Posted on Saturday, October 23, 2002

Bondoc Peninsula’s growth 
stunted by insurgency

By Dave L. Llorito, Research Head and Meryl Mae Marcon, Researcher

First of 2 parts

Bondoc Peninsula — The battered De Gloriam bus approaching Macalelon town came to a sudden, grating halt. Ahead, a huge cargo truck laden with construction materials was blocking the road.

Heavy rains the day before had turned the gravel road into a mud pit. The more the truck struggled to break free from the muddy trap, the deeper it sank in the muck. With only one lane left open, vehicles had to wait their turn, guided by a few good men who volunteered to direct traffic. In just a few minutes, the road approaching this sleepy Bondoc Peninsula town had become a bottleneck.

As the bus resumed its long torturous crawl to Catanauan, Bondoc’s commercial center, the trip doesn’t get any better. The road, which winds through vast expanses of rolling hills and coconut trees, is more of an obstacle course than a reflection of  an economically distressed wilderness.

Isolation easily comes to mind when pondering why this part of Quezon appears to have been stuck in misery while the rest of Southern Tagalog had surged ahead. Bad road infrastructure is the most visible culprit. It is this isolation that has spawned the communist insurgency in the area and sca­ring away local and foreign entrepreneurs that could have injected some life into its lethargic economy.

Government initiative

The government tried to address the urgent need to develop Quezon, particularly the Bondoc Peninsula, when it launched the Bondoc Peninsula Development Project (DP) in the mid-80s.

The project covers 12 municipalities, mostly fifth and sixth class, composed of 324 poor barangays in Quezon’s third district. The area of coverage is vast — 222,254 hectares, populated by less than half a million people. Eighty percent of the households there were into subsistence farming (mostly coconut monocropping) and fishing, getting by with an average annual income of P5,000 to P6,000 per year.

In 1986, the government commissioned a study intended to rehabilitate and build national and farm-to-market roads in the peninsula.

The results of the study were presented to the German Agency for Technical Cooperation (GTZ) for potential financial support. By 1988, various government institutions, non-government organizations, religious groups, business organizations, small coconut farmers’ organizations, and people’s organizations had already attended a planning workshop to define the strategy for growth.

One of the main recommendations was to enhance agricultural production and diversification by constructing all-weather roads and bridges as well as efficient barangay road networks.

The workshop’s participants were one in characterizing the marketing of the area’s farm produce as ineffective. They cited factors like low allocation for road maintenance, lack of road construction materials and equip­ment, underdeveloped or missing road network, limited marketing outlets, lack of transport services, among others. These problems in turn resulted in communications difficulties, inadequate communication facilities, and insufficient power supply.

Insurgents’ reaction

The local communist rebels felt threatened by the project. Better roads would enable government soldiers to react faster to the activities of the New People’s Army (NPA) in Southern Tagalog region. The NPA in the area is among the strongest in the country, capable of mounting battalion-size operations against military and police outposts as well as municipal halls.

Bondoc Peninsula is strategically important to the NPA. It is a jump-off point for operations in neighboring areas like the Sierra Madre, Mindoro, Marinduque, and Bicol. When pursued by government troopers, the rebels could easily disperse and vanish into these provinces. Quezon could even be an ideal platform from which to launch an attack on the seat of power in the National Capital Region. Acting on the NPA’s concerns, the National Democratic Front (NDF) lobbied hard in Germany against the Bondoc development project. It worked. In 1989, the German government dropped the project’s road component for fear that the technical advisers it would send to the area would be at risk. Originally meant to provide market linkages, the project was reconfigured to fit broader concerns like agrarian reform, coastal resource management, health care, and enterprise development minus a very vital component which is road infrastructure.

After several years of implementation, the project has contributed a lot in terms of people’s empowerment. “Agrarian reform has achieved land distribution about 80 percent of the planned targets [by the Department of Agrarian Reform],” says Antonio Robles, senior economic development specialist of the National Economic and Development Authority in Southern Tagalog. “However, the economic achieve­ments were rather marginal.”

