2011 DBP DEVELOPMENT BANKER


Green banking with the Development Bank of the Philippines

DEVELOPMENT FOCUS• Agricultural waste fuels stable and sustainable power by Jayvee P. Cortez

• Harnessing nature to nurture health by Neil B. Diaz

• Danao Adventure Park: A thrilling ride to environmental protection by Candice Dominique L. Sayson

• Converting trash into cash – while going green by Candice Dominique L. Sayson

• ASELCO: Bringing power within reach by Neil B. Diaz

• Barangays in Bohol turn clean and green by Candice Dominique L. Sayson

The DBP Forest program: Giving back to the communityby Neil B. Diaz

DEVELOPMENT NEWS • Innovative credit facilities launched• International award for CamSur project• Pioneering agricultural hub in Bulacan supported• Olongapo City sanitary landfi ll project fi nanced• DBP supports Tarlac water coverage expansion• Financing for water supply and wastewater project in Boracay

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The Development Bank of the Philippines is committed to champion environmental protection and sustainable development. As it continually integrates environmental considerations into all aspects of its operations, the bank also actively encourages clients to include environmental considerations in their businesses and thrusts. With the provision of fi nancing, as well as technical assistance, DBP supports projects that are environmentally-sound. The bank has also mustered a critical mass of support from government and regulatory agencies, local government units, the academe, business and industry, and people’s organizations.

About the cover

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EDITORIAL ADVISER LEONORA A. FERNANDEZEDITOR MARIANNE P. GARCIA

ASSISTANT EDITORS CRISELDA V. CODERA, JAYVEE P. CORTEZ

WRITERS NEIL B. DIAZ, CANDICE DOMINIQUE L. SAYSON

ART DIRECTION ROLANDO L. CARCAMO, GIL C. FULMINAR

PHOTOGRAPHY JOSELITO P. ALANO, RODOLFO D. CASTROLYNDON A. JOSON, CANDICE DOMINIQUE L. SAYSON

CIRCULATION JOSELITO P. ALANO, RODOLFO D. CASTROELVIRA D. DESPUIG, LYNDON A. JOSON

The DBP Development Banker magazine is published by the Corporate Affairs offi ce of the Development Bank of the Philippines with address at the ground fl oor,

DBP head offi ce building, Sen. Gil J. Puyat Avenue corner Makati Avenue, Makati City. Telephone number 815-0904. Email address [email protected].

Articles in this publication may be quoted or reprinted provided acknowledgement of source shall be stated.

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As the country’s premier development fi nancial institution, the Development

Bank of the Philippines (DBP) vigorously pursues a commitment to environmental

preservation and sustainable development. Placing sustainability at

the center of its development efforts, DBP’s philosophy is that economic

progress must always be attached to environmental protection.

Green bankingDBPwith

2011 DBP DEVELOPMENT BANKER 2


“With our mandate as a development fi nancing institution, environmental concern and responsibility have always been second nature to us. In fact, as far back as 1972, starting with the World-Bank funded Industrial Restructuring Project, DBP has always moved to bring this thrust to the core of its lending operations,” DBP president and chief executive offi cer Francisco F. Del Rosario, Jr. has said. Helping to set a benchmark for the fi nancial sector, DBP is one of the fi rst Philippine banks to integrate environmental considerations in all aspects of its operations. In 2002, DBP became the fi rst Philippine bank to be ISO 14001 certifi ed by SGS Switzerland SA for its successful establishment and implementation of an Environmental Management System (EMS). The recognition covers its banking, lending and investment activities. Through the years, DBP has remained compliant with the requirements of this international standard. The bank also plays an active role in encouraging clients to include environmental considerations in their businesses and thrusts. It provides fi nancing, as well as technical assistance, to projects that are environmentally-sound. These environmental initiatives include new and renewable energy projects, waste management, pollution abatement, clean production technologies, water treatment, the management of natural resources, and occupational safety.

DBP has also mustered a critical mass of support with its alliance with government and regulatory agencies, local government units, the academe, business and industries, and people’s organizations.

Environmental Excellence Award In recognition of its exemplary initiatives in environmental management, DBP was conferred with the Environmental Excellence Award by the Department of Environment and Natural Resources (DENR) during the 2011 Recognition Awards for Eco-Friendly Government Offi ces. DBP was cited for its various environmental initiatives such as the regular conduct of fi re

inspection in its Makati headquarters, the installation of a fi re alarm system in all fl oors, and the purchase of fi refi ghting equipment to ensure the safety of bank employees. DENR also cited the bank’s green procurement program, conversion of gasoline-fed vehicles to LPG, and its solid support for environmentally-sustainable projects. The 2011 Recognition Awards for Eco-Friendly Government Offi ces assessed the implementation of environmental management programs in government agencies and government-owned and controlled corporations (GOCCs). It is in line with two major national government programs -- the National Greening Program and Resource Conservation and Protection. It is also in support of President Benigno S. Aquino III’s call for fi nancial viability and fi scal discipline among GOCCs and strengthening good governance in order to be more responsive to the needs of the Filipino people.

Partnership for climate change and disaster preparedness Among other partnerships, the bank also recently signed a memorandum of cooperation on the Public-Private Partnership on Climate Change, Disaster Preparedness and Sustainability that seeks to mobilize private and public sector organizations to help local communities eff ectively face the challenges posed by climate change and other natural and man-made risks.

DBP chief operating offi cer Edgardo F. Garcia shows off the Environmental Excellence Award bestowed on DBP by DENR. Also in photo are (from left): Environmental Management Bureau offi cer-in-charge Atty. Juan Miguel Cuna, DENR undersecretary Ignacio Demetrio, DBP vice president Paul Lazaro, DBP senior assistant vice president Aurora Maghirang, and Civil Service Commission assistant commissioner Rogelio Limare.

Public transport vehicles using clean energy.

33 2011 DBP DEVELOPMENT BANKER


Del Rosario said the program will enhance sustainability and progress of communities and will be applied in selected environmentally-critical areas like watersheds. It will also help selected local communities assess their capabilities on climate change mitigation and adaptation, disaster preparedness, and sustainable development. He added that DBP will provide the program technical support on fi nancial and development matters, including credit assistance to qualifi ed borrowers to enhance the sustainable livelihood and infrastructure and logistics requirements of the local communities in delineated areas. The bank shall also draw and share on the experiences of its reforestation program, the DBP Forest program, that may contribute to greater success of the reforestation eff orts. DBP will also allocate funds for two plant nurseries with training component in the Marikina Watershed and Cabanatuan City in Nueva Ecija. Private sector participants in the program include the Management Association of the Philippines; Philippine Chamber of Agriculture & Food, Inc.; EARTH Institute, Asia, Inc.; Philippine Disaster Recovery Foundation; Private Sector Disaster Management Network; Philippine Bamboo Foundation;

Philippine Business for the Environment; Energy Development Corporation; Geodata Systems Technologies, Inc.; Easy Eco LED Philippines; MFI Foundation; and Earthsavers Movement, Inc. Public sector participants include the departments of Social Welfare and Development, Environment, Interior and Local Government, Energy, and Agriculture; Philippine Climate Change Commission; National Economic Development Authority; Philippine Council of Sustainable Development; the provincial governments of Nueva Ecija and Albay; AlbayCIRCA and Climate Change Academy of Albay; and Land Bank of the Philippines. DBP, in its developmental mission and initiatives, remains committed to be a champion for environmental protection and sustainable development, continually integrating and implementing environmental considerations into all aspects of its operations and services, asset management, and business decisions. Del Rosario sums it best when he says, “We hope that we will continue to be a convincing proof that economic growth targets are always compatible with preserving the gifts of nature. Our very own experience would bear this out.”

Launched in 2005, the DBP Forest program now covers more than 6,000 hectares in 36 sites around the country, including upland and coastal areas.

DBP extends assistance to water supply and sanitation projects to ensure the sustainability of the country’s water resources.



DEVELOPMENTFOCUS

Agricultural waste fuels stable and sustainable power

Dubbed the “Rice Granary of the North,” the province of Isabela is

home to vast hectares of fertile rice fi elds and hardworking farmers.

Isabela is blessed with the fertile soil of the Cagayan Valley and

nourished by several rivers dotting its territory. The sight of thousands

of farmers tilling the land, planting crops, and transporting their

produce is a familiar view that dominates the vast landscape of

the province day in, day out.

While agriculture has provided livelihood to millions of residents in the province, it has left some environmental issues such as the disposal of rice hull. The outermost layer covering the rice grain, the rice husk is detached during the milling process. As has been the practice in most parts of the archipelago, rice millers in Isabela dump and burn rice hull along the roadsides, or simply leave it to decompose. But for three of the biggest and most modern rice millers in Isabela, the rice husk is not just an agricultural waste. It also serves as a combustion material for their co-generation biomass power plants, all constructed through the Development Bank of the Philippines’ (DBP) assistance. These small-scale power plants do not only address the issue of proper rice hull disposal but also provide a sustainable and stable supply of energy for rice milling operations.

by Jayvee P. Cortez

Top Photo:The DBP-fi nanced 2-megawatt biomass co-generation power plant of Golden Season Grains Center, Inc. in Luna, Isabela.

