Tuesday, September 25, 2007 Setting up of P50 billion investment fund urged
GENERAL SANTOS CITY -- To pave the way for further investments in the Southern Philippines, a noted agribusiness leader has proposed, among others, the establishment of a private sector-led Mindanao Investment Fund (MIF) with an initial resources of at least P50 billion.
Senen Bacani, last year's Ernst and Young Entrepreneur of the Year winner, lamented how investments come in trickle to Mindanao over the last several years due to negative perceptions of peace and order stability.
Bacani, former secretary of the Department of Agriculture in the Aquino administration, urged the private sector and the government to pool their funds for the creation of the MIF as a strategy to entice more domestic and foreign investments in the island.
"The fund...can invest in existing businesses which require capital for expansion and some greenfield (agriculture) projects. The investment mix should be such that the projected economic returns are attractive enough for investors," Bacani told participants to the 16th Mindanao Business Conference here that ended on Saturday.
"In a way, we are pooling resources and diversifying the risks and returns," he added.
Bacani suggested that 51 percent of the fund must be raised by the private sector and the 49 percent by the government or foreign financial institutions or donor countries.
He noted that 60 percent of the total fund has to be Filipino so that any constitutional limitations are not breached in any investment opportunities.
"This Mindanao Investment Fund can be an option for many investors who do not want to come to Mindanao for individual projects," Bacani stressed.
He contended that most of the significant investments in the country are located in the different economic zones outside Mindanao due to perception problems of the island.
To contain this trend, Bacani, whose group successfully ventured into banana in the former war-torn town of Datu Paglas in Maguindanao province, also proposed the declaration of the whole of Mindanao as a special agro-industrial zone.
Likewise, he called for additional fiscal incentives to entice agribusiness investors to put their money in Mindanao, which is dubbed "The Land of Promise."
Bacani asserted that with a few exceptions, the people with resources hesitate to invest in the island's agriculture potentials due to the prevailing peace and order problems in some areas in Mindanao that have plenty of good but idle or under-utilized lands.
On the other hand, Bacani outlined three vital issues that need to be addressed if Mindanao has to improve its performance in agriculture.
The first is population planning, which Bacani pointed out needs to be reviewed in terms of policies.
With an annual average population growth of 2.5 percent, he said that food production must also be accelerated to avert undernourishment and hunger.
Secondly, Bacani said that good governance must also be taken into account since business investment decisions are also influenced by perceptions on how policies and programs are executed in the national and local levels.
The third issue he cited was human resources needs. Bacani explained that the average Filipino farmers are getting older.
"Our young people working (in) the farms, if given a choice, no longer want to continue working in the farms. It is perceived as too much hard work with no commensurate benefits," he said.
With this trend, Bacani warned the agriculture sector is facing a future where there will be lack of manpower in the farms unless work in agriculture will be perceived by young people as rewarding. (BSS)
