Edge Davao 7 Issue 195 - Special Issue

VOL. 7 ISSUE 195 • SUNDAY - MONDAY, DECEMBER 14 - 15, 2014

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S the year draws to an end, Davao City looks ahead to more investments in 2015.

Significantly, Therma South Inc. (TSI) the coal-fired power plant of AboitizPower, is scheduled to make a much-anticipated debut next year.

There is much agog over TSI’s anticipated impact on the local power industry, its valuable addition to power supply for Mindanao and its resultant taxes which have implications on the revenues of Davao City and neighboring Davao del Sur. But that is going ahead of the story.

As of September this year, the 300-MW thermal power plant in the boundary of Davao City and Sta. Cruz, Davao del Sur was already more than 90 percent complete.

That means, the plant should be all set to go full throttle by early next year.

TSI president Benjamin A. Cariaso Jr. said that all major components and equipment, as well as the switchyard that will connect the power plants to the transmission assets of the National Grid Corporation of the Philippines (NGCP), are now close to completion. It is estimated that the commercial operations of the power plant is on schedule for first half of 2015.

Davao City Investment and Promotion Center (DCIPC) head Ivan C. Cortez said that with TSI’s fullblast operation next year the city can go forward with an uninterrupted power operation.

“In investment promotion we can now answer queries on stable power supply since it is one of the main requirements in promoting the city,” Cortez said.

If the city does not have a stable power supply, it will disappoint prospective investors, he said.

The DCIPC has received many inquiries of and intention to invest

POWER

EDGEDAVAO YEARENDER THE YEAR IN BUSINESS

THE

BIG

IMPACT Therma South’s coal-fired engines begin to chug next year and everyone--from businessmen to consumers to the taxmen-- is eagerly awaiting

By ARMANDO B. FENEQUITO JR.

in the city because of the expected stable power supply, Cortez said.

He said that from January to September, DCIPC only got 10 to 16 investment inquiries every month. However, from October up to the present, the average queries has shot up to 20 to 25 a month. This is after TSI announced that they are about to operate next year.

Among the big investments in the city are Steel Asia in Bunawan, Uratex Plant in Toril, and the Megaworld Township project in Lanang.

Cortez said that city recorded P30 billion worth of investments from TSI alone.

According to Business Bureau head lawyer Lawrence Bantiding, the operation of TSI will solve the power problems experienced by the city during summer time.

Bantiding said that the TSI will allocate 100MW to Davao Light and Power Company (DLPC) so that the city will have a stable power supply which will be beneficial to the business sector in the city.

He said that every time that there is a power interruption in the city, businesses suffer from the additional cost because they are forced to resort to the more expensive generators to operate their business.

“Dako gyud og epekto sa atong negosyo ang brownout (the brownout really affects a lot to our businesses),” Bantiding said.

For City Planning and Development Office (CPDO) head Marcelino Escalada Jr., Davao City will not be compromised because we already have continuing and sustained power generation.

On the issue of taxes, the local government units (LGUs) Davao City and Sta. Cruz, Davao del Sur are still debating on the sharing of local business tax (LBT) to be paid by the plant.

Davao City wants a 70-30 share of the remaining 70 percent of LBT since the plant occupies a huge area in the city.

FTHE BIG, B2

B2EDGEDAVAO

THE YEAR IN BUSINESS

VOL. 7 ISSUE 195 • SUNDAY - MONDAY, DECEMBER 14 - 15, 2014

THE BPO INDUSTRY

Next Wave City

By CHENEEN R. CAPON

W

ITH structures rising left and right in Davao City, there is no doubt it is all primed up to be the next hub of Information and Communication Technology-Business Process Outsourcing (ICT-BPO) companies.

ICT-Davao president lawyer Samuel Matunog said that there will be additional space measuring 30,000 square meters (sqm) available for BPO locators by the first quarter of 2015. This will be an additional to the 7,500 sqm existing BPO spaces in the region and will be generating some 9,000 jobs.

According to Matunog, these BPO spaces will be made available with the construction of IT parks in the city including the Matina IT Park, touted to be the Mindanao’s largest IT park, and Lanang Business Park.

Matunog foresees that by the end of 2016, a total of 37,000 vacancies are still needed to be filled up in the ICT-BPO sector.

Davao City Investment and Promotion Center (DCIPC) head Ivan C. Cortez, meanwhile, said in an interview last Friday that the city becomes a hotspot for BPO locators because of huge potential for busi-

ness continuity.