5


become more stable. Golden Season is also planning to sell off unused electricity to the Luzon grid in the future. The savings generated by Golden Season from the operations of its power plant has allowed the fi rm to become even more competitive. “On the business side, we can off er better rates to farmers because of the lower electricity expenses,” says Golden Season general manager Leana Tan. Golden Season operates in a 20,000 square meter facility, where farmers and rice paddy traders from Isabela to as far as Cagayan in the north and Pangasinan in the west troop for their milling requirements. The company annually procures more than half a million bags of unhusked rice. Golden Season rice products are then sold to established supermarkets. Aside from rice, Golden Season also supplies high-grade whole yellow corn kernel for animal feed and white corn kernel for food snacks. Now that the power plant is fully operational, Golden Season is setting its sights on other initiatives such as certifi cation for Hazard Analysis Critical Control Point (HACCP), a preventive quality assurance program designed to provide increased control and monitoring during critical stages of the food processing chain. Golden Season is also eyeing to register its power plant under the Clean Development Mechanism in the future. The CDM is a mechanism under the Kyoto Protocol that allows industrialized countries committed to greenhouse gas reduction to invest in climate-friendly ventures in developing countries. The company also plans to attain ISO 14001 certifi cation for its power plant.

Family Choice Grains Processing Center, Inc. Entrepreneur Juanito Tio was just 24 years old when he started what would eventually become Family Choice Grains

Golden Season Grains Center, Inc. For offi cials of Golden Season Grains Center, Inc., its 2-megawatt power plant was the solution to fl uctuating power supply in the area. According to managing director Leoncio Tan, the local electric utility provider in their area cannot consistently provide electricity to the rice milling plant located in Luna, Isabela. Power supply usually falters in the afternoon, compromising the 24-hour operations of the rice milling plant during the harvest season and up to 14 hours during the lean season. “Stable energy supply is very important to a rice milling plant, especially when its capacity increases,” Tan underscores. Aside from the issue of sustainable power supply, the company had also been aff ected by soaring costs of electricity. According to Tan, Golden Season used to spend about P12 per kilowatt hour for electricity. He estimates that the fi rm spends about P150,000 a day, or roughly P4.5 million a month, for electricity alone. In February 2011, the company’s rice hull-fueled biomass cogeneration power plant, built with the help of a loan from DBP, commenced operations. Located adjacent to the existing facilities of the rice milling plant, the power plant currently utilizes 2.8 metric tons of rice hull to generate between 1.2-1.3 megawatts of electricity. The power generated is being utilized for the power requirements of the rice mill operations of the company. With the operation of the power plant, power supply is no longer a cause of concern for Golden Season. Electricity generated by the power plant is enough to support the 24-hour, 7 days-a-week operations of the rice milling plant. And with Golden Season no longer dependent on the electric cooperative for its power requirements, power supply in the area has

The 2-megawatt biomass cogeneration power plant of Family Choice Grains Processing Center, Inc. was inaugurated in August 2011.

6


Processing Center, Inc. -- after he purchased a simple milling line in 1978. Twenty fi ve years since Tio acquired the milling line, his family incorporated Family Choice Grains Processing Center, Inc. where he now serves as corporate secretary. As early as the late 1980s, Tio had already been contemplating putting up his own power plant because of the high cost of electricity and the unstable power supply in the area. “The low voltage supply prompted us to buy our own generator to run the rice mill,” he recalls, adding that the fi rm also had to deal with the high maintenance costs of this generator. “But with the rising costs of fuel, it was no longer feasible to run a generator set so we shifted to sourcing our energy from the electric cooperative.” It was only after the DBP-financed 1MW biomass co-generation power plant of Isabela La Suerte Rice Mill Corporation in San Manuel, Isabela started operations in September 2007 that Tio pursued his dream of putting up his own power plant. The Isabela La Suerte Rice Mill Corporation power plant consumes 3.2 metric tons of rice hull to supply the power requirements of two rice mill facilities, with the excess rice hull disposed to a landfill designated by the municipality of San Manuel, Isabela. Even when Family Choice faced challenges during the initial phase of construction, Tio remained committed to fi nishing the project. “If we were not able to put up this plant, it would be the end of everything,” he emphasizes, adding that Family Choice needed the power plant to remain competitive in the rice milling industry. In April this year, Family Choice’s own 2MW rice hull-fi red biomass cogeneration power plant, fi nanced through DBP’s assistance, commenced operations. Using an average 2.8 metric tons of rice hull, the power plant generates about 1.131MW to power the entire rice milling plant.

The power plant has immediately reaped benefi ts for Family Choice, as the company is no longer aff ected by fl uctuating power supply in the area. Energy has also been cheaper for Family Choice these days, compared to previous years when the fi rm had to pay a minimum of P12 per kilowatt hour for sourcing electricity from the electric cooperative. The power plant has also completely eliminated the need to burn rice hull, in the process sparing the community from noxious smoke that can trigger numerous health problems among residents. There is also no water discharge from the power plant, while the ash generated from the power plant is used as fertilizer. Family Choice consultant Juancho Barreto off ers a simple illustration of how the power plant has helped in protecting the environment: “When you pass by a rural area, you can see farmers burning rice hull along the fi elds. There’s black smoke

coming from it. The power plant burns two tons of rice hull per hour and you see white, clear emission. So we are certain that the power plant has made a good impact on the community and the environment by removing the practice of burning rice husk.” Tio quickly adds that the fi rm will still have to do some fi ne-tuning to the power plant, with the long-term plan of registering it for CDM and selling excess electricity to the Luzon grid. But for now, both Family Choice and Golden Season rice mills are enjoying the benefi ts of their rice hull-fueled biomass cogeneration power plants notably in terms of more stable and cheaper power supply while doing their share in preserving nature’s gifts to Isabela.

Golden Season Grains Center, Inc. managing director Leoncio Tan (extreme left) with Family Choice Grains Processing Center, Inc. president & CEO Ralph Caesar Tio and Milo Tan of Golden Season Grains Center, Inc. (third and fourth from left, respectively).

DBP regional marketing center-Northeastern Luzon head Noli Lucero (left) and Golden Season managing director Leoncio Tan during the inauguration of the biomass power plant.

7


DEVELOPMENTFOCUS

Harnessing natureto nurture health

The “buko juice” is now becoming not only a fad, but a commercial commodity that is

starting to develop as a healthier alternative for people aiming to

be fi t, hale and hearty. This escalating trend has infl uenced

some established beverage brands to begin intensifying

marketing promotions for packed coconut water, even hiring well-known celebrities in the United

States to endorse this product to persuade more people to try this

nutritious drink.

And why should one not? Dietary studies on the nutritional content of coconut water reveal some fascinating facts on the health benefi ts of drinking coconut juice. Packed with fi ve essential electrolytes like calcium, potassium, phosphorous, magnesium, and sodium, coconut water is said to be a good alternative to sports drinks to re-hydrate the body after a strenuous workout or sports activities. The growing market for coconut water has prompted a Butuan City-based production fi rm to establish processing plants to enable the company to produce and export packed coconut water to overseas markets. Celebes Coconut Corporation (CCC) has processed innumerable coconuts to produce various coconut-based products that it exports to other countries, including its latest hot commodity -- packed coconut water.

Astute entrepreneur Founded 11 years ago by Rory Eddie Ong Yiu, CCC was prominent for its export-quality coconut-based products even before it ventured into the production of packed coconut water. Other products of the company include virgin coconut oil, coconut cream, coconut sugar, and dessicated coconut that the

by Neil B. Diaz

Top Photo: CCC ships out hundreds of these packed coconut water monthly for the overseas market.

2011 DBP DEVELOPMENT BANKER9

company sells in the United States, Europe, the Middle East, and East Asia. For a fi rm that was founded at the turn of the century, CCC’s solid presence in the coconut production business is a clear manifestation of the ingenuity of the man behind the fi rm. Long before the company engaged in the production of coconut-based products, Ong Yiu was already making good use of natural resources for raw materials. In 1981, Ong Yiu started a company that produced and exported bamboo chopsticks to Japan. Then in 1986, capitalizing on the abundance of bananas in the province of Agusan Del Norte, he established a fi rm to manufacture banana chips for export. “We already found out, way back then, that there were opportunities in producing banana chips because there were plenty of bananas but nobody was processing it,” Ong Yiu recalls. When the requirement for coconut oil increased in his banana chips factory brought on by the improving market demand for this product, Ong Yiu turned again to Mother Nature for a solution. Tapping coconut as raw material, he set up a coconut mill and refi nery in 1991 to supply the coconut oil needs of his banana chips production fi rm. Then in order to maximize the profi ts from harnessing coconuts, he founded Celebes Coconut Corporation in 2000 that focused on coconut-based products. One of CCC’s top export products is dessicated coconut (DCN), the tasty shredded coconut meat used in various confectioneries like cakes, crispy biscuits, baked macaroons, chocolate fi llings and toppings. DCN is also used to garnish ice cream bars and health bars, coco bread and candies, and coconut-sprinkled cereal. At present, CCC produces 6,300 to 7,600 metric tons of DCN annually and the product accounts for a hefty chunk of the company’s sales income. Demand for the product comes from world-renowned food companies like Hershey’s, Cadbury, Nestle, and Kellogg’s whose supply requirements helped CCC become one of the top producers of DCN in the country.

