Iloilo and Iloilo Ferries Should Develop Zamboanga City as a Distribution Hub

I think one of the reasons for the success of Metro Cebu as a manufacturing and industrial center is first they did not simply rely on Metro Manila for its manufactured goods. Actually, they had the confidence that they can compete with the national manufacturing and industrial center and history proved them right. Metro Cebu can stand on its own and can compete with Metro Manila (and CALABARZON) in the supply and sales of manufactured goods in the south of the country and that means the Visayas and Mindanao in general.

Metro Cebu has some key advantages. One is that is the fact that the Visayan islands and Northern Mindanao (not the region but the northern part of Mindanao that borders Mindanao Sea from Surigao to Zamboanga del Norte) are practically their backyards. Second is Cebu has great shipping companies, their overnight ferries mainly, that connect to this wide area, taking in their goods for distribution at low rates and with the ease of transporting goods that the manufacturers simply need to bring their trucks to Cebu Port and everything will be automatic and only the destinations and consignees need to be worked out. And mind you Cebu does not have the traffic of Metro Manila nor its mulcting policemen, traffic aides and thugs or its thieving youth that prey on trucks while in traffic. Third maybe is this wide area is predominantly Cebuano-speaking like Cebu (never mind the crazy, unintellectual local language classification called “Binisaya”of Mindanao which is no different from Cebuano and is not recognized by any respectable language classification group outside the country).

Iloilo

Iloilo City (From http://www.iloilo.gov.ph)

I was wondering if Iloilo is developed as a manufacturing center if it can compete with Cebu should an Iloilo Ferries be established to help distribute its goods. My view is they will have a hard time competing with the premier port of entry of Northern Mindanao which is Cagayan de Oro. Iloilo might even have difficulty competing in Iligan and Ozamis because Iloilo is still farther and the cargo rates will probably be higher and I do not know if Iloilo Ferries will be willing to subsidize to achieve parity with the rates of the Cebu shipping companies. But then Iligan and Ozamis loyalty is still to Cebu because the links of the businessmen there are historically connected with Cebu and some are even just the expansion of Cebu businesses and businessmen. And if we will speak in a polite manner, it is generally known that Cebuanos and Ilonggos are not exactly the best of buddies.

Now, Dipolog and Dapitan is closer to Iloilo than the rest of Northern Mindanao. But then it is closer too to Cebu and the closest to Cebu actually like Surigao. And besides the ships to Dapitan have the intermediate port of Dumaguete to boost cargo volume and hence make shipping rate to Dapitan not that expensive for Dapitan and Dipolog as the two cities don’t have the volume of the likes of Ozamis which is a bigger and more important distribution center whose tentacles reach as far as Pagadian and Zamboanga Sibugay plus the western portion of Lanao del Norte. In Dipolog and Dapitan, Iloilo will still be underdog compared to Cebu.

But there is a great distribution center in Western Mindanao whose population is nearly as big as Cagayan de Oro and whose tentacles reach many provinces. This is Zamboanga City, the regional distribution center of the western part of Mindanao whose link with Cebu is not that strong compared to the likes of Dapitan, Ozamis, Iligan, Cagayan de Oro, Butuan and Surigao. It does not have the multiple nightly ships of the cities and ports I just mentioned. In fact it only has a weekly ferry from Cebu plus a few cargo ships. It is also not Cebuano-speaking, in the main, although Cebuano is also spoken there but not by the businessmen and traders.

Zamboanga City’s distribution network reaches Basilan, Sulu, Tawi-tawi, Zamboanga Sibugay and the western portion of Zamboanga del Norte and that is a wide area in itself and more than the size of one normal administrative or political region. Plus Zamboanga City itself is the size of a province and they have their own city districts. To illustrate its size, going east over 80 kilometers has to be negotiated before one reaches the Zamboanga Sibugay boundary.

Zamboanga_City_Skyline_2009

Zamboanga City (From Zamboanga.com)

In Zamboanga City I think Iloilo has a good chance versus Cebu in the distribution game should Iloilo go the way of Cebu in manufacturing (and they should I think) and be supported by Iloilo Ferries (if it materializes and it should, I think also). In distance Iloilo is nearer to Zamboanga than Cebu, its traders are not from Cebu although they base now their scions in Cebu to avoid kidnapping which is always a threat in Zamboanga City (and in Cebu they are able to enjoy their wealth unlike in Zamboanga). In short, Zamboanga City is not dominated by Cebu, tradewise.

Some might argue that Iloilo does not have a complete array of goods. But I would also argue neither is Cebu like for example Cebu has no cigarette manufacturing and that is an important grocery goods, saleswise. Cebu does not manufacture canned fish either. Actually, it is maybe only the National Capital Region plus its spillover to CALABARZON that has the complete line-up of goods (I am not so sure of that because we import goods we cannot produce).

Iloilo, I think, should aspire to be a great manufacturing center like Cebu and not rely on sugar like before. The time when sugar was still gold was long gone and it worked only anyway because of the US quota system where a fixed volume of sugar was purchased by the USA at support prices which was higher than the world market price. That was when there were few producers of sugar cane but now so many produce that crop already like Thailand and since their production and sugar mills are more modern their prices are lower. Sugar production is actually a losing enterprise locally and sugar prices have to be kept artificially high, nearly double the world market price so that sugar mills and haciendas can continue to produce sugar. I don’t think this system can go on as the Philippines is a member of the WTO (and we can be called for such practice) and soon the Filipinos will learn the true nature of our sugar prices and how expensive it is compared to the prevailing world market price.

Iloilo can have a wide natural market for manufactured goods. That includes Panay and Negros islands and maybe Western Mindanao, the area and not the political or administrative region. Plus Palawan and there is no harm in trying Masbate and the Bicol Region plus maybe Southern Mindanao which is already far from Cebu and Metro Manila, if Iloilo Ferries will dare support operations there and why not? General Santos City and South Cotabato have a lot of Ilonggos so much so that Ilonggo is practically the lengua franca there and not Cebuano. So an extension there might not be unnatural after all nor too far.

Western Visayas has a lot of elite families which can finance the industrialization of Iloilo and maybe Bacolod too like it was the local elite of Cebu which financed its industrialization. It is even easier to borrow capital now or tap the stock market or go the joint venture way as long as the project is sound and there is market that can be tapped. But for all its plans and ambitions there must be a dedicated shipping company willing to support the distribution of Iloilo goods and that is where Iloilo Ferries would have to come in.

There shouldn’t be just two strong manufacturing and industrial centers in the Philippines which are Manila and Cebu at the moment. If we want more development, more rural development and development all around there should be more strong manufaturing and industrial centers and Iloilo should be among those. I just hope Iloilo would have that vision and ambition like I hope Davao would also catch that and not just be known for Cavendish bananas, the new counterpart of sugar cane and which is gold now.

The ball is in your court, Iloilo and Iloilo Ferries.

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