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Andap Valley Site Integrated Area Development (AVSIAD):

A Macasaltabayami Alliance Proposal for the Plan Development

Compiled/Revised: Noe S. Elizaga, Jr., AB Econ.

Prepared by: Prudenciano Gordoncillo PhD, UP Los Banos

Aniceto Orbeta PhD, Philippine Institute of Development Studies

1. Introduction

Surigao del Sur is one of the provinces along the pacific corridor of the Philippines which has
been characterized by relative under development owing to poor infrastructure, low
agricultural productivity and mostly extractive exploitation of its natural resources. The
development of the province has also been constrained by socio-political instability. The
province is stretched across an estimated land area of about 493,270 hectares, occupied by
about 561,219 people who are distributed in 19 municipalities.

In middle of the province are seven municipalities that comprise the Central Surigao del Sur
area; namely, Marihatag, Cagwait, San Agustin, Lianga, Tago, Bayabas, and San Miguel.

Based on the Community-Based Monitoring System (CBMS) Core Indicators (2008-2011),

Figure 1. Map of MACASALTABAYAMI Alliance, Surigao del Sur

Source: Conference Proceedings: MaCaSaLTaBayaMi Alliance Learning from Others and
Needs Assessment
Hotel Conchita, Cagayan de Oro City, 5-6 April 2010.
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the 7 municipalities of Central Surigao del Sur are among the areas where interventions for development are very critical. Shown in table 1 are
the health and nutrition indicators of the selected 7 municipalities in the province. Among the 7 municipalities, Tago has the largest proportion
of the occurrence of child deaths and women deaths due to pregnancy related causes at a rate of 1.7% and 0.9% respectively which highlights
the health indicator. On the other hand, the nutrition indicator measured by the incidence of malnourished children is most evident in the
municipality of San Miguel at a rate of 9.7%.

Table 1. Health and Nutrition Indicators of the Selected Municipalities of Surigao del Sur, 2008-2011.
Number Number Women deaths due to Number
of Child deaths (0-4 years of of Malnourished children
pregnancy related
Total Total children old) children children (0-5 years old)
Municipality causes
HH Population (0-4 (0-1 (0-5
years years years
old) Magnitude Proportion old) Magnitude Proportion old) Magnitude Proportion

Bayabas 1,604 7,340 822 11 1.3 186 0 0 977 98 10

Cagwait 3,927 18,444 1,975 8 0.4 365 1 0.3 2,420 113 4.7
Lianga 5,823 27,416 3,247 16 0.5 564 3 0.5 3,904 77 2.0
Marihatag 3,380 17,099 2,194 17 0.8 397 2 0.5 2,658 104 3.9
San
3,350 16,421 1,783 4 0.2 263 1 0.4 2,245 41 1.8
Agustin
San Miguel 6,839 33,761 4,685 40 0.8 806 4 0.5 5,561 537 9.7
Tago 6,333 30,125 3,427 60 1.7 313 3 0.9 4,230 20 0.5

San Miguel municipality also has the most number of informal settlers and households living in improvised and temporary houses constructed
of likely scrap materials at a rate of 7.4% and 10.2%, respectively as shown in Table 2. However, Marihatag is the municipality where most of
its households are well-off in terms of housing. Compared to San Miguel, only 0.3% of its households are living in makeshift housing and 1.7%
are informal settlers. In terms of the least proportion of housing problems, Lianga has the highest proportion of households (26.2%) with no
access to sanitary toilet facilities followed by San Agustin (26.1%) which happens to be the municipality with most number of households with
no access to safe water supply.
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Table 2. Housing, Water and Sanitation Indicators of the Selected Municipalities of Surigao del Sur, 2008-2011.
Households without Households without
Households living in Households who are
access to safe water access to sanitary
Municipality makeshift housing informal settlers
supply toilet facilities
Magnitude Proportion Magnitude Proportion Magnitude Proportion Magnitude Proportion
Bayabas 58 3.6 71 4.5 148 9.3 366 22.9
Cagwait 304 7.8 112 2.9 473 12.1 799 20.4
Lianga 481 8.3 193 3.3 794 14.2 1,523 26.2
Marihatag 9 0.3 57 1.7 301 8.9 454 13.5
San Agustin 83 2.5 162 4.9 943 28.2 870 26.1
San Miguel 695 10.2 502 7.4 1,218 17.8 1,110 16.3
Tago 92 1.5 284 4.5 461 7.3 579 9.2

Table 3 shows that the municipalities have quite a significant proportion of children who are not attending school knowing that education is
fundamental and is among the priorities of the country. The proportion of children who are not attending elementary school are high in San
Miguel (28.6%) and at least in Marihatag (15.6%) and Tago (15.6%). It seems that some children finish schooling until elementary only since
there are higher rates of children who are not attending high school than that of who are not attending elementary school and is most evident
also in San Miguel (54%).