“The initial capacity of the coconut processing plant, when we fi rst started operations, was 100 tons a day. Today it has a capacity of 300 tons a day. Before the end of this year, we will be averaging 400 tons a day,” Ong Yiu explains.

Solid partnership As the demand for dessicated coconut has grown over the years, so has the company’s requirements for additional equipment, manpower and raw materials. And with fi nancial assistance from DBP, the company continues to grow strong. Ong Yiu’s business relationship with DBP dates back to 1997 when various fi rms under his Celebes Group of Companies (CGC) started to avail of fi nancing assistance from the bank. First to be granted with loans was Celebes Oil Mill, Inc. (COMI) which sought the Bank’s help for the

construction of an oil mill and refi nery for its growing coconut oil business. Four years after, in 2001, two CGC fi rms, COMI and its sister-company Royce Food Corporation (RFC), availed of loans from DBP for their expansion projects. Two years later, Celebes Agricultural Corporation (CAC), the fi rm that produces banana chips, received DBP credit assistance for the construction of its waste handling facility. Thus, in 2005, RFC was able to construct its own waste handling facility and waste water treatment plant. In 2008, also with DBP assistance, CCC was able to construct a processing plant with the capacity to produce 140 metric tons of desiccated coconut a day. Despite CCC’s resounding success in producing dessicated coconut and other coconut-based products, Ong Yiu thought that the company could only maximize profi t if they could also process the coconut water instead of throwing this away as a waste product in processing desiccated coconuts. “When you produce dessicated coconut, you throw away the

CCC’s Tetra Pak A3 Flex machine used for packing processed coconut water.

CCC chairman and president Rory Eddie Ong Yiu with some of CCC’s products


coconut water as waste. We have a waste water treatment plant that was also funded by DBP that we use to comply with government regulations regarding proper waste disposal. The company has been spending so much money to operate this treatment plant. In 2009, I realized that instead of throwing the coconut water away and spending money for operating the treatment plant, we could process the coconut water into a beverage drink for export,” Ong Yiu explains. What began as a budget-saving measure turned into a potential gold mine for CCC that spurred the birth of Celebes Coconut Water, an all-natural hydrating beverage which the company has been exporting to nearly 50 countries around the world.

Expanding reach Ong Yiu believes that in order to maximize profi ts in coconut water, he needs to secure a supply agreement with an established beverage company. This is to ensure continuous production and guaranteed sales for his product. That conviction spurred Ong Yiu to look for business partners in the United States in 2009. He also met with representatives of three beverage companies in the country to discuss the possibility of securing a supply agreement with them. And he succeeded. Months after their initial discussions in the U.S., representatives from One World Enterprise (OWE), a California-based beverage company, inspected CCC’s processing plants in Butuan City and consequently, inked a supply agreement contract with CCC in the early part of 2010. OWE is a subsidiary of food and beverage giant PEPSICO and the maker of a well-known coconut water brand in the U.S. - One Natural Experience (O.N.E.) Coconut Water. CCC agreed to produce and supply OWE with 264,000 liters of Aseptic/UHT-packed and canned coconut water every month for the next 10 years. To help it fulfi ll its supply agreement with OWE, CCC availed of fi nancial assistance from DBP for the acquisition of various machineries and equipment for its Aseptic/UHT and canning plants including a new dessicated coconut dryer line to augment existing equipment. CCC also applied for a renewal of its credit line earmarked as working capital for the production of dessicated coconut and packed coconut water. The move was an excellent business decision for Ong Yiu’s company. Not only does the supply agreement assure outright sales of its packed coconut water for a decade by an established

company, it also guarantees that CCC can continue capitalizing on the waste products being generated from its DCN processing plants. Ong Yiu estimates that the fi rm’s DCN processing plants generate at least 100,000 liters of coconut water per day. This enormous amount of coconut water is now turned into a healthy, competitive product for CCC. “Since my raw materials for packed coconut water are sourced from the production of desiccated coconuts, the company now only spends for its production. Normally, the cost of production accounts for 30% of a company’s expenditures, while 70% goes to the cost of raw materials. In our present setup for processing coconut water, we have zero-material cost,” Ong Yiu explains. Ong Yiu expects that demand for packed coconut water will continue to surge in years ahead, as global sales of packed coconut water has been increasing since 2008. Coupled with the growing demand for desiccated coconuts, continuing benefi cial returns for CCC is not a far-fetched idea at all. CCC employs more than a thousand employees who work in its three-hectare processing plants located in Barangay Banza in Butuan City. The other four companies under the Celebes Group of Companies also provide livelihood for around 1,500 workers. CCC also indirectly provides livelihood for thousands of farmers living within the CARAGA provinces where the company sources its coconuts. CCC’s annual raw material requirement for the production of DCN is an estimated 67,000 metric tons of coconuts. That accounts for 6.25% of the total coconut production of the CARAGA region which is an estimated one million metric tons of coconuts a year. “Five or six years ago, I was contemplating on retiring and was prepared to pass on the operational supervision of the company to my children. But the addition of packed coconut water in our product line has revived my interest in running the company for some more years,” Ong Yiu confi des. The shifting interest of people to products that can bring them health benefi ts, as well as the abundance of coconuts in the countryside, are positive indicators of a bright future for CCC. And with Ong Yiu at the helm, CCC and its sister companies under the Celebes Group of Companies also have the backing of an experienced entrepreneur who continues to make the most of the gifts of Mother Nature to signifi cantly benefi t people in the process.

Some of the coconut-based products CCC is producing


In that split second drop -- which feels like an eternity -- you think, “Am I going to die?” But you suddenly feel a tug at your midsection, signaling that the cable wire on which your life depended did not fail you. You now swing back and forth, like a giant pendulum, your arms tingling -- from the natural high of falling or your blood rushing, you are not sure. The cold wind pierces your whole body while about two hundred meters beneath you is a breathtaking view of the Wahig river and lush greens. You have just experienced Danao Adventure Park’s The Plunge, the highest canyon swing in the world. It is both an exhilarating and terrifying ride, and hundreds of people go to the park every day for this ride-of-a-lifetime and some of the park’s other attractions.

DEVELOPMENTFOCUS

A thrilling ride to environmental protection

Danao Adventure Park:

by Candice Dominique L. Sayson

At the edge of a 200-meter deep gorge, two

men strap your body to a harness connected to a

single cable wire. You are hastily given instructions on what to do once you are fi nally thrown off the

cliff. Thoughts in your mind are racing as fast

as your heartbeat can go. And then, you are lowered and fi nally released. You

scream as your body surrenders to gravity.

LGU Danao’s municipal tourism offi cer and Danao Adventure Park general manager Jerome Labra oversees one of the park’s attractions, “The Plunge.”


The Danao Adventure Park off ers its visitors the Extreme/ Eco/ Educational Adventure Tour (E.A.T. Danao) which is growing in popularity among tourists both from here and abroad. The Park is a mere two-hour drive away from Bohol’s capital city of Tagbilaran. Among its many attractions are the “Suislide” or half-kilometer zipline and the “Sky Ride” or cable car, as well as caving, rappelling, river tubing, kayaking, root and wall climbing. The Danao Adventure Park is owned and managed by the local government of Danao. In 2009, DBP extended a loan to LGU Danao which was used for the improvement and expansion of the E.A.T. Danao facility, including “The Plunge” and the “Chair Lift” sections (the latter is a variation of the zipline and is intended for children). As a bank for the environment, DBP continues to intensify support for projects that contribute to the protection and preservation of Mother Nature. LGU Danao’s municipal tourism offi cer and Danao Adventure Park general manger Jerome Labra says that it is also in their interest to take care of Mother Nature. “Eco-tourism always contributes to environmental protection. For example, if this gorge did not look as good as this, it would be diffi cult to sell this place to tourists. So we owe our success to the beautiful surroundings and scenic views,” he explains. He adds that the Park has provided signifi cant employment for a number of Boholanos. “Another good thing is the employment we are able to generate here. We have 130 employees, and our policy is to hire only one worker per household because no matter how much you teach people to care for the environment, if they are starving, they are inclined to be destructive. They will cut trees and sell them as coal. We have documented cases of four species of wild cat that the locals kill and eat. Therefore, we want to provide employment for as many households as possible,” Labra adds. Labra shares that the loan from DBP has indeed gone a long way. Their eco-tourism enterprise has not only provided employment while promoting environmental protection; it also contributes about P1.5-million in monthly gross revenues

Danao Adventure Park offers the Extreme/Eco/Educational Adventure Tour (E.A.T. Danao), which includes the Sky Ride (above), and rappelling and root-climbing activities (above right and below right).


and better, supported by DBP’s latest credit assistance for the successful eco-tourism venture. “As the park grows, and as we expand, new attractions will be situated in adjacent barangays. That’s the key now. Our decentralizing of the attractions of the park is one way to spread the employment and environmental benefi ts that come along with projects like these,” states

to the municipality. Because of the regular income from the adventure park, LGU Danao is able to off er subsidized hospitalization, rural scholarship grants, and microfi nance programs to its constituents. Emboldened and inspired by the Park’s success, LGU Danao is on its way to make its popular adventure park bigger

The “Suislide” is Danao Adventure Park’s version of the zipline. It is one of the park’s most popular attractions.

