-balanced infrastructure to remain competitive, and to sustain development. And yet, within minutes from its cosmopolitan quarters, you are immediately transported to resort settings and natural wonders.

Why Cebu?

Most of all, because of its PEOPLE. An independent, self-reliant, entrepreneurial culture pervades the island, which makes its people eminently positioned to seize the opportunities that nature presented it.

We have a highly educated workforce geared towards non-agricultural lines, the reason why Cebu has become the center of global attention for services and information technology.

We are naturally peaceful. We have among the lowest crime rates, and the best peace and order records of all cities and provinces in the Philippines.

Why Cebu? The Island. Its People. We have had four centuries of being discovered by the world. And we invite you to discover today - this island, this people.

When Cebu was "discovered" by Ferdinand Magellan in 1521, it was truly a discovery, for it opened the eyes of the world to what it did not expect to see.

We had been a bustling trading post in Asia, long before the first of his ships landed, positioned right in the middle of what was to become the Philippine Archipelago.

The island, with its natural port, was a logical destination, and its people, so steeped in the ways of trade and commerce, were its greatest natural resources.

Fast-forward 436 years, and Cebu remains a discovery. It remains that one bright spot, situated right at the center of the Philippine archipelago.

Cebu is the fastest growing economy in the country, with an average growth rate significantly higher than that of the entire nation, and any other province. It leads 78 other provinces in gross assets, equity and total income.

Why Cebu ?

Why not Cebu? Any astute investor would want to invest in a winner.

(diplomat briefly states her plans for the enhancement of the Russia-Philippine Trade)

The fact that you have given me this chance to make a presentation on Cebu and the Philippines, the same places that used to be relegated to the peripheral consciousness of foreign businessmen. The fact that you have made the effort to learn about our country and people, gives me confidence that Philippine-Russia trade relations will flourish.

We have a lot to benefit from this trade relationship. If we carefully nurture it, we could get more than what we expected.

Thank you and good day.