Table 3. Education Indicators of the Selected Municipalities of Surigao del Sur, 2008-2011.
Number Number Number
Children not attending Children not attending
of of of Children not attending
elementary school (6- high school (13-16
children children children school (6-16 years old)
Municipality 12 years old) years old)
(6-12 (13-16 (6-16
years years years
Magnitude Proportion Magnitude Proportion Magnitude Proportion
old) old) old)
Bayabas 1,438 243 16.9 725 280 38.6 2,163 227 10.5
Cagwait 3,146 708 22.5 1,781 775 43.5 4,927 587 11.9
Lianga 4,963 1,133 22.8 2,738 1,297 47.4 7,701 1,239 16.1
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Marihatag 3,447 537 15.6 1,841 787 42.7 5,288 383 7.2
San Agustin 3,079 679 22.1 1,799 691 38.4 4,878 563 11.5
San Miguel 6,548 1,869 28.6 3,528 1,906 54 10,076 1,558 15.5
Tago 5,625 879 15.6 3,031 1,193 39.4 8,656 742 8.6
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Being the most common factor in identifying poverty, income indicators are shown in table 4.
The highest proportion of households living below the poverty threshold and not meeting the
basic food needs to satisfy their nutritional requirements are alarming in San Miguel at
86.5% and 79.7%, respectively. It is also in the same municipality where the most number of
households are lacking in the availability of food (47.3%).

Table 4. Income Indicators of the Selected Municipalities of Surigao del Sur, 2008-2011.
Households with Households with Households who
income below the income below the food experienced food
Municipality poverty threshold threshold shortage

Magnitude Proportion Magnitude Proportion Magnitude Proportion

Bayabas 716 44.6 526 32.8 78 4.9

Cagwait 2,230 56.8 1,671 42.6 162 4.1
Lianga 3,928 67.5 3,218 55.3 739 12.7
Marihatag 2,504 74.1 2,181 64.5 220 6.5
San Agustin 1,851 55.3 1,351 40.3 2 0.1
San Miguel 5,917 86.5 5,447 79.7 3,231 47.3
Tago 4,619 72.9 4,005 63.2 1,185 18.7

Among all the provinces in the Philippines, Surigao del Sur ranks 48th in the 2015 Cities and
Municipalities Competitiveness Index (CMCI) which is composed of three components:
economic dynamism, government efficiency and infrastructure. Economic dynamism is
associated with business expansion capacities and employment generation in the area
which represents the productivity of the economy from its resources. Government efficiency
refers to the government support and services available in the area. These support and
services are accounted to be in quality and reliability for an effective economic productivity
expansion. Lastly, infrastructure deals with the physical means to be able for the locality and
its surrounding to connect, expand and sustain the flow of goods and services in the area.
Overall, Surigao del Sur scores 26.69348063 against Davao del Sur which ranked 1st with a
score of 41.69043955 indicating that the higher the index, the more competitive an area is.
Table 5 shows the scores for the selected 7 municipalities in the province and among these,
San Agustin ranks 1st with a score of 29.17 followed by Cagwait and San Miguel. The top
three competitive municipalities appear to score higher than the provincial score of Surigao
del Sur.

Table 5. Competitiveness Index among the 7 Municipalities of Surigao del Sur, 2015.
Population
Weight (%
Overall Revenue
Rank Municipality Classification Population to Total
Score (Php)
Population
*50%)
4 Bayabas Third Class 24.3450 7,799 0.0069 2,144,391.59
2 Cagwait Fourth Class 29.0829 18,899 0.0168 8,510,065.23
5 Lianga Fourth Class 21.0762 28,905 0.0258 5,910,452.44
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7 Marihatag Third Class 19.9803 17,926 0.0160 10,678,477.17

1 San Agustin Fourth Class 29.1684 20,655 0.0184 4,480,891.73
3 San Miguel First Class 28.0684 36,287 0.0323 7,359,188.85
6 Tago Second Class 20.8290 33,993 0.0303 8,227,816.74
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To address the problems associated with the issues of poverty and economic
underdevelopment, the seven municipalities in Central Surigao del Sur have embraced the
idea of forming into an alliance even before the concept was codified both in the constitution
and the local government code.