13


Labra. He mentions the Danao Airpark and Paramotoring School, Rage Off road Buggy, and the Xsanity Zipline (touted as the longest in Asia) as three attractions soon to be fully operational. Labra admits that it takes a bit longer for them to build their facilities to ensure that they do not destroy nor intrude into the fl ora and fauna of the Park’s surroundings. “When we’re digging, we don’t use machinery. We use manual labor to make sure we go at it very carefully, so that we don’t destroy or disturb anything. We’re very conscious about it. Like I said, it’s in our own interest to care for the environment,” he explains. He also proudly announces that the Park will be expanding its accommodations soon to cater to the growing number of people who visit. “We will build eco-lodges. We will make use of local labor and indigenous materials which are easy to replenish and sustainable. The eco-lodges will be luxurious, but friendly to the environment,” he shares. Labra adds that they will be working with professionals who specialize in green architecture for the eco-lodges. Danao Adventure Park is not just for nature enthusiasts, but defi nitely for adventure seekers as well. Labra warns,

“Some rides are defi nitely not for the faint of heart. But I have tried everything here, especially The Plunge. That’s a requirement if you work here. It’s the best way to illustrate that we have confi dence in our facilities.” “In this kind of business, all it takes is just one unfortunate incident to shut you down. So, we have stringent safety measures. We have a safety engineer who checks the facilities and equipment daily, and another person assigned to check on the performance of the operators,” assures Labra. Even with many zipline attractions currently sprouting all over the country, Labra believes that Danao Adventure Park remains distinctive, and arguably, a cut above the rest. “It is said that this Park packs the most thrill per square meter. That’s because we think beyond the zipline!” Labra proudly states. For all the rides and attractions that Danao Adventure Park off ers, any thrill-seeker’s thirst for adventure is sure to be satiated. But more than the short-lived thrills, each and every peso that a thrill-seeker puts into each exciting and fl eeting ride goes into something more lasting -- such as a child’s education, a family’s regular source of income, and Mother Nature’s preservation for future generations to enjoy.

Experience nature’s breathtaking beauty by kayaking along the Wahig River, which traverses Danao Adventure Park.

14


In the past, however, the coconut’s husks were usually just found in large mounds in coconut farms and processing plants, unused, and waiting to be burned. These mounds were incubators of harmful bacteria growth just waiting to happen. The burning of coconut husks also caused air pollution. But 10 years ago, Davao del Sur-based Pontmain Resources, Inc., which specializes in coconut husk processing, found an innovative way to “convert trash into cash.” This is how Leo Alexandro Aguirre, assistant general manager and marketing manager of Pontmain Resources, Inc., describes what they’re doing in the company. “Instead of the coconut husks being thrown away or even burned, we found a way to utilize them and make them viable products for

DEVELOPMENTFOCUS

In the Philippines, the widely-abundant coconut tree has been

called The Tree of Life more than a few times -- and for good reason.

From the fruit’s fl esh, to the trunk and leaves, Filipinos have found

multiple uses for almost each part of the coconut tree.

Converting trash into cash - while going green


15

Coconut husks for processing into fi ber and coir dust.


Coir dust from coconut husks The coco dust or coco peat, on the other hand, is basically utilized more for local consumption. Coconut peat or dust is used as animal bedding, organic fertilizer, or soil conditioner. For instance, coco dust is used in cattle farms and piggeries as animal bedding. Since coco dust takes in eight times its weight in liquid, it can absorb animal wastes extremely well. “Cattle farmers can then sell the coco peat with animal waste to farmers, to be used as fertilizers this time around. So everything goes back to the earth,” explains Aguirre. He says that coco dust is now slowly replacing sawdust, which is usually

16

companies,” he says. “We make environment-friendly end-products that companies can use to substitute for synthetic materials.” An important component in the coconut processing plant is the decorticating machine, which separates the coconut husk into two elements -- coir fi ber and coir dust. The fi ber and the dust each have their own unique uses. Nothing in the husk goes to waste. Coir fi ber from coconut husks The demand for coco fi ber has been steadily growing as awareness about environmental protection gains ground globally. Aguirre shares that coir fi ber has a large market abroad. The coir fi ber is made into coco twine or yarn, and used in hop farms in the United States and Europe. Hops, a kind of vine and a main ingredient in producing beer, latch onto the coco twine while growing. “The coco twine can be processed further into coir geonets or cocomats. These are used for erosion control projects. Instead of using synthetic materials to control erosion in degraded areas like mountains or riverbanks, coir geonets are now used,” narrates Aguirre. There is also an emerging demand for coco fi ber in China to replace synthetic materials, like foam, in car seats, furniture, and mattresses.

Above: Coconut fi ber is processed into coco twine which is in demand in hop farms in the United States and Europe.

Right: Pontmain Resources, Inc. assistant general manager and marketing manager Leo Alexandro Aguirre beside a decorticating machine and its operator.


procured from cutting trees, as bedding in most animal farms. Aguirre adds, “The majority of our coco dust buyers are banana plantations. They use the coco dust for the tissue culture of their seedlings. They have found out that coco dust is a better planting medium compared to what they were using before. It seems coco dust is more absorbent and has better aeration properties.” Coco peat’s unique characteristics not only make it a better planting medium, it also lasts much longer than the mulch that plantations normally use. Mulch is made up of newspaper, straw, or grass clippings.

The road to success One look at Pontmain Resources’ processing plant can lead one to conclude that business has always been in full bloom. But it was not always that way. The company was born out of a demand abroad for coconut fi ber products. This was way back in the late 1990s, when a European friend of the Aguirre family was looking for coconut fi ber products. Atty. Ariel Aguirre, the Aguirre patriarch and Pontmain Resources president and CEO, recalls how the company was born more than a decade ago. “The idea just appealed to me. First, because I am from Davao and I know there are a lot of coconuts in the province. Second, because of the possibility of exporting, which means I can earn money for my country.” He also had a piece of land where he could build his business. The older Aguirre -- together with friend Engineer Apolinar Gaite, now Pontmain Resources’ general manager -- initially undertook the research and found the business contacts needed to start the new business venture. Aguirre would realize, however, that these were not enough for his brilliant

idea for a new business enterprise to take off . He realized he had to get more help somewhere. Aguirre and Gaite found a solid business partner in the Development Bank of the Philippines (DBP). The bank provided the fi nancial support for Pontmain Resources to acquire its very fi rst equipment and construct its building. Gaite narrates, “DBP is the main reason why we were able to start up this business. We succeeded in setting-up this company through fi nancing from DBP.” DBP is also playing a signifi cant part in the planned expansion of Pontmain Resources. The company recently procured a defi bering machine, with fi nancing from DBP. The acquisition of new equipment is in line with the company’s plans to go into higher value products. The defi bering machine produces longer coconut fi ber, which makes for better coconut twine that is much in demand in the United States and European markets. Over the years, Pontmain Resources has indeed demonstrated that in the Philippines, the coconut tree is The Tree of Life. The Philippines is second in the list of countries with the most number of coconut trees. And coconuts remain a renewable and sustainable source of marketable products that can be sold locally and overseas. Pontmain Resources capitalized on the useful properties of coconut “trash,” and successfully built a growing, environmentally-friendly business out of it. As the younger Aguirre puts it, “Right now, the trend worldwide is to go green. We’d like to think that through this business, we are helping the environment.” Pontmain Resources, Inc., with a little help from DBP, has turned a part of the common coconut tree, that part usually referred to as waste or trash, into an extraordinary environmental treasure.

These rolls of coco twine can be further processed into coco geonets or mats, which are used in erosion control projects in degraded areas like mountains or riverbanks.

17


Having been established in August 1976, ASELCO’s eff orts to energize the province have gone a long way since then. From the fi rst energized municipality of Trento in 1979 to the establishment of its fi rst sub-station in Bayugan in 1980, ASELCO now operates four sub-stations with a distribution system composed of more than 3,200 circuit kilometres. With almost 60,000 connections that provide electricity to residents, commercial establishments and businesses, public offi ces, including thousands of street lamps, ASELCO is now focusing attention on maximizing the value of the two transmission lines it has constructed to address power distribution glitches in the province. Backed by a highly-competent management team that oversees a workforce of around 700 regular and contractual personnel, ASELCO’s two newly-built transmission lines funded by the DBP boost the prospects of a brighter future for the residents of Agusan Del Sur.

DEVELOPMENTFOCUS

For more than three decades, the Agusan Del Sur Electric

Cooperative (ASELCO) has been at the forefront of

electrifi cation initiatives in Agusan Del Sur, a province

northeast of Mindanao.

ASELCO:Bringing powerwithin reach

by Neil B. Diaz

Distribution problems Based on National Statistics Offi ce data, Agusan Del Sur is home to more than 600,000 residents distributed over the province’s one city and 13 municipalities. The landlocked province has 318 barangays whose population relies mainly on agriculture and forestry. At present, ASELCO distributes electricity sourced from the National Grid Corporation of the Philippines (NGCP) to almost 60,000 of the province’s more than 95,000 households. And with only 20 of the 318 barangays remaining to

ASELCO president Joel Jumonong.

