OBG talks to Arnel Paciano Casanova, President and CEO, Bases Conversion and Development Authority (BCDA), and Chairman, Philippine Investments Promotions Plan (PIPP) Steering Committee

Interview: Arnel Paciano Casanova

To what extent can the development of economic zones and freeports drive growth outside of Metro Manila and in the broader region?

ARNEL PACIANO CASANOVA: At the BCDA, we look at ourselves primarily as movers of economic development since our mandate is to transform former military bases into economic zones and freeports. In order to sustain current economic growth, we have to create these new urban and economic centres, not only in Metro Manila but also in outside areas so they can act as sustainable economic catalysts. The plan is to generate sustainable developments and communities where business enterprises and people merge to create more value for the economy, not simply to build manufacturing or industry-focused economic zones.

Many businesses are still biased towards Metro Manila; however, as it becomes more congested and unable to sustain its steady growth, we need to create alternative urban districts either in Central or Northern Luzon. We are currently master-planning different sites, with the biggest one being Clark, where we expect to build a smart and green city. We are seeking global partners in delivering needed infrastructure and real estate development. We are also seeking to build infrastructure to connect these emerging growth centres.

For instance, through the Subic-Clark-Tarlac Expressway (SCTEX), a high-speed modern toll way, we connect Clark Freeport Zone and its international airport – the country’s largest in terms of land area and the first inside an ecozone – with Subic Bay Freeport, another future economic driver in the country. In addition, we will be opening the first phase of another toll way in 2014, connecting our John Hay Special Economic Zone in Baguio with the Poro Point Freeport Zone in La Union, to further enhance their potential as economic drivers. Lastly, we also hope to connect Metro Manila with Clark though a railway system to cover the 100-km distance between the two metropolises. Indeed, this is an area populated by nearly a third of all Filipinos, and a railway connection would therefore allow the airport at each metropolis to complement each other. Within the ecozones, we seek to create an environment characterised by more transparency and user-friendliness for foreign investors. This would help to mitigate bureaucracy and eliminate corruption.

Foreign investors want predictability in their processes, and we want to be honest about what can be offered so they can plan ahead. Additionally, the BCDA has financing capabilities, an experienced group of engineers and an asset base to finance large infrastructure developments that can create an environment conducive for corporations and people.

How can economic zones incentivise diverse high-priority industries while maintaining an environment fertile to business communities?

CASANOVA: We are targeting agro-industrial development and manufacturing as we want to regain our niche in those sectors. Due to the new Armed Forces Modernisation law, land inventory has increased by 100,000 ha. There are more idle military camps being transferred to the BCDA’s mandate, for instance in Mindanao, where we hope to focus on the modernisation of agriculture to create employment and enterprises. We are also exploring partnerships with agricultural companies to transform military camps into productive agricultural farms in order to add value to the economy and invite more foreign direct investment.

Our main thrust is to move beyond Overseas Filipino Workers and services and create value through modernising agriculture by providing sufficient irrigation, quality seeds and technology, not only to provide employment through an export market in traditionally poor rural areas, but also to markedly improve food security. In Clark, land areas are already becoming scarce as more land is being committed and existing locators expand operations. That is why a metropolitan district is being created there that will include a government centre, business districts, industrial parks and academic institutions, all to drive sustainable development.