In 1960, the municipalities of Cagwait, Marihatag and Oteiza formed the “CAGMAOT”
Alliance with primary purpose of providing the avenue for collaborative efforts in mobilizing
resources for development. Later in 1993, when Oteiza was renamed the Alliance was also
renamed as “CASAMA” and it was during this time when the Alliance considered the
establishment of Provincial Agro-Industrial Center. In the same year, Bayabas decided to
join the Alliance and the name became “CASAMABA”.

In 1994, the municipalities of Lianga and San Miguel joined the Alliance and the organization
was again renamed as “MACASALBAMI”. This time the Alliance was perceived to be serious
in its efforts for collaboration because the leaders went into the exercise of setting the vision,
missions and goals through a 3-day in-house workshop. Further, the Alliance sought the
assistance of the Development Academy of the Philippines (DAP) in the formulation of the
Area Industry Plan. Furthermore, the members of the Alliance created a revolving fund with
a contribution of about Php 30,000.00 per municipality. In 1995, the municipality of Tago
decided to join the Alliance and the organization was again renamed to date as
“MACASALTABAYAMI” representing the municipalities of Marihatag, Cagwait, San Agustin,
Lianga, Tago, Bayabas and San Miguel.

In its early years of existence, while the goals were for collaborative developmental efforts,
the main focus of the Alliance was on sports and cultural activities. In the mid-2000s, the
Alliance was perceived to have failed to sustain the activities of the organization. While the
Alliance committed to the establishment of a Program Management Office and providing for
the complementary staffing, these were never materialized. In its effort to solicit support
from donors and development agencies of the government, the Alliance held a
reorganizational meeting with the Local Governance and Development Foundation, German
Technology and Development Cooperation, Mindanao Development Authority, Department
of Interior and Local Government and the Haribon Foundation. Finally, in 2012, the
Memorandum of Agreement was notarized, the Alliance Manual of Operations was crafted
and a three-year (2013-2015) Operational Plan was formulated.

While there had been efforts for collaborative development among the 7-member
municipalities of the alliance, most of the efforts were driven by the developmental
framework drawn at the municipal level. In most cases, the initiatives are driven by sectoral
goals like sports or education and also by the interest defined by the donor community.

In the last couple of years, MACASALBAYAMI has been initiating efforts to revitalize the
Alliance not only for collaborative development initiatives but also to access the massive
funds available from both the donor community and the general coffers of the government
drawn from the Local Development Funds diverted from the “Pork Barrel” of the Philippine
Congress. However, the Alliance access to these funds has been hampered by the lack of
readily available program/project proposals developed from a broader developmental
framework considering the endowed resources and broader development goals of the
Alliance. MACASALTABAYAMI shares the rich natural resources along the pacific coastline
and the bounties of the ANDAP valley. However, exploiting these resources for sustainable
development, would require a more comprehensive and integrated plan that will not only
address the critical economic developmental issues like poverty and in-equality but also in
terms of environmental conservations and social instability. Further, developmental issues
like economic progress, environmental sustainability, and social stability are not confined to
the boundaries of the political delineations in a local government unit. Hence, this proposal is
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for the preparation of an Integrated Area Development Plan for MACASALTABAYAMI

Alliance.

2. Andap Valley

The Andap Valley site has no commonly accepted name, and it is known only as
such by lumads living in the area until the name became popular among nearby areas. The
valley encompasses the municipalities of Lianga, San Agustin, Marihatag, Cagwait, San
Miguel, all of Surigao del Sur and the municipality of Prosperidad, Agusan del Sur. It lies at
the higher terrains of the Andap mountain ranges popularly known as the Andap Valley
Complex. Figure 2 shows the map of the Andap Valley with the identified entry points
indicated by arrows.