Top Photo: ASELCO’s transmission line along the main road that connects San Francisco with other municipalities of Agusan Del Sur.


be provided with electricity, ASELCO’s mandate to energize the province is gaining traction every year. Ever-increasing applications for additional connections and mounting power demands by heavy industries in the province could, however, hamper ASELCO‘s operations if no upgrade of facilities is undertaken. In recent years, the increase in connections has averaged 4,000 annually, while power consumption of ASELCO’s consumers has been increasing by an average of almost 6 per cent a year. The establishment of the two DBP-funded 69-kilovolt transmission lines ups ASELCO’s prospects to enhance and better manage electricity distribution in the province.

San Francisco to Talacogon transmission line The fi rst project funded is a 45-kilometer 69-kilovolt transmission line that connects ASELCO’s 10-megavolt-amperes (MVA) sub-station in San Francisco to the newly-built 5MVA transformer located in Talacogon town. The transmission line project is now being used to distribute electricity to various ASELCO consumers in Talacogon and several other towns including La Paz, Loreto, and San Luis. ASELCO general manager Emmanuel Galarse explains how the transmission line continues to benefi t residents in these four municipalities. “The installation of the transmission line, including the construction of the sub-station in Talacogon, has stabilized the voltage level of the electricity we are supplying to our consumers in those areas. Before, we could only supply them with electricity at a 160-volt level. That is way below the standard level of 240-volts. Stabilizing the voltage level at the standard point

makes electrical home appliances work properly,” Galarse explains. The transmission line is also being utilized to supply electricity to several power-intensive fi rms located in Talacogon where 12 wood-based companies are operating. These fi rms are involved in sawmilling, plywood manufacturing, and wood veneering, industries that provide livelihood to many residents in the area. “The operation of the transmission line boosts the prospects of many business fi rms here in Agusan Del Sur to expand. Now, ASELCO can greatly contribute to their expansion eff orts

by providing a reliable supply of electricity with minimal power interruptions,” Galarse notes.

San Francisco to Rosario transmission line Another ASELCO project fi nanced by DBP is the 27-kilometer 69-kilovolt transmission line that links the electric cooperative’s sub-station in San Francisco and its power transformer located in the town of Rosario. This power line was established solely to supply the electricity requirements of Philsaga Mining Corporation (PMC), Agusan Del Sur’s biggest gold mining fi rm located in Rosario. With a power requirement of nearly 50,000 megawatt-hour per year, PMC is one prized consumer for any electric cooperative. Previously, without a reliable transmission line, ASELCO frequently experienced transmission system overloading problems that hampered its capability to meet PMC’s huge power requirement. In the process, ASELCO was just supplying PMC with 0.62 megawatt of electricity -- a small quantity that was, however, signifi cant enough to augment the operations of the mining fi rm’s 5-megawatt diesel-fed generator set. Both ASELCO and PMC have, thus, considerably benefi tted from the completion of the transmission line. Using the 69kV transmission line, ASELCO can now provide PMC with the total electricity requirement the mining fi rm needs for its power-intensive operations. The transmission line has also permanently solved ASELCO’s overloading problem that is expected to result in steady revenues for the company. PMC, on

Top Photo: ASELCO general manager Emmanuel Galarse.

Right Photo: One of ASELCO’s sub-stations in San Francisco.

The main offi ce of ASELCO in San Francisco, Agusan Del Sur.


the other hand, now enjoys a stable supply of electricity resulting in more effi cient operations. The mining company also saves money from directly acquiring electricity from ASELCO instead of operating its costly diesel-fed generator set. “PMC is a great help for us. Without them, our operating expenses would be much higher than our revenues. With their subscription, we were able to recover some of our losses and became fi nancially healthy again,” Galarse explains.

ASELCO and the Philippine Energy Plan The 2009-2030 Philippine Energy Plan (2009-2030 PEP), which was launched by the Department of Energy (DOE) two years ago, is aimed at addressing the looming power crisis that threatens the country’s sustainable development. It is a 21-year period undertaking that should help government address tight energy demand and limited foreign investments in the power sector. Data from the DOE shows that gross electricity generation in the fi rst half of 2010 reached more than 32,000 gigawatthour (Gwh), attaining an increase of 8.7 per cent compared to the previous year’s fi gure. The Luzon grid registered the highest increase in power generation, posting a 12.6 per cent increment, while Mindanao dropped its generation output by 3.8 per cent. This decrease can be attributed to the El Niño phenomenon that hit southern Philippines during the fi rst half of 2010, severely crippling several hydropower plants which were the major source of electricity in the island. With the PEP, the DOE has intensifi ed its campaign to ensure energy security through several strategies including the exploration and development of new sources of oil, gas and coal; utilization of renewable energy including the development of alternative energy sources; improvement in the transmission and distribution system; and enhancing the country’s power sector investment competitiveness. Realizing the PEP’s aim should also address Mindanao’s looming power shortage. The DOE estimates that with an annual growth rate of 4.5 per cent in the demand for electricity in Mindanao, demand will soon equal if not exceed the island’s present dependable output if no new capacity is installed by 2013. Todate, 70 per cent of Mindanao’s dependable electricity output of more than 1,000 megawatt is being produced by hydropower plants located in Iligan and Bukidnon. Generally, though, hydropower plants are not reliable sources of energy as these are sometimes aff ected by droughts similar to the one that hit Mindanao last year.

ASELCO’s various projects, including its newly-built transmission lines, are just some of the initiatives the electric cooperative has been undertaking to answer government’s call for united action to attain energy security. The electric cooperative hopes to further improve its distribution service through the installation of feeder meters in various locations to help stabilize power distribution; procurement of logistics equipment and engineering software; upgrading and replacement of overloaded distribution transformers; replacement of wooden poles with steel poles for more stable wiring system support; replacement of malfunctioning kilowatt-hour meters; upgrade of the capacity of a sub-station located in the town of Trento; and other major construction work to help improve the distribution of electricity to ASELCO’s many consumers. These initiatives are expected to address the problem of load growth, and should also improve system reliability and effi ciency. These strategies are likewise expected to help reduce transformer losses by improving load management which may also result in reduced system loss. ASELCO estimates that bringing down its system losses to around two to four per cent will further benefi t its consumers through lower power rates.

Reaching for mission areas As a power distribution fi rm sourcing electricity from various power generation fi rms, ASELCO is now studying the possibility of having its own power-generation plant. ASELCO president Joel Jumonong says that having its own power plant can help the electric cooperative become more competitive in the future. “We are now in the process of considering building a biomass power plant of our own. Using rice hull as fuel, this power plant can be a cheap source of energy to augment our capacity for power distribution to our consumers,” he says. Jumonong adds that while a biomass power plant is in the company’s pipeline, they are currently focused on delivering electricity to every household and business establishment in the whole of Agusan Del Sur. ASELCO has intensifi ed its information campaign through its satellite offi ces situated in strategic areas within the province to attract more consumers. Jumonong is optimistic that DBP will continue to partner with ASELCO to bring electricity into the far-fl ung areas of the province. “We are very thankful to DBP for supporting this business venture with us. The fi nancial assistance DBP extended to us helped us greatly in realizing some of our major projects. We are hoping that DBP will continue to help us in our future undertakings.”

The board of directors of ASELCO with president Joel Jumonong and general manager Emmanuel Galarse (seated, 6th and 7th from left, respectively)


If, by about 8 in the morning, you haven’t gotten your share of water -- better luck next time. You can try again tomorrow because water stops fl owing from the lone poso in the barangay at about this time every day. Hands down, going without water for even just a day is torture. But this story gets worse, because it isn’t an isolated case. Barangay Calvario is just one of the 24 barangays in the municipality province that has experienced ‘drought’ due to an underdeveloped water and fi ltration system. Barangay captain Emerita Ganzon, who was born and bred in Calvario, candidly shares the diffi culties of coping with limited water -- how people manage their daily household chores, and even their bathroom habits, are single-mindedly dictated by this predicament. She explains how the lack of water has rendered unimplementable the basic sanitation policies of the barangay. For example, a barangay ordinance dictates that each household should have its own bathroom. “This is a requirement of the municipal health offi ce. But we cannot impose these basic requirements dahil walang maayos na daloy ng tubig,” Ganzon explains. “Paano ka magpapagawa ng CR kung walang tubig pambuhos?”

DEVELOPMENTFOCUS

Barangays in Bohol turn clean and green


It is barely four in the morning and the sun has yet to rise

in a distant barangay called Calvario in Loay, Bohol. And

yet, hundreds of people are already lined up, with pails and containers in hand, to get their ration of water for the day from

the single water pump, or poso, in the barangay.

21


It is not surprising therefore that where some children do their ablutions is also where their mothers do the family laundry. Kabandaw River, which fl ows through the barangay, has become polluted. Water is a symbol of life, but in the case of this river, the opposite is true. Due to abuse and improper use, fi sh and water plants no longer thrive in its waters. The Kabandaw River has become an environmental nightmare. Of course there are some barangay residents who refuse to wash their clothes in the river. This means, however, a regular trip to a barangay six kilometers away, which has a slightly better distribution of water during the weekends. The children in the barangay’s schools understandably have an equally diffi cult time as well. Because water is hard to come by, over 500 students share only two washrooms. It is common for many of these children to bring their own water, for drinking and washing purposes, and for fl ushing the toilet. Ganzon shares, “One of the most common illnesses of the children here is urinary tract infection, because they usually try to hold their urine.” Ganzon jokingly shares her own experience of waking up in the middle of the night with the urge to go to the bathroom. Because of lack of water though, she more often than not sleeps off the urge, and waits until she has collected enough water from the lone barangay poso in the morning. All these inconveniences, sicknesses, and environmental problems due to lack of water are now, however, things of the past for Barangay Calvario and other adjacent barangays. In 2008, the Development Bank of the Philippines granted a ten-year term loan to the Municipality of Loay, Bohol, to partially

fi nance the rehabilitation of the local government’s waterworks system. Since the existing water supply system had been ineffi cient and unevenly distributed for years due to continually increasing demand, a more sustainable and effi cient system needed to be built to benefi t the growing number of residents of Barangay Calvario and other nearby barangays. Through DBP’s assistance, a treatment and storage facility was constructed at the highest point of the distribution network, which is in Barangay Calvario. Water coming from the Loctob Spring is mechanically fi ltered before stored in a 1000-cubic meter steel tank. A chlorinator was also installed to treat the fi ltered water in the reservoir.

