DAVAO CITY (MindaNews / 30 May) — The private sector in Mindanao needs to
establish itself as the main driver of cross-border trade, infrastructure investment,
and value-chain integration throughout the Brunei Darussalam-Indonesia-
Malaysia-Philippines East ASEAN Growth Area (BIMP-EAGA).
When businesses in Mindanao move away from a solely local perspective and
adopt a broader regional strategy, they can utilize BIMP-EAGA as an important
gateway to becoming part of the global marketplace. This happened in the 1990s
when deep sea fishing ventures between the Philippines and Indonesia benefited
the growth of General Santos City and Zamboanga City as regional fish trade grew.
Main Strategic Roles for the Private Sector
 Value-Chain Pioneer: Advancing from the export of raw agricultural
commodities to the processing of high-value products. It is essential for
Mindanao enterprises to collaborate with neighboring regions in the
development of halal goods, processed foods, and marine products that
adhere to rigorous international standards.
 Connectivity Investor: Engaging in public-private partnerships (PPPs) by
funding and running essential maritime routes, air connections, and digital
networks. Companies should help link Mindanao directly to key hubs such
as Manado, Kota Kinabalu, and Bandar Seri Begawan.
 Halal Hub Champion: Driving a unified BIMP-EAGA halal ecosystem by
standardizing certifications and establishing economic zones, so the private
sector can tap into the global halal market.
 Eco-Tourism Networker: Creating multi-country travel packages. Local
tour operators work with regional partners to promote joint itineraries, such
as dive tourism across Sulu, Celebes, and Raja Ampat seas, to international
visitors.
Strategic Process for Globalization

Key Enablers for Success

1. Leveraging the MinBC: Maximizing the influence of the Mindanao
   Development Authority (MinDA) and the Mindanao Business Chambers to
   align private interests with national policies.
2. Utilizing Free Trade Agreements: Capitalizing on reduced tariffs and
   streamlined customs under the ASEAN Trade in Goods Agreement (ATIGA)
   to lower cross-border transaction costs.
3. Digital Trade Adoption: Implementing blockchain-backed supply chain
   tracking and regional e-commerce platforms to bypass traditional geographic
   barriers.
   The private sector in Mindanao can utilize specific sub-regional funding
   mechanisms and leverage critical transport corridors under the newly adopted
   BIMP-EAGA Vision 2035 framework. This vision targets a $174.6 billion
   portfolio of 265 priority infrastructure projects designed to build high-impact
   international trade channels.
4. Cross-Border Funding Mechanisms
   Private firms can secure capital and reduce risk using several distinct cross-border
   funding models:
    Sub-Regional Public-Private Partnerships (PPPs): A joint initiative
   between the MinDA and the PPP Center serves as a blueprint for scaling
   private capital mobilization across the EAGA economic corridors. Mindanao
   firms can participate on high-priority infrastructure and energy projects,
   such as the airport and seaport development as well as regional power grid
   upgrades.
    BIMP-EAGA Republic of Korea Cooperation Fund (BKCF): This fund
   directly finances community-based private and public initiatives. It offers
   critical grant resources for enterprises engaged in sustainable agriculture,

renewable energy, and agro-enterprise development in Mindanao and
Palawan.
 Asian Development Bank (ADB) Regional Portfolio: The ADB provides
dedicated financial facilities and technical assistance to expand economic
corridors. This mechanism helps private firms link production centers to
regional supply chains and construct Special Economic Zones.
 Foreign Direct Investment (FDI) Linkages: Mindanao has a strong
international presence of business chambers and an active diplomatic
community (comprising four Consulate General offices and 22 Honorary
Consulates) based in Davao City. The presence of these offices can be a
good portal for foreign direct investments to locate in various areas of
Mindanao.

2. Active & Emerging Maritime Shipping Routes
   Mindanao’s private logistics sector relies on strategic gateways to connect local
   goods directly to nearby international consumer bases:
    Davao–General Santos–Bitung (DGB) Route: This route bypasses Manila
   to offer a highly cost-effective trade corridor linking Mindanao directly to
   North Sulawesi, Indonesia. Stakeholders are actively working to optimize
   vessel operations and boost cargo volume for agricultural goods.
    Davao–Manado Sea Link: Reopened as part of a post-pandemic
   connectivity push, this link is heavily utilized by Mindanao’s agribusinesses
   to export consolidated halal products and marine commodities.
    Davao Oriental Integrated Corridors: A localized network that links the
   ports of Mati, Cateel, and Boston directly into priority BIMP-EAGA
   maritime channels. It provides coastal agricultural hubs with immediate
   access to sub-regional shipping lanes.
   Missed Opportunities
   How much has the private sector in Mindanao lost in business and trade
   opportunities in the BIMP-EAGA? The private sector in Mindanao loses an
   estimated $3 billion to $5 billion annually in unrealized trade and business
   opportunities within the BIMP-EAGA sub-region.
   While neighbors like Sabah and Sarawak generate $29.4 billion and $39.7 billion
   in annual trade respectively, Mindanao’s direct exchange with these next-door
   markets sits below $500 million—representing a massive trade deficit against its
   true economic potential.