“The city provides an alternative venue for the industry to have continuity, especially when there is disaster in the first two islands,” Cortez said, adding that firms cannot afford to lose their clients abroad.

Dubbed as the Next Wave City and ranked in the Top 37th and 59th spots in various rankings as a BPO destination in Asia and world categories, Davao City become a third home, next to Manila and Cebu, to local and foreign based voice and non-voice BPO companies.

At present, DCIPC recorded a total of 97

combined foreign and local-based BPO companies now operating in the city.

The sector, noted to be one of the most job generating sectors in the region, employed a total of 21,000 full time workers.

“Last year, we were able to record 94 companies. We have three new locators that entered this year,” he added.

Three of which have just landed in the city these year. Among these are Convergys, Teleperformance Philippines, and IBEX. Well-known and big BPO players that located in the city years back includ-

ed Concentrix, Sutherland Philippines and Hubport Interactive Center Davao, while notable IT areas in the City are Damosa IT Park, Abreeza- Ayala Mall, SM City Davao and SM Lanang Premier.

Cortez said that the ICTBPO sector has a rosy outlook next year.

Cortez revealed that two BPO firms with big accounts in United States expressed interest in locating in the 7,423 sqm first building of Matina IT Park.

Matina IT Park its Last year, the IT park received its Philippine Economic Zone Authority (PEZA) accreditation last year, which

means it can enjoy from tax holidays for three years, business sales tax, and real property tax, a report said.

The construction of the first of the three buildings which P100-million project was completed third quarter of this year and almost ready for occupancy.

Once completed, it is said that the Matina IT Park in McArthur Highway, Maa, Davao City will be joining other PEZA accredited areas like “Lanang Business Park, Felcris IT Park, Pink Walters IT Building, Ambiente Teleservices, and HAI Global Services with Peza accreditations,” the report added.

City administrator J. Melchor V. Quitain reported that the city should have the biggest share and therefore he was not in favor of equally sharing the remaining 70 percent.

TSI legal counsel Raul Nadela Jr. informed the Sta. Cruz LGU about Davao City’s proposal but said TSI did not agree and instead pushed for a 50-50 share.

The report said that part of the project being constructed in the area of Sta. Cruz is the Coal Dome which will be used as coal storage since it is close to the port.

Mayor Joel Ray L. Lopez said that Sta. Cruz has not yet received the

proposal from Davao City.

TSI will automatically pay 30 percent of its LBT to Davao City because its principal office is located here. Under Davao City’s proposal, it will get 70 percent of the balance while Sta. Cruz will get 30 percent.

Lopez said the matter is still being discussed by the municipal council, which will submit its counter-proposal to Davao City.

Twenty-two distribution utilities and electric cooperatives in Mindanao have signed power supply contracts with Therma South. As of September 2014, the Energy Regulatory Commission (ERC) has approved 13 of

these contracts.

Customers with approved contracts can immediately get power from Therma South once the power plant is completed.

Once operational, Therma South will deliver much needed power to the major cities of Davao, Cagayan de Oro, Cotabato, Butuan, Gen. Santos, Tagum and Kidapawan among others.

Also receiving much needed power are the Agusan and Surigao provinces, Davao region, North and South Cotabato, Sarangani, Misamis provinces, Zamboanga provinces and parts of Bukidnon.

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VOL. 7 ISSUE 195 • SUNDAY - MONDAY, DECEMBER 14 - 15, 2014

THE YEAR IN BUSINESS

EDGEDAVAO

B3

MANUFACTURING

I

Mills of steel

By JON JOAQUIN

N time for the expected growth of Mindanao following the Bangsamoro peace agreement, SteelAsia Manufacturing Corporation – the country’s largest steel manufacturer – completed a P3-billion steel plant in Davao City. The plant’s completion is in time for government initiatives to build Mindanao infrastructure and generate business activity.

Since 2012 up to 2015, the Mindanao public works and highways budget allocation has exceeded all major region groups, to include NCR, Northern Luzon, Southern Luzon, and Visayas.

The 2015 budget represents a 68 percent growth from the previous year’s budget. This budget grew from P20 billion of 2012, to P27.5 billion in 2013, to P 37.5 billion in 2014, and

FMILLS, B4

TOURISM

The ‘Davids’ among Goliaths

By ARMANDO B. FENEQUITO JR.

D

AVAO City is undeniably growing with heaps of new industries and establishments mushrooming all over her landscape.

Also mushrooming are small inns and motels concentrated along Times Beach in Barangay 76-A up to Barangay Matina Aplaya.

