GROWING U.S. BUSINESS ROLE IN NORTHERN MINDANAO

UNCLAS SECTION 01 OF 02 MANILA 003501 SIPDIS SIPDIS E.O. 12958: N/A TAGS: BEXP BTIO ECON EINV PREL RP SUBJECT: GROWING U.S. BUSINESS ROLE IN NORTHERN MINDANAO REFS: A) 06 Manila 2570 B) Manila 3307 ¶1. SUMMARY: The Deputy Chief of Mission's October 17 visit to Cagayan de Oro highlighted the increasing role that American business plays in the commercial life of Northern Mindanao. DCM participated in the ribbon cutting ceremony for the first Cagayan de Oro trade show and exposition, which featured an American Showcase Pavilion with exhibits by thirteen well-known U.S. firms. The theme of U.S. business engagement was reinforced by a visit to a U.S.-owned call center that is rapidly expanding its work force. Other highlights of the DCM's visit included a luncheon hosted by the Cagayan de Oro Mayor with local business leaders, a television interview, and an informal exchange of views with the leadership of the local Chamber of Commerce. The Ambassador's June 2006 visit to Cagayan de Oro, and the DCM's September 2007 visit to General Santos City (reftels) also highlighted the growing presence of American businesses in Mindanao. With business leaders and the media, the DCM encouraged progressive (and largely Christian) cities like Cagayan de Oro to lead and benefit from growing peace and development in poorer (and largely Muslim) parts of Central and Western Mindanao. End summary. A BOOMING REGION ¶2. Northern Mindanao (Region 10) grew 6.84 percent in 2006, tied with Metro Manila as the second fastest growing region. Besides having the highest GDP in Mindanao, its per capita GDP is the third highest in the country. Region 10 accounted for nearly 5 percent of 2006 Philippine GDP. There is a growing middle class and a general improvement in the standard of living region-wide. ¶3. Cagayan de Oro is the gateway and regional shopping center for the eight cities and five provinces of the region. The city's economy is largely based on trade, services and tourism. Its regional orientation is reflected in its large concentration of service industries, government offices, banks, and the facilities of some of the most successful local and multinational corporations, including Del Monte Philippines, Nestle, Coca-Cola and Pepsi-Cola. In 2005 Cagayan de Oro exported about $540 million, with products such as canned pineapple, fatty alcohol, sintered ore, crude coconut oil and desiccated coconut, and milk powder predominating. Investment opportunities in Cagayan de Oro are in food processing, infrastructure, industrial facilities, agriculture, and export trading. The city's competitiveness is enhanced by its strong economic ties with the nearby Visayan islands and the Philippines' second city of Cebu, as well as the Cagayan de Oro-Iligan Corridor, the Brunei Darussalam-Indonesia-Malaysia-Philippines East ASEAN Growth Area (BIMP-EAGA),the Mindanao Container Port, and the Iligan-Cagayan de Oro-Bukidnon Road, which links it to key regional satellite growth centers. SPOTLIGHT ON AMERICAN BUSINESS ¶4. The U.S. Pavilion at the first Cagayan de Oro Business Enterprises, Services and Trade Exposition (Oro BEST Expo) 2007 was an outstanding opportunity to showcase the prominent role of American firms in the economic development of the region. Represented at the three-day trade show were companies with a longtime presence in the region (Goodyear and Dole) as well as recent market entrants (Citibank and Cisco). Citibank reported that the bank is doing well in Cagayan de Oro after a one-year presence. Cargill is planning a major new investment, an animal feed production facility scheduled to open in the spring of 2008. Another American exhibitor, Amway, reported that 40 percent of its business in the Philippines originates in Cagayan de Oro. In addition to the on-site firms, U.S. Commercial Service staff manned an exhibition that featured catalogs and brochures of 58 new-to-market U.S. businesses that are seeking to explore market opportunities and develop meaningful trade contacts for export sales. EXPANDING CALL CENTER INDUSTRY ¶5. Deputy Chief of Mission toured a large call center facility, Link2Support (soon to be renamed Concentrix Philippines),acquired in February 2007 by SYNNEX of Fremont, California, an information technology supply chain services provider. One of three Link2Support sites in the Philippines, the Cagayan de Oro location has 516 seats, employing over 1,200, with a 350 seat expansion currently underway. Operating on a 24/7 basis, the firm provides voice, chat and email support. Its main client is Linksys, a division of Cisco. With a young work force (average age 22),the firm's main challenge is to find potential employees with sufficient technical knowledge and the required English language skills. In that regard, Link2Support is implementing several innovative human resource strategies. The company has adapted to the recruitment pool in the region by hiring promising candidates and imparting the technical knowledge with on-the-job training. Additionally, the firm partners with area universities, donating equipment and encouraging the establishment of new curricula, such as Call Center English 101. MANILA 00003501 002 OF 002 U.S. BUSINESS GROWING WITH MINDANAO ¶6. The Deputy Chief of Mission rounded out the day with a media interview and an informal conversation with the President of the local Chamber of Commerce and other Cagayan de Oro business leaders. The taped television interview reached across Christian and Muslim provinces of Northern Mindanao, airing on ABS-CBN's evening news program, and replayed on a Sunday features/talk show. In each venue the Deputy Chief of Mission stressed his admiration for the dynamism and pro-business climate of the region, and the desire of American firms to participate in Mindanao's growth. The Deputy Chief of Mission pointed to the positive role of American businesses as socially responsible employers that offer meaningful jobs. With the business leaders, Deputy Chief of Mission encouraged progressive cities such as Cagayan de Oro to serve as nodes of development that eventually could spread peace and prosperity to more of Mindanao, thereby making more effective use of the region's untapped potential. The mutual benefit of U.S./Philippine trade and investment was a point reiterated throughout the day. KENNEY