Province Macasaltabayami Entry Point

Lianga Surigao del Sur Yes
San Agustin Surigao del Sur Yes
Marihatag Surigao del Sur Yes
Cagwait Surigao del Sur Yes
Tago Surigao del Sur Yes
San Miguel Surigao del Sur Yes
Prosperidad Agusan del Sur No
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3. Provincial Background

i. Location and Demographics

Surigao del Sur was originally inhabited by Mamanuas and

Manobos, which was officially declared as a province by
virtue of R.A 2786 enacted in June 19, 1960. The
province was formerly part of Region XI but was declared
part of the recently created Region 13 or the CARAGA
Region. The province is bounded by Surigao del Norte to
the North, Agusan del Sur and Agusal Del Norte to the
West, Davao Oriental to the South and to the east, the
Pacific Ocean. The estimated annual income of the
province at the time of its creation was about PhP300,000;
however by the 1980s, the province was reclassified as a
first class province owing to its annual income which
reached to about PhP727,817,648.

Figure A1. Map of Surigao del Sur

The province was originally composed of 13 municipalities.
As of 2010, the province is now composed of 19 municipalities.
Table A1. Population, Area, and Density by municipalities in Surigao del Sur, 2010
Density
City/Municipality Population (2010) Area (ha.) (/Sq.km.)
(2010)
Bayabas 7,779 3,366 231
Cagwait 18,899 16,518 114
Cantilan 30,231 16,851 179
Carmen 10,287 15,919 65
Carrascal 16,529 28,592 58
Cortes 15,541 12,963 120
Lanuza 11,857 24,209 49
Lianga 28,905 24,027 120
Madrid 14,888 18,990 78
Marihatag 17,925 32,689 55
San Agustin 20,655 24,385 85
San Miguel 36,287 57,938 63
Tago 33,993 28,435 120
Tandag City (capital) 52,114 23,593 221
District I 315,890 328,475 96
Barobo 43, 663 22,576 193
Bislig 96, 578 42,264 229
Hinatuan 38, 731 31,523 123
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Among the two (2) districts of Surigao del Sur, District 1 which comprises 13 municipalities
and 1 city has slightly higher population (315, 890) than District 2 (245, 328) which consists
of 4 municipalities and 1 city. Bislig City of District 2 has the highest population which
accounts for 96, 578 followed by Tandag City (District 1) with a population of 52, 114.
Meanwhile, the municipalities of Carmen and Bayabas are ranked as the least populous
place in the province with population of 15, 541 and 7, 779, respectively.

The largest municipalities/cities in the province in terms of land area are the following: San
Miguel which occupies 57, 938 ha, Carrascal with 28, 592 ha and Tago with 28, 435 ha for
District 1 and the municipalities of Lingig with 47, 934 ha, city of Bislig with 42, 264 ha, and
Tagbina with 40, 998 ha for District 2.

The provincial average for the population density is at 109. The municipality of Bayabas
which is the smallest in terms of area and population has the highest density of 231 followed
by the two cities, Tandag with density of 221 and Bislig at 229. More than half of the
municipalities/cities significantly exceeded the provincial average. The municipalities with
lowest densities are Lanuza, Marihatag, and Carrascal.
ii. Economy

Table A2. Land Classification by Municipality in Surigao del Sur

Area (has.)
City/Municipality
A&D Forestland Total
Barobo 11,280 4 22,576
Bayabas 1,872 1,494 3,366
Bislig City 18,985 23,279 42,264
Cagwait 4,037 12,481 16,518
Cantilan 7,014 9,837 16,851
Carmen 2,909 13,010 15,919
Carrascal 4,495 24,097 28,592
Cortes 4,663 8,300 12,963
Hinatuan 20,035 11,488 31,523
Lanuza 3,271 20,938 24,209
Lianga 3,357 20,670 24,027
Lingig 12,567 35,367 47,934
Madrid 6,575 12,415 18,990
Marihatag 6,373 26,316 32,689
San Agustin 4,191 20,194 24,385
San Miguel 16,767 41,171 57,938
Tagbina 23,170 17,828 40,998
Tago 11,081 17,354 28,435
Tandag 5,902 17,691 23,593
Surigao del Sur 168,544 333,934 513,770
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The total area covered by the province of Surigao del Sur is 513, 770 hectares in which 168,
544 ha is classified as Alienable and Disposable (A&D) while the remaining 333, 934 as
Forestland. More than half of the total area of the province is classified as Forestland. The
largest municipality, San Miguel, occupies 57, 938 ha followed by municipality of Lingig with
47, 934 ha. Majority of which is identified as forestland. The same is the case with the two
(2) cities, Bislig and Tandag. The municipality with the smallest area is Bayabas with 3, 366
hectares wherein its A&D land is slightly larger than the identified forestlands.