An operator explains how the DBP-fi nanced water fi ltration system works.

Barangay captain Emerita Ganzon of Barangay Calvario and Loay municipal engineer Melvin Caterio share how thousands of Boholanos now enjoy sustainable clean water in their homes.

22


Flow meters were also installed in order to monitor water supply as it is distributed through the system. Most of the water pipes traverse the 20 or so benefi ciary-barangays, which now makes round-the-clock water service possible and easy. According to Engr. Melvin Caterio of the municipality of Loay, the fi ltration system operates 18 hours every day, from four in the morning until 12 midnight. In the four hours that the system is turned off -- or when there are problems such as brownouts or no power supply -- it is water in the reservoir that is discharged to consumers, ensuring the continuing fl ow of water even during the early hours of the morning. Nowadays, barangay captain Ganzon doesn’t have to sleep off her urge of going to the bathroom when she wakes up in the middle of the night. And she isn’t the only one -- currently 22 of the 24 barangays in Loay already enjoy the benefi ts of their rehabilitated waterworks system. There are already 2,015 registered consumers, and many more in the pipeline waiting to be processed. With a stable water connection, building bathrooms has become the norm in the barangay. Almost all households have already built their own. The same goes for the barangay’s schools, where all classrooms now have their own washrooms. This means students don’t even have to leave their classrooms when nature calls. Ganzon also notes that their houses and surroundings are now cleaner, and even the Kabandaw River is starting to show some signs of life with plants and little fi sh starting to re-populate the river. The unpleasant smell which used to emanate from the river has also started to dissipate. Moreover, households in the barangay have now taken a liking to backyard gardening. Fruit-bearing trees, vegetables, fl owering and ornamental plants are now a staple in most

Above: Residents of Loay, Bohol can now enjoy backyard gardening and farming with the installation of an effi cient water system.

Right: During brownouts and power shortages, water in this reservoir is discharged to consumers, ensuring the continuous supply of water.

backyards. Ganzon proudly relates that some neighbors now regularly harvest from their backyards a variety of vegetable crops like corn, tomatoes, pechay, and even peppers for their dinner tables. This time around, the irrigation of crops and gardens does not have to depend solely on the rainy season. Considering that this part of Bohol has great potential in agriculture, the rehabilitated water system is also seen to indirectly spur business activity in this economic sector. In a neighboring barangay, the local government has started conducting agri-seminars for its constituents. Residents are taught, among others, how to maximize available agricultural land by planting root crops, vegetables, and corn. Just like how the Kabandaw River freely fl ows, the benefi ts of having easy access to clean water are seemingly infi nite. In this part of Bohol, thousands continue to enjoy the benefi ts of better sanitation and hygiene, and more environment-friendly communities. Surely, the barangays in the Municipality of Loay, Bohol are well on their way to being cleaner, greener, and better.


DBP Forest:

by Neil B. Diaz

Seven years after typhoon Winnie crippled a large part of Quezon province that compelled the Development Bank of the Philippines (DBP) to initiate its Forest Program, this reforestation initiative is now reaping fruits in different areas of the country. With more than 6,000 hectares covering 36 sites

to date, the DBP Forest program has not only contributed to the re-greening of the country but also plays a valuable role in encouraging people to look after the environment.


Giving backcommunityto the

Of the 36 DBP Forest project sites around the country, 21 are upland areas covering more than 5,600 hectares and 15 are coastal reforestation sites accounting for 430 hectares. Twenty of the 36 project sites are situated in Luzon, seven are in the Visayas, and another seven are in Mindanao. DBP partnered with different people’s organizations, local government units, and state universities in establishing these forest projects. Two DBP Forest projects located in Iloilo and Guimaras provinces provide clear pictures of what the bank’s reforestation program has done for host communities since it was launched in April 2005.

Lambunao, Iloilo forest The upland reforestation in Lambunao, Iloilo was launched on December 7, 2005 covering 500 hectares. DBP joined hands with West Visayas State University (WVSU) for this project that is situated inside the university’s satellite campus. WVSU’s College of Agriculture and Forestry is nestled inside the university’s vast 3,400-hectare property -- of which 500 hectares was allotted for two DBP Forest projects. Project I covers a

total area of 100 hectares while Project II has a larger coverage area of 400 hectares. Today, fruit-bearing trees such as durian, rambutan, lanzones, pomelo, tamarind, and mangosteen are fi lling up the hilly slopes of Lambunao within the Project I site. The Project II site is planted with the same fruit-bearing trees as well as forest trees including narra, mahogany, rain tree, acacia, ilang-ilang, bamboo, and kakawate. Most of these trees are expected to yield fruits 3-5 years from now. Before DBP entered into the picture, WVSU had long been troubled by illegal settlers who took possession of substantial portions of the school’s vast forest property for their kaingin farming. This slash and burn method of farming had also destroyed a large part of the forest cover of Lambunao. In 2005, DBP introduced the program that would become the university’s pilot project for forest rehabilitation.

Community-based undertaking In order to generate livelihood for settlers in the area, WVSU launched its Progress through Economics, Socio-cultural and Agro-

The thriving mangrove plantation in barangay Panobolon, Nueva Valencia, Guimaras


forestry Cooperation Extension and Development Program (PEACE) in 2006. The program gives farmers the opportunity to send a child to WVSU provided they plant trees and cultivate a portion of the project assigned to them. Thus far, more than 70 families are now benefi ting from this college scholarship program for their children. More importantly, the DBP Forest project has also taught former kaingineros the proper way of farming. As a kainginero, Reny Celeste initially thought that the scholarship grant being offered by WVSU was just a way to drive them off the university property. He was eventually convinced to apply for the program so that he could send his children to school. Since his acceptance to the program, Celeste has given up his slash and burn farming, and is now busy tending to the fruit-bearing trees he has planted within the DBP Forest area. In return, his older child is now a Forestry degree holder while the younger one is studying Education, thanks to scholarships from WVSU. Celeste now says the DBP Forest program has not only changed his views about farming, it has also taught him the proper way of cultivating and taking care of our forests. For Denmark Escantilla, it was also the DBP Forest program that opened the doors for him and his older brother to obtain college degrees. Born to farmer parents and with eight siblings, Escantilla had virtually no hope of pursuing a college education alongside his older brother. His mother applied for the PEACE program, which led to his older brother enrolling in a hotel and restaurant management course for free. In return, the Escantilla family was assigned to cultivate an area within the DBP Forest project site. With his older brother graduating after three years, it was the younger Escantilla’s turn to avail of a scholarship grant. Looking forward to fi nishing his Forestry studies, Escantilla hopes that his younger siblings will also be granted scholarship opportunities by WVSU.

Giving hope In addition to the PEACE program which has proven to be benefi cial towards the successful maintenance of the DBP Forest in Lambunao, WVSU’s satellite campus also hosts 34 Forestry students whose education is being funded through the DBP Endowment for Education Program (DEEP). Eighteen students are now in junior level, while the remaining scholars are on their second year of studies. DEEP’s scholarship assistance covers the whole range of a scholar’s requirements, including cost of living and allowances. The fi rst batch of these Forestry students initially worked at the school’s forest sites as grantees of WVSU’s work-for-study program before their acceptance to the DEEP program. One of them is Ian Casumpang. After high school graduation, Casumpang almost gave up on his college dream. He knew only too well that his mother, who was supporting nine children and his paralyzed father, had no means to send him to college. Casumpang was determined, however, to pursue further studies to help his family overcome poverty. Hearing about WVSU’s work-for-study program, he successfully applied and was

granted a slot. As a work-for-study scholar, Casumpang had to manage his time carefully so he could accomplish both his studies and work assignment at the DBP Forest. After a grueling freshman year, he was fortunate to be selected to be a DEEP scholar. Now a junior, Casumpang remains optimistic about fi nishing his Forestry studies with the help of DEEP, sans the diffi cult task of juggling school work and work duty at the DBP Forest site. Casumpang cannot fully express his heartfelt gratitude to DBP for the scholarship that continues to help his family in more ways than one. For Liezl Baron, enrolling in college was not even an option after she received her high school diploma. She lost her father when she was only eight years old, leaving her mother with the herculean task of raising and supporting a big family. With 23 half-siblings from her parents’ previous marriages, Baron almost did not fi nish her elementary and high school education, and was forced to take on odd jobs after graduation. These included employment at an electric repair shop in Laguna, and cashiering and waitressing at an eatery in Mandaluyong City. After almost a year, Baron moved back to Iloilo to work as househelp in the Manduriao district. It was providential that her employer was working at the WVSU main campus, and invited her to try her luck in applying for a DEEP scholarship. Now on her sophomore year as a Forestry student, Baron is extremely grateful to DBP for the rare chance to obtain a college diploma. She hopes to pass the Forester Licensure Examination immediately after graduation and obtain a job to help her family. Lykah Pontanes, a sophomore Forestry scholar, still remembers how it broke her heart when her father told her that she could no longer pursue college studies because of fi nancial diffi culties. With no permanent employment, the elder Pontanes was having a hard time supporting the studies of his four daughters. But Pontanes was adamant about her college dream. When a neighbor mentioned that DBP through WVSU was offering scholarships, she knew that it was opportunity knocking on her door. As Forestry students, Pontanes’ and her classmates’ regular routine includes tending to the trees planted in a designated project site. This includes weeding and fertilizing crops to sustain their growth. As a future forester, Pontanes hopes to someday reciprocate the opportunity granted to her by DBP. WVSU offi cials recently reported that the university has already planted 462 hectares with various fruit-bearing and forest trees.


