Bangsamoro Investors Guide


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The Bangsamoro Investors Guide is a 100-page special report on the state of the Bangsamoro region and how to safely invest there.

Part One discusses the region’s geography, culture, economics, politics, and security situation.

Part Two highlights regional best practices from four veterans in the region, as well as security recommendations on due diligence, community-based security, and relations with the military and police.

Executive Summary

Geography and Culture

The Bangsamoro Autonomous Region in Muslim Mindanao (BARMM) covers over 37,000 square kilometers in five provinces and three cities: Sulu, Tawi-Tawi, Lanao del Sur, Maguindanao, and Basilan; and Cotabato City, Lamitan City, and Marawi City. Visitors can choose between four airports, including direct flights from Manila to Cotabato City offered by Philippine Airlines and Cebu Pacific. In the Bangsamoro region, the traditional Muslim leadership are indistinguishable from the formalized, elected leadership. Accordingly, personalistic ties are more important than professional ties. There are six different Muslim ethnolinguistic groups in the region.

 

Economics

Government figures for Regional Gross Domestic Product, growth rates, construction, businesses, employment, and wages paint the picture of an affordable, developing region with high growth rate potential, particularly as the political situation continues to stabilize.

The region’s economy is mostly agricultural, although the services sector has grown over recent years. The handful of large businesses in the region were in agriculture, forestry, and fishing, manufacturing, and education. The BARMM region has the lowest minimum wages in the country, and wages are likely to remain low relative to the rest of the country for some time.

 

Regional Advantages

The Bangsamoro region’s great advantage lies in its potential for rapid economic growth, coming from a very low base. There are few large businesses, and early movers are likely to benefit from market share opportunities in an unsaturated commercial and industrial space.

The new government heralds the institutionalization of stabilization and centralization policies, simplifying investment procedures as investors will only need to deal with regional and local officials. The climate is noted to be good for agriculture, and there are large plots of fertile land, and minimum wages are the lowest in the country.

 

Industry Players

PSA provides a list of the largest and most successful industry players in the region, focusing on the industries of mining, corn, bananas, palm oil, cassava, logistics, and petroleum.

 

Politics

The BARMM replaces the ARMM with the passage and approval of the Bangsamoro Organic Law in 2019. The President-appointed Bangsamoro Transition Authority will govern until 2022. The transition seems to have been fairly organized and peaceful. PSA provides a short background for key Bangsamoro officials, and the full list of the Bangsamoro Parliament interim members, their affiliated provinces, and their affiliations.

A discussion of the Bangsamoro region’s foreign links follows, notably Brunei, Turkey, Indonesia, and Malaysia. The region has shown strong international connections to these countries in the past, including formal agreements, coordination with national governments, socioeconomic development grants, and peace talks.

 

Security

Currently, the national government have made progress both politically and militarily in diminishing the impact of insurgency and terrorism.  While the implementation of the Bangsamoro Organic Law has been a positive step for the long-term trajectory of peace in Muslim Mindanao, the continued operations of threat groups pose potential risks to organizations and businesses in the region.

PSA provides in-depth profiles of relevant threat actors, their pattern of criminal activities, and the type of violence relevant to businesses. These include criminal groups and bandits, the Bangsamoro Islamic Freedom Fighters (BIFF), the Abu Sayyaf Group (ASG), the Maute Group, and other threat group cells.

 

Success Stories

PSA analyzes in-depth interviews with veterans of the region Matling Industrial and Commercial Corporation, Lamsan Group of Companies, Mount Kalatungan Agri-Ventures Inc., and Agumil, organizing their insights into best practices. The success stories highlighted the importance of community engagement, particularly hiring local, living in the community, consulting locals, providing social services, safety, and food security, and conserving the environment through sustainable business.

 

Investing

Officials in the BARMM are pointing investors to agriculture and fisheries as top industries. Recent incentives given include fiscal incentives such as 4 to 6 years income tax holiday, reduced duty importation of capital equipment, exemption from wharfage dues for exporters, and customs bonded warehouse facility.

PSA notes key economic opportunities as identified by the Bangsamoro Regional Board of Investments and Philippine Business for Social Progress for rubber, bananas, coffee, rice, corn, poultry and livestock, fishery, coconut, cassava, food processing, durian, mangosteen, lanzones, abaca, forestry, and seaweed culture in specific provinces. Specific industry needs identified by the JICA and Department of Trade and Industry (BARMM) include input supply, processing, logistics, and marketing.

 

Staying Safe and Secure

PSA discusses five steps for conducting due diligence, which can prevent a wide range of ethical, reputational, and legal issues. Securing your business often means securing the community your business is based in, highlighting the importance of community-based security. PSA illustrates the example of Canatuan Mine in Zamboanga del Norte, where TVI Pacific Inc. had to interact and build relationships with local tribal groups, the formal government authorities, and small-scale miners operating in the area.

PSA also recommends maintaining relations with the Armed Forces of the Philippines and the Philippine National Police, particularly by using the Voluntary Principles on Security and Human Rights as general guidelines for companies engaging with public and private security providers, to ensure human rights are respected.