The primary structural barriers causing these steep losses include infrastructure
limits, regulatory friction, and investment shifts.
Key Areas of Financial and Opportunity Losses

1. Supply Chain Rerouting and Logistics Deadweight
    Manila-Centric Bottlenecks: Due to inconsistent or missing direct
   maritime links, a significant portion of Mindanao’s $6.2 billion in global
   exports is shipped north to Manila before heading to final destinations.
   Rerouting cargo adds an estimated 20% to 30% in unnecessary logistics
   costs.
    Bypassing Nearby Hubs: Products intended for regional markets bypass
   immediate neighbors like North Sulawesi or Sabah, sacrificing the
   competitive advantage of geographic proximity.
2. The Multi-Billion Halal Trade Deficit
    Promotional Gaps over Production: Mindanao loses out on a massive slice
   of the global trillion-dollar halal market due to lagging local production
   capabilities.
    Foregone Corporate Ties: Instead of directly supplying affluent consumer
   bases in Brunei or mainland Malaysia, local agri-business remains mostly
   localized, ceding market dominance to well-capitalized multinational firms.
   
3. Depressed Foreign Direct Investment (FDI)
    Funding Imbalances: While the broader BIMP-EAGA sub-region draws
   $20.73 billion in FDI, Mindanao has historically struggled to capture its
   proportional share. Yet the strong presence of diplomatic and international
   business chambers in Mindanao remain untapped. Bringing them to the mix
   may make a substantial difference.
    National Budget Disparities: Institutional bottlenecks and a historical
   allocation pattern where 90% of national transportation budgets favored
   Luzon left Mindanao with minimal infrastructure backing to capture early
   sub-regional investment flows.
4. Post-Pandemic Maritime and Air Connectivity Halts
    Canceled Routes: Past disruptions, suspension of direct flights (e.g.,
   Davao–Manado, Davao -Kuala Lumpur), and paused sea links cost local
   tour operators and logistics firms millions in active trade.

 The Tourism Deficit: While BIMP-EAGA tourism has bounced back to
6.01 million arrivals, a lack of regular commercial flights to Mindanao
routes international travelers to alternative ASEAN destinations instead.
Trade Performance Breakdown
Mindanao’s Global Export Footprint: Mindanao exports $6.2 billion annually,
mainly in agriculture and processed foods like bananas, coconut products, and
marine goods.
 The Sub-Regional Trade Gap: Even though Mindanao is geographically
close to East Malaysia (Sabah and Sarawak), trade between them remains
under $500 million. Rather than trading primarily with their EAGA
neighbors, most of Mindanao’s goods are sent to larger non-EAGA markets
such as China, Singapore, and Japan.
 Broader Sub-Regional Comparison: Mindanao’s $6.2 billion in exports
stands alongside Sabah’s $29.4 billion and Sarawak’s $39.7 billion, both
driven by energy, timber, and advanced agriculture.
Investment Landscape & Infrastructure Portfolio
Investment in the subregion is shifting from localized projects toward cross-border
digital and physical connectivity.

Indicator

Sub-Regional
Value (BIMP-
EAGA)

Mindanao & Palawan Share / Role

Priority
Infrastructure
Pipeline

$174.6 Billion
(265 projects)

Over $10.5 Billion historically allocated
to Mindanao infrastructure and logistics
expansion.

Foreign Direct
Investment (FDI)

$20.73 Billion
(6.05% YoY
growth)

Serving as an emerging ASEAN hub for
cross-border digital transformation,
agrotech, and green investments.

Tourism Sector
Recovery

6.01 Million
Arrivals (51%
annual jump)

Bolstered by exclusive travel tax
exemptions for departures from
Mindanao to EAGA destinations.

Turning Losses Into Gains: Vision 2035

To recapture these billions in lost opportunities, MinDA and private stakeholders
are shifting strategies under the newly launched BIMP-EAGA Vision 2035
framework:
 Securing Private Capital: Shifting focus toward active Public-Private
Partnerships (PPPs) to fund the $174.6 billion sub-regional infrastructure
pipeline.
 Building Regional Corridors: Launching integrated trade networks like the
Tri-Province Davao Gateway Corridor to connect local production centers
straight to regional sea lanes.
While the broader BIMP-EAGA subregion has grown into a $411.32 billion
economy with $165.96 billion in total merchandise trade, trade between
Mindanao and nearby regions presents a massive, underutilized growth frontier.
Structural Targets for the Next Phase
As the subregion transitions past its Vision 2025 targets, MinDA and its regional
partners are coordinating to hit expanded benchmarks:
 Trade Expansion: Pushing to expand total trade in goods beyond $1.1
trillion across the broader sub-regional area.
 Investment Targets: Attracting a cumulative $300 billion in combined
foreign and domestic investment inflows.
 BARMM Integration: Placing the Bangsamoro Autonomous Region in
Muslim Mindanao (BARMM) at the direct forefront of halal trade
consolidation with Brunei and Malaysia.

(MindaViews is the opinion section of MindaNews). Antonio “Tony” S. Peralta is a
business and civic leader who serves as the Honorary Consul of Finland in
Mindanao and Chairman of the European Chamber of Commerce of the
Philippines–Southern Mindanao Business Council, as well as Corporate Secretary
of the Japanese Chamber of Commerce of Mindanao. His background is in
banking, finance, and regional development, and he is involved in promoting
foreign investment, sustainable growth, and educational links between Europe and
Mindanao. He also serves as Vice Chairman of the Davao City Media Citizens
Council, participates in development initiatives through ECCP SMBC, and
supports projects related to rural development, media engagement, business
cooperation, and international partnerships in the region.)