The record of Business Bureau indicates there are 25 registered inns, motels and pension houses in the area.

According to Business Bureau head lawyer Lawrence Bantiding, the growing number of inns and motels should not be interpreted negatively as an indication of more permissive lifestyle of Dabawenyos.

Bantiding said the phenomenon maybe considered a sign of the city’s economic boom.

“Pasabot lang ana na nagadaghan na ang mga tao na naga-abot sa Davao that somehow, dili na gyud tanan ma book sa mga hotels (It only means that so many people are now visiting the city so that they cannot all be accommodated in the existing hotels),”Bantiding said.

These inns and motels also serve as alternative means of accommodation for people especially those with tight budget. He said

that people choose to stay in these places because of the short-time rates which are very affordable compared to staying in a hotel.

He said that staying in a hotel in the city is very expensive compared to the 12 hours in the inns and motels which costs as low as P250.

There are also people from other places who visit the city with their families and some of them opt to stay in cheap inns and mo-

tels.

He said that the inns and motels in the Times Beach stretch could be also strategic because it is located near the Davao City Overland Transport Terminal (DCOTT).

Bantiding said that most of the customers of these lowcost establishments are drivers, travelers and entrepreneurs from Davao City’s neighboring provinces .He said it is just like in

the United States of America where there also many people who stay in the motels because of their long hours of travel.

“Instead of sleeping inside their cars, which is dangerous, they will just stay in the inns,” Bantiding said, adding that “motel” is a contraction of “motorists hotel” or hotels that cater to traveling motorists. He said motels in the western world do not have a negative connotation, they are

simply hotels for drivers, motorists and transient visitors.

For Davao City Investment and Promotion Center (DCIPC) head Ivan C. Cortez, undeniably the inns and motels really compliment the needs of the people who are visiting the city.

Cortez said that there are a lot of entrepreneurs who will come to the city to get supplies for their business in the provinces. He said numerous trucks

carrying these supplies bought by visiting businessmen are found along Monteverde Street and R. Magsaysay Avenue.

Cortez said that the owners of these inn and motels in Times Beach going to Matina Aplaya really see that they will really earn from it.

The inn operators believe that the owners of Queensland are making oodles of money in their business, a reason they are following the motel’s practice of accommodating transients for short time, he said.

Cortez however said he does not know if the inns and motels in the area are accredited by City Tourism and Operations Office (CTOO).

He said that under the amended tourism code they are also required to submit occupancy reports to CTOO before their applications for renewal of business permits can be approved.

Earlier, City tourism officer Lisette Marques had said the occupancy reports will provide the data that the city government and the Department of Tourism (DOT) 11 need in knowing a factual tourism situation of the city, as basis for craft-

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B4EDGEDAVAO

THE YEAR IN BUSINESS

PUBLIC TRANSPORT

VOL. 7 ISSUE 195 • SUNDAY - MONDAY, DECEMBER 14 - 15, 2014

Changing the way we ride

By NEILWIN L. BRAVO

D

AVAO City’s taxi drivers are reputed to be among the best in the business.

Lately, everyone in the taxi business is in frenzy about this new concept that just made Davao’s cabbies tech savvy.

Notice that dashboard with suctioned smartphone connected to a GPS? That’s not Mr. Driver charging his mobile. That’s the GrabTaxi gadget right there that connects him to the thousands of commuters each day.

Yes, GrabTaxi. The same Malaysia-based Malaysia-based taxi booking app that has been changing the way we use public transport.

On October 22, this year, GrabTaxi was formally launched in Davao City with the promise

Mills... FFROM B3

to the 2015 budget of P 63 billion.

The Davao plant is expected to reduce the cost of construction in Mindanao.

Rebars no longer need to be shipped from Manila, and as a result Manila and Davao rebar prices would be the same.

Furthermore, the elimination of sea freight reduces the carbon footprint associated with shipping fuel. The mill in itself is a benchmark for the steel industry in modern environmental protection. Despite

that it has raised some $90 million in funding to bankroll its talent acquisition and driver loyalty program campaign.

Strange enough, GrabTaxi is not a taxi company. It does not have a taxi fleet. At most it has one or two pink sedans fitted with cat ears and tails for some added effect. But going back, GrabTaxi relies on drivers renting units from taxi companies to use their app.

It’s a concept that is out of the ordinary. Radi-

large water needs, the mill collects 100 percent of its water through a rainwater collection system. The mill fully recycles water with zero effluent from operations. Its innovative closed lubrication system ensures no seepages of used oil into the environment. Its technologies are the most efficient in power and fuel consumption in the industry.