A DBP staffer checks on the development of mangroves in barangay Panobolon.

DEEP scholars at work in a DBP Forest project site.

Ian Casumpang Liezel Baron Lykah Pontañes

2011 DBP DEVELOPMENT BANKER 26262011 DBP DEVELOPMENT BANKER

along the shoreline were abundant, and fi shing was bountiful. Then people started moving into their barangay and began to cut the mangroves for fi rewood. It was then that he noticed the decrease in fi sh catch. With the DBP Forest project, Macalalag is optimistic that the community is well on its way to restoring the once vast mangrove forest of Panobolon Island.

Commitment of local government Among the problems confronting the DBP Forest project in Guimaras is the continuous gathering of imbao, a type of mangrove clam usually found along the shoreline. The high demand for this type of sea shell in restaurants makes it a profi table source of income for many residents of barangay Panobolon. The sea shells are sold to wholesalers for P150 to P160 per kilo. However, imbao-gathering endangers the survival of propagules and hinders propagation. To collect the clams, gatherers have to dig them out from the shallow portion of the shoreline where propagules have been planted and are being cultivated. PGMAI members themselves report that continuous imbao-gathering destroys planted propagules making it diffi cult to sustain their propagation. To help resolve this problem, PGMAI has initiated discussions with Mayor Juan Delgado Gaitan of Nueva Valencia. Gaitan agrees that, “The DBP Forest project will eventually contribute more livelihood opportunities for many residents of barangay Panobolon. We all know that mangroves are home to a variety of fi sh and other sea creatures.

When this project becomes successful in due time, this will surely bring good results as far as livelihood for the residents here is concerned.” To address the problem of unabated imbao-gathering, the mayor’s offi ce is studying several options including regulating the activity, implementing a quota system, or imposing a moratorium on the gathering of imbao. “The municipal government plans to impose a suspension on imbao-gathering that will bar residents from collecting the mangrove clams for a period of time. This should give the propagules enough time to grow and propagate,” Mayor Gaitan explains. Mayor Gaitan also mentioned seaweeds

farming that the local government of Nueva Valencia expects to become an alternative mode of livelihood for many families in the municipality. As imbao-gathering has proven to be counter-productive to the restoration of the mangrove forest, seaweeds farming should give the residents of barangay Panobolon another income option. Now on its sixth year, the DBP Forest program has proven to be more than just a reforestation initiative. This multi-sectoral collaboration has also gone a long way in empowering local communities to be self-reliant and active players in sustainable development.

Denamrk Escantilla Reny Celeste

Right Photo: SAVP Aurora Maghirang of PD II with some farmer-benefi ciaries of DBP Forest in Lambunao, Iloilo. Also in photo are WVSU offi cials Dr. Eleodoro Alicante and Joel Araquil (4th and 5th from left, respectively)

Nueva Valencia mayor Juan Delgado Gaitan Salvador Macalalag Roselyn Habagat

Planting is expected to be completed by year end. The success of this forest project can be attributed to the time and sweat of various benefi ciaries whose partnership with WVSU and DBP have made it a fruitful undertaking.

Guimaras mangrove forest DBP partnered with the provincial government of Guimaras and a community-based people’s organization in the municipality of Nueva Valencia to develop a vast mangrove area along the shoreline of barangay Panobolon, an island-barangay situated south of the town. Launched on December 8, 2005, this DBP Forest project has an area of more than 26 hectares spanning Panobolon’s six sitios. Planting activities were started by members of the Panobolon Mangrove Growers Association, Inc. (PMGAI). Eight months after its launching, though, the project hit a snag. An oil tanker sank off the coast of Guimaras, spilling tons of oil into the waters off Nueva Valencia. The oil spill damaged substantial portions of the mangrove forest, which at that time already covered more than 10 hectares. The project was temporarily suspended, and re-planting of propagules resumed only a year later. Todate, PMGAI estimates that only 1.5 hectares remain to be planted with propagules. It is expected that once restored, the mangrove forest will boost the catch of this fi shing village. Barangay Panobolon’s estimated population of 1,000 residents depend largely on fi shing for livelihood.

PMGAI member Roselyn Habagat, a mother of seven children, recalls that her family’s daily catch of fi sh decreased with the depletion of the mangrove forest along the town’s shoreline. As such, restoring the mangrove forest was crucial to sustaining the family’s main source of livelihood. She adds that restoring the mangrove forest also protects their community from violent sea surges during storms. Another PGMAI member, Salvador Macalalag of Sitio Dako, reiterates that protecting the sea and its bounty is of utmost importance, as the waters off Barangay Panobolon is the source of their livelihood. He still remembers the time when the mangroves


public schools such as classrooms, libraries, laboratories, toilets, and suffi cient textbooks and teaching aids. The facility will give priority to 4th to 6th class municipalities and 4th to 5th class provinces. Local government units, with authorization from their local school boards and Sangguniang Bayans, may avail of loans under the said facility for projects such as land acquisition, infrastructure, furniture and equipment, supplies and materials, and special projects. Maximum amount of loans shall be up to 90% of total project cost or winning bid price, whichever is lower. Repayment term is up to 10 years inclusive of up to 2 years grace period on principal payments.

Cooperative Agricultural Lending Program DBP heightens support to the agricultural sector with the ACPC-DBP Cooperative Agricultural Lending Program Facility (CALP) that will fund stable cooperative banks and cooperatives extending agricultural loans to small farmers and fi sherfolk. The CALP will provide production and agricultural microfi nance loans to production of crops, livestock, poultry, and fi sheries. It will also provide fi nancing of on-farm or off -farm/ non-farm activities of agricultural households using the household cash fl ow lending approach. Eligible borrower-retailers for this facility are cooperatives and cooperative banks with at least two years profi table operations. Small farmers and fi shermen or their household members engaged in farming not more than seven hectares of land, or engaged in backyard poultry/ livestock raising, may avail of loans under this program. Eligible end-borrowers may also be those working in agricultural lands and projects; those operating fi shing vessels of not more than three tons capacity; those operating fi shponds of less than fi ve hectares or fi sh cages of less than 400 square meters; those working in fi shing boats, fi shponds or fi sh processing establishments; and those who are engaged in small scale fi sh and other aqua production, processing, and distribution. Loan term will run for three years while the loan amount will be based on the amount established and proposed by the retailer and approved by DBP.

Financing for the Water Sector Safe, potable and aff ordable water supply to waterless areas around the country is within reach with the launching of the Financing Program for the Water Sector (FPWS). The program is in line with DBP’s key thrust of promoting environmental protection and sustainable development, particularly the sustainability of the country’s water resources.

D E V E L O P M E N T N E W SInnovative credit facilities launched

DBP strengthens its development mandate with four new highly-responsive fi nancing programs that aim to catalyze entrepreneurship and generate livelihood opportunities,

as well as the delivery of basic services where most needed.

OFW Reintegration Program To support their entrepreneurial activities, a credit facility for existing or start-up business ventures of OFWs and their families has been opened by DBP. The DBP-OFW Reintegration Program (DBP-OFWRP) is part of the bank’s program for small and medium enterprises and provides OFWs with special terms including lower interest rates, less stringent security provisions, and a generous grace period on the payment of principal amount depending on project cash fl ows. OFWs who are members of the Overseas Workers Welfare Administration (OWWA) with existing or completed employment contracts may apply for a loan up to 80% of the total project cost ranging anywhere from P300,000 to P2-million. Only one OFW per household shall be eligible under the program. OFWs may be represented by immediate family members (1st degree of consanguinity) with Special Power of Attorney. Interest rate starts at 7.5% per annum fi xed reviewable annually with a maximum repayment term of seven years.

Loans may be used for construction, renovation, expansion or repair of building for use as business site; working capital for business venture; acquisition of equipment; and other business-related purposes. Priority investments and industries under this program include franchising, tourism and related industries, health care and allied industries, and agribusiness and related businesses. The program is jointly implemented with the Overseas Workers Welfare Administration and the Land Bank of the Philippines with a total of P2-billion in program loanable amount.