“Land distribution did not increase family income as expected. Initial results from the implementation of a farming technology . . . shows that maize yields from 0.6 to four tons per hectare by applying fertilizer and proper crop management,” says Robles in a report. “In some hilly places, farmers produce a substantial crop of bananas and small livestock. However all efforts in increasing agricultural production through new technologies are hampered by inaccessibility of inputs and markets for produce, major difficulty in marketing agricultural production due to lack of farm-to-market roads, and lack of irrigation facilities.”

Asked what would have happened had the road component been retained, Robles replies: “Economic growth in the area could have been tremendous.”

Millstone around Quezon’s neck

Some residents in the province, including local officials, look at the NPA presence as a “necessary evil.” One mayor in the third district says the rebels’ threat of “swift justice” has checked the rise of local goons and warlords. But they also feel that their localities missed out on so many economic opportunities because of NPA activities in the peninsula.

Prudencio Maxino Jr., mayor of Mulanay (about 12 kilometers from Catanauan) says that Smart Communications tried to set up a tower in 1998 to serve as its relay station. He said he requested that the tower also have a cellular phone service to serve the needs of its constituency and nearby towns. Smart agreed. The tower was built but until now, it is not yet operational.

Maxino says he did not know why the tower remains idle, but he heard that the rebels were demanding that Smart pay “revolutionary taxes.”

Revolutionary taxes are just one of the burdens that many small entrepreneurs in Quezon have to bear. The “taxpayers” are store owners, warehouse operators, rice mill owners, copra traders, bus operators, public works contractors, and traveling sales persons. To the extent that revolutionary taxation could signify NPA’s political and military capability, estimates of the NPA’s tax take vary widely, depending — so it seems — on the person’s political sympathies.

For instance, Billy Andal, a businessman engaged in com­munications, publishing, and construction and a former Quezon City board member known for his “progressive” views, volunteers that the best way to estimate NPA tax collections is by adding up the total public works projects and deduct five to 10 percent off the total project cost. Applying this method to available data on major road and bridge projects implemented in the province, The Times estimates that the NPA could have collected about P12 million to P24 million in 2001, or about P1 million to P2 million a month.

Andal says contractors are forced to pay the tribute to spare their equipment from sabotage. He says that one Korean construction firm working on a project in Mulanay who refused to pay revolutionary taxes lost hundreds of millions when rebels set fire to its equipment.

A P1 million to P2-million monthly take is modest when compared to estimates based on military figures. The Citizen Research Network places the peso value of the “rev tax” for Southern Tagalog at about P20 million to P25 million a month, and about P2.5 million to P5 million for Quezon.

Which of these figures are closer to the truth only the NPA knows. This writer went around the province interviewing several business persons hoping to gather reliable figures. One NGO worker who requested anonymity says his relative, a copra trader, has been shelling out about P5,000 a month to the rebels. One salesperson admitted paying taxes every six months but refused to say how much. “We actually have no choice,” he says. “It’s a fact of life for us traveling salespeople and for most business people here.”                       

Despite its unfortunate brush with the NPA, the Korean firm chose to stay on and finish its contract. Other business operators have chosen to pull out than pay revolutionary tax. In Catanauan, among the businesses that have pulled up stakes are the warehouse operations of one soft drink and beer company.

Milagros Carlos, who has businesses in Lucena and is the regional governor of the Philippine Chamber of Commerce and Industry for Southern Tagalog, says that while NPA taxes are a concern for some entrepreneurs in the third and fourth district of the province, it is not a serious problem in the second district where the local economy is more vibrant. Nevertheless, she acknowledged that it is a fact of life that many businessmen have to live with.

Despite its fearsome reputation, the NPA is not known to punish “delinquent” taxpayers. Aling Virgie, who runs a small hotel for traveling salespersons, says rebels once approached her to collect taxes. She initially obliged, but eventually stopped when business went bad.

“They would not actually force you to pay if they realize your business is just small,” she says. “Nevertheless, many small entrepreneurs in the outskirts of the city had nervous fits every time the NPA collector shows up.”

She herself eventually folded up her retail business and focused on her small hotel and restaurant. “It’s hard if you pay for two businesses,” she says.

“You already have liabilities even if you haven’t started yet,” says Raul (not his real name), a salesman for Fortune Tobacco who is just two months on the job. “The result is that in place, development has been stunted.”