Government thrusts to encourage the manufacturing sector as a vehicle for inclusive economic growth are addressed by the steel

cal even. Imagine having to convince drivers, majority of that taxi driving population have not even used a smartphone in their entire life. And now, at the touch of the screen, they submit bids for every booking they think is within driving distance and communicate with would-be passengers.

It’s basically like a blind date. The cabbies would pick up their clients using the GPS directions. Now

industry. The Davao steel mill will create 2,000 jobs directly and indirectly.

Manila stands to benefit as well from the establishment of the Davao mill. Dispersing economic activity across the archipelago decongests the Manila ports. Around 75 percent of SteelAsia’s operation is no longer in Manila but dispersed regionally. “We are proud that we are part of the solution in the decongestion of Manila,” SteelAsia president Benjamin Yao said.

that’s another innovation there. Not everyone using a smartphone is map-savvy. Not everyone is familiar using the GPS. But with GrabTaxi, drivers are introduced to the innovative word of technology where public transport is further made accessible using the internet.

And then more.

Julius, a driver for eight years, said he is into GrabTaxi for only two weeks and he has already paid up the P10,000-worth smartphone gadget from his shares in the GrabTaxi bookings. Plus, he said he has already accumulated P7,000 as his personal share from bookings alone which he hopes to receive by end of December.

“Pang New Year ko na yan sir,” Julius told this writer when asked about his earnings from the booking app.

Before GrabTaxi, Julius admits he has not used a touch phone.

“Kanang karaan lang na cellphone akong gamit sir.

Dili man ta kaafford aning smartphone,” he said.

After two weeks of using his new Android phone, Julius is literally

quick to the draw.

“Paspas dayon ta ug tubag sir kay para makadaghan ta ug booking,” he explained.

The thing here is to get as much bookings as a driver can. “Kung kugihan jud sir, mukita jud ug dako.

Gwapo jud ni na concept.

Pero kung dili sad nimo adtoon imong booking, possible sad na mablacklist ka,” Julius added.

The rules of engagement call for a driver to honor the booking as a contract to fetch and transport the passenger to his destination which is inputed in the app. The app also indicates the estimated cost and distance.

Once a driver is deployed for a booking, his Grabtaxi appears on the screen of the booker.

Likewise, the name of the passenger also appears in the screen of the driver.

“Kailangan mosunod lang jud sir,” said Julius.

“We want to make our drivers happy. Happy drivers make happy passengers,” said Paolo Evalle, GrabTaxi driver experience head said during the

The Davao mill is the largest and most modern steel plant in the country, at par with the world’s best. The mill can produce 500,000 metric tons of rebars annually, bringing Steel Asia’s total production capacity to two million metric tons from its six plants. This capacity is more than half the country’s demand of 3.3 million metric tons this year.

S t e e l A s i a has three plants in Luzon, one in the Visayas, two in Mindanao, including the new Davao plant.

ing the plan and policies for the industry.

The report will also provide the CTOO with the exact number of accommodation units that the city can provide for domestic and foreign tourists.

Under the amended tourism code, the primary tourism establishments or enterprises have to undergo mandatory accreditation from a national agency such as DOT prior to being licensed or registered.

22.

app’s Davao City launch last October

GrabTaxi is not alone though in this concept.

But for now, GrabTaxi has enmeshed itself in Davao City as the lone provider of online taxi booking.

Davao City is the 17th location in Southeast Asia to use the app. Davao City is the third city in the country to experience GrabTaxi’s selling proposition of convenient, easy, and safe taxi experience for passengers enduring inefficient transport franchises and price-gouging drivers.

Davao City has been chosen for its increasing number of smartphone users with data connection, stable taxi franchises (currently GrabTaxi Davao has 11 fleet), and to “help Davao promote itself as a tourist destination.”

At the moment, GrabTaxi is on promo for Christmas with a P50 discount on taxi rates. By January, however, the true test of this concept will be put on the line as it operates under normal standard rates to be passed on to passengers.

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Primary tourism enterprise refers to facilities, services, and attractions that are directly related to or involved in tourism such as hotels, resorts, self-styled accommodation establishment (hostel, dormitel, condotel, etc.), pension houses/inns, motels (motorist hotels), travel agencies, tour operators, tourist transport operators, ticketing agencies, tour guides, meetings, incentives, conferences, and exhibitions (MICE), and MICE organizers.