Financing for Public Basic Education DBP is boosting its support to public education with its P10-billion Financing for Public Basic Education (FPBE) facility that aims to improve the delivery of educational services in the country, especially to low-income communities. The FPBE will also support the national government’s eff orts to achieve universal primary education. The FPBE is expected to catalyze the improvement of the public school system by encouraging local government units to invest in facilities that will improve the learning environment of



DEVELOPMENTNEWS

The FPWS is expected to help increase the number of households with sustainable access to safe and aff ordable drinking water, and enable local government units, water districts, and private water service providers to initiate, improve and sustain water supply services. The FPWS is also designed to assist the national government in its commitment to the Millennium Development Goal of attaining 86.9% of the population with access to safe water by 2015. DBP is investing an initial P5-billion for the program to assist 498 waterless municipalities, 780 water districts operating below 50% service coverage, and other water service providers with below 50% service coverage. The bank currently has P1.2-billion worth of pipeline projects, bulk of which will assist projects in the provinces of Ilocos Norte, Ilocos Sur, and La Union in Region 1; Aurora, Bulacan, Nueva Ecija, Tarlac, and Zambales in Region 3; Batangas, Cavite, Laguna, Quezon, Rizal, Romblon, and Occidental Mindoro in Region 4; and Western Samar and Leyte in Region 8. The bank is undertaking continuous coordination with government agencies involved in the project such as the Local Water Utilities Administration, National Anti-Poverty Commission, and the Department of Interior and Local Government to ensure the eff ective implementation of the program. Non-operational water districts or those operating below 50% service coverage, local government units without level 3 water supply system or with level 3 water supply system but with less than 50% service coverage, and participating fi nancial institutions and microfi nance institutions are eligible to borrow under this facility. The program will fund the source development, construction, expansion, rehabilitation and improvement of level 3 or 2 water supply projects. Level 2 is defi ned as communal or public faucets at strategic locations in the community while level 3 is a piped connection to households and commercial establishments. The program will also promote the effi cient use of water resources and climate change technologies such as the development of alternative water impounding areas and rain collection system.

International award for CamSur project

DBP’s support for the local growth and development

of Camarines Sur bagged the award for local economic development during the 2011 Association of Development Financing Institutions in Asia and the Pacifi c (ADFIAP) Development Awards. The award recognizes DBP’s collaboration with the provincial government of Camarines Sur, particularly the bank’s credit support to fi nance

various infrastructure projects designed to boost tourism, trade, and community services in the province. The DBP credit facility also supported other projects such as public school buildings, the construction of concrete roads, bridges and public facilities like barangay halls, day care centers, public markets, drainage and water systems. ADFIAP is an organization of development banks and other fi nancial institutions engaged in the fi nancing of development in the Asia-Pacifi c region. Founded in 1976, it has 120 member-institutions in 43 countries. The annual ADFIAP Awards recognizes and honors member-banks that have undertaken or assisted projects that have created a development impact in their respective countries by implementing or enhancing outstanding and innovative development projects.

Pioneering agricultural hub in Bulacan supported

DBP has extended a P536.3-million loan to Southeast Asian Commodities and Food Exchange, Inc. (SACFEI) for the development of the fi rst phase of the North Food

Exchange (NFEx), a special economic zone in Balagtas, Bulacan that is being eyed to become the distribution hub of northern Luzon. NFEx will be the country’s fi rst agricultural depot where farmers, fi shermen and entrepreneurs can directly sell their produce to end-users, eff ectively blocking middlemen participation and translating to at least 40% reduction in cost of goods. The project is in support of the national government’s eff orts to establish more agricultural trading centers that will eliminate middleman transactions and opportunities for corruption, while improving the economic conditions of farmers and fi shermen, and making basic food aff ordable to the general public. NFEx will sit on a 5.2 hectare lot with 969 stalls for agro products, fi shery products, poultry and livestock, groceries, processed foods, specialty products, food ingredients, fast food and commercial establishments. It will also house grains terminals, cold storage, warehouses, slaughterhouses, produce and wet markets, transportation, and recreational support facilities. NFEx is foreseen to benefi t from the interconnection of major infrastructure by 2014 such as the Balagtas NLEX interchange, NLEX service road, North Rail from Monumento to Clark, and MRT 7 from San Jose Del Monte, Bulacan to Quezon City. NFEx took off from a nine-year extensive research on successful cooperatives, agrofood exchanges and distribution models from China, Korea, Thailand, and Vietnam.


DBP executive vice president Jesus Guevara II in a handshake with SACFEI chairman Josefi na Dela Cruz after the loan agreement signing. Also in photo are (from left) Foundation for People Development president Rene Gayo, DBP senior vice president Cresenciana Bundoc, SACFEI president Fidel Bugayong, Dr. Pilar De Ocampo, and Atty. Jose Villamor of SACFEI.

DBP chief operating offi cer Edgardo F. Garcia (middle) receives the ADFIAP award from ADFIAP chairman Nihal Fonseka (right).


D E V E L O P M E N T N E W S

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Olongapo City sanitary landfi ll project fi nanced

DBP has signed a P383.3-million loan agreement with the local government of Olongapo City for the establishment of a sanitary landfi ll and materials recovery facility as part

of the bank’s eff orts to advance environmental protection in the country. The loan will specifi cally fi nance the design, development and construction of the Olongapo City Cabalan Sanitary Landfi ll. It will also fund the purchase of landfi ll equipment, additional mobile garbage bins, and a materials recovery facility. The project will provide a legally and environmentally-acceptable waste disposal site for Olongapo City residents, the businesses in SBMA, and for nearby municipalities. Upon operation of the sanitary landfi ll, other local government units that may also benefi t from the landfi ll operation include the provinces of Bataan, Pampanga, and Zambales. The project will also help the local government comply with Republic Act No. 9003, or the Solid Waste Management Act of 2000, mandating all local government units to establish and develop a sanitary landfi ll facility to enhance environmental protection and to maintain ecological balance. The project is expected to prevent land pollution by providing a proper disposal and storage method for municipal solid waste, thereby avoiding possible contamination of the environment, and nuisance and hazards to public health or safety. Proper closure of the existing dumpsite will also contribute to improving health and sanitation conditions in Olongapo City, preventing the occurrence of related diseases, thus improving the quality of life for the city’s residents. Positive environmental impacts can also be expected through the recovery of recyclable materials thereby conserving natural resources, prolonging the useful life of materials, and reducing the volume of wastes for disposal. Phase 1 of the landfi ll operation is also expected to generate an average of P104-million annually in additional net income for the LGU coming from tipping fees and increase in local fees. The composting component of the project can generate carbon credits as conversion of organic wastes via composting reduces emission of methane, a potent green house gas. The project may also be feasible, subject to further study and validation, for CDM registration through avoidance of biogas generation via composting and closure of the existing disposal facility. The project is expected to create employment among local residents. Those currently employed by the existing dump operations will be employed in the various components of the sanitary landfi ll facility.

For 2011 to 2021, Olongapo City’s solid waste management plan includes: establishment of a three-stream waste generation at source (recyclables, biodegradables, residuals); public promotion program for source segregation; containerization through additional mobile garbage bins; and a composting system at either household, barangay, and centralized site levels. DBP had previously extended a loan to Olongapo City for the containerization of its solid waste in 2008 by acquiring 7,000 pieces of mobile garbage bins for temporary waste storage, and 7 garbage compactor trucks to collect waste from 17 barangays.

DBP supports Tarlac water coverage expansion

A P127.9-million term loan agreement has been signed by DBP with the Tarlac City Water District (TCWD) to fi nance the expansion of its water service coverage and supply

capacity augmentation. This project is in line with the bank’s environmental thrust of ensuring stable water supply in the country, with the credit facility expected to help improve the water district’s supply capacity. TCWD presently has 21,716 active service connections. Upon completion of the project, TCWD will be able to provide an additional 4,964 connections by the end of 2014 in 10 barangays -- Alvindia I (Sta. Cruz), Aguso, Dalayap, San Jose, San Manuel, Balingcanaway, Amucao, San Luis, San Jose de Urquico, and Sapang Maragul. The project will benefi t an estimated 9,702 households and 50,454 residents in the city, and expand the water district’s coverage area to 53% from the current 39% covering 30 out of 76 barangays of Tarlac City. The expansion project will include the installation of pipelines and electro-mechanical and laboratory equipment, well drilling, and construction of reservoir and pump house. The project is expected to promote environmental conservation and management, especially in the reduction of water borne diseases. The project is co-participated in by the Bank of the Philippine Islands (BPI), with the LGU Guaranty Corporation, and the Local Water Utilities Administration (LWUA).

Financing for water supply and wastewater project in Boracay

DBP and Security Bank Corporation have signed a term loan facility with Boracay Island Water Company (BIWC) to partially fi nance additional capital expenditures for its

environmental projects in Boracay. The project, to be fi nanced by a P500-million loan with option to upsize to P1-billion, is the second under the Philippine Water Revolving Fund (PWRF), a fi nancing mechanism that brings together DBP, the Japan International Cooperation Agency, United States Agency for International Development, LGU Guarantee Corporation, and Municipal Development Fund Offi ce to meet the fi nancing gaps in water supply and sanitation projects. This public-private partnership project is expected to promote sustainable development in Boracay Island, a major tourism area of the country, in terms of economic, social and environmental impact.

27 2011 DBP DEVELOPMENT BANKER29

2011 DBP DEVELOPMENT BANKER

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