Psychological impact

The extent that revolutionary taxation reflects the NPA’s military capability is also unclear. From 1999 until last September, military intelligence counted 150 NPA “activities,” including raids on police and military outposts, ambuscades, harassments, liquidation, abduction, sabotage and arson. Almost six out of 10 of the activities were harassments, liquidation mostly of politicians, sabotage and arson, and abduction.

Among the most sensational incidents were the killing of Cong. Marcial Punzalan in 2001; the torching of the Korean firm’s construction equipment in Mulanay a few years ago; the abductions of a police chief in Dolores and of a military officer. Only 17 percent were “military” in nature comprising of attacks on police and military troops and installations. That’s equivalent to one military action in every 50 days. When NPA activity was at its peak in the ‘80s, the insurgents were engaging the military almost once or twice in a week.

Nevertheless, much of the damage done by the presence of communist rebels is psychological. Asked questions concerning insurgency, most of the top political and business leaders would first look around before whispering their answer.

“We recently had representatives from the Mitsui Group of Companies exploring for investment opportunities in the province,” says Dr. Henry Buzar, an economist from the Lucena-based Enverga University and technical adviser to Wilfrido Enverga, the governor of Quezon. He said the business group was attracted by the availability of reliable power coming from Pagbilao and Lucban provided by foreign investors Mirant Philippines and Ogden-Bechtel.  “After hearing some news about the recent NPA activities, they stopped talking to us,” Buzar says.

It was just another opportunity lost for the province, however. Buzar recalls that in the ‘90s, Hopewell, a conglomerate owned by a Chinese taipan, proposed the extension of the South Luzon Tollways from Alabang up to Pagbilao, whose port would be upgraded also by Hopewell. Pagbilao was also being eyed as the site of a special economic zone that would generate exports, provide jobs for Quezon residents, and energize municipalities in the province’s interior through demand linkages.

The project would have started with the rehabilitation of the existing Alabang viaduct. The highway from Alabang to Calamba, Laguna would then be expanded to six lanes. A new road would be built from Calamba to Sto. Tomas, Batangas, including the construction of a new road linking to the Southern Tagalog Arterial Road. The last phase would be a new road from Sto. Tomas to Lucena, Quezon, and on to Pagbilao. Initial estimates for the project: P29.27 billion.

The tollway project was opposed by the rebels and left-leaning groups, citing “environmental reasons.” The protests resulted in costly changes and delays. What finally killed off the project was the Asian crisis, Buzar, who was one of the project consultants, says,

That was when Hopewell ran into financial problems and what resources it had left were diverted to the construction of the Southern Tagalog Access Road (STAR). Without the tollway project which would have significantly cut travel time to the Lucena-Pagbilao area, the international port and the ecozone projects would not have been viable.   

“We are the last syllable of the Calabarzon Project,” says Buzar. “And it is unfortunate that we are also at the tailend in terms of economic development because of this lingering peace and order problem.”

Missed opportunities

Quezon’s economic woes resulting from isolation and insurgency show up clearly in investment statistics. In 1987, President Aquino issued Executive Order 226 allowing the Board of Investments to grant incentives to local and foreign investments. The government used this policy to develop the Calabarzon region. Since that year until 2001, the entire Southern Tagalog was able to attract at least P352-billion worth of investments. About 86 percent of these investments went to Laguna, Cavite, and Batangas, and Rizal — Quezon’s neighbors. Quezon only got 14 percent.

All other development indicators show that Quezon has missed a lot of opportunities. In terms of road quality, the latest data from the Department of Department Public Works and Highways shows that only 25 percent of Quezon’s roads are either paved or concreted. The percentage is low when compared with Laguna’s 66 percent, Cavite’s 56 percent, Batangas’ 41 percent, and Rizal’s 57 percent. These figures indicate that the corporate sector is hesitant to invest in the province’s telecommunications infrastructure.

Only 3.6 out of 100 households in Quezon have access to landline telephones, as compared to Cavite’s 14.4, Batangas’ 10.1, Laguna’s 13.0, and Rizal’s 13.0.  The province also has a business density of 2.09, indicating that there are only two business establishments per square kilometer in the area. In Cavite, the figure is 15.7, in Laguna, 17.0, Batangas, 6.8, and Rizal, 23.7. Apparently, entrepreneurs are more inclined to put their money in Quezon’s neighbors.

Conclusion