The municipality of Tagbina ranks 3rd in the largest area next to San Miguel and Lingig and
also ranks the highest in terms of A&D land with 23, 170 hectares. Next is Hinatuan with
identified A&D land of 20, 035 ha followed by Bislig City with 18, 895 A&D land. The
municipality of Barobo which ranks next has relatively larger area for A&D (11, 280 ha)
compared to its forestland (4 ha).

iii. Agriculture and Rural Development Sectors

Table A3. Land Use, Surigao del Sur

Land Use Area (has.)
Agricultural Lands
Palay 20,645
Corn 3,214
Fruits 2,551
Non-food industrial crops 105,715
Vegetables
Production Forest
With tenurial instrument (TLA, IFMA, CBFM, ISF etc.) 246,990
Open access untenured 81,398
CADT
Protection Forest
Watershed Areas
Proclaimed Watershed (6) 43,628
Critical watershed 234,003
Key Biodiversity areas
Proposed landscape and seascape 102,458
Proposed critical habitat 3,911
Marine Protected Areas 3,061
Mining Areas (as of June 2009)
Approved MPSA)
Approved exploration permit
Approved operating contract
Approved special mines permit

Approved sand and gravel

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Non-food industrial crops constitute majority of the agricultural land use in the province at
105, 715 hectares. For palay production, 20, 645 hectares is being utilized. Other crops
produced are corn and fruits. The largest area in the province is devoted to production forest
with tenurial instrument recorded at 246, 990 hectares followed by critical watershed areas
with 234, 003 hectares. For the key biodiversity areas, 102, 458 hectares is designated for
proposed landscape and seascape while 3, 911 hectares for proposed critical habitat.
Marine protected area has the smallest area noted among the different land uses.

4. Project Identification and Prioritization Profile (infrastructure Component)

i. E-VSA Maps and Statistics

One of the guidelines set forth under PRDP in formulating the competitiveness strategy for
certain commodity involves developing the commodity’s value chain upgrading strategy.
Should an intervention be indicated like enterprise development or farm-to-market road, in
any segment of the VCA, the location best suited for the intervention shall be determined
through the expanded vulnerability and suitability Analysis or E-VSA tool (Source: PRDP I-
PLAN OM). E-VSA is a science-based tool used by
PRDP in prioritizing areas of investment in any given
province or municipality for certain commodity(ies)
with competitive advantage. By competitive
advantage means that the prioritized commodity,
e.g. abaca has considerable volume of production
and large extent of hectarage that can generate a
commodity-based enterprise that has significance in
local or global market. E-VSA plays a significant role
in identifying which areas to invest and what
commodity will be supported by PRDP funds under
I-REAP or I-BUILD subprojects.

As per E-VSA result, amongst the 19 municipalities inFigure B1. E-VSA

Surigao map of
del Sur, theabaca commodity, Surigao
municipality of del Sur
th
Marihatag is 4 in the ranking. This means that Marihatag is eligible for PRDP intervention
in support to abaca (see Table B1, Figure B1).

Table B1. E-VSA result for abaca, Province of Surigao del Sur
Number Volume of Area
Poverty VSA
of Production Planted Composite E-Vsa
Municipality Incidence Rank
Farmers (Mt) (Ha) Index Rank
(10%) (50%)
(15%) (15%) (10%)

Tago 1876 20 2858 38 8 0.57537 1

San Miguel 1514 60 2591 51 7 0.56872 2

Bislig city 1339 0 2924 34 3 0.55108 3

Marihatag 1568 0 2407 50 12 0.54828 4

San agustin 964 350 1396 50 10 0.47931 5

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Number Volume of Area

Poverty VSA
of Production Planted Composite E-Vsa
Municipality Incidence Rank
Farmers (Mt) (Ha) Index Rank
(10%) (50%)
(15%) (15%) (10%)

Lingig 759 0 1505 49 9 0.45744 6

Tagbina 456 0 454 48 1 0.45536 7

Lanuza 97 4859 50 35 17 0.4509 8

Cagwait 889 12 1625 39 16 0.42805 9

Lianga 543 0 1053 37 6 0.41098 10

Barobo 59 0 134 46 2 0.3785 11

Hinatuan 35 0 63 44 4 0.36794 12

Tandag 743 0 470 26 15 0.35846 13

Bayabas 10 0 20 39 5 0.3398 14

Madrid 0 0 0 33 11 0.30951 15

Carmen 4 0 4 35 13 0.30889 16

Cortes 50 0 68 36 18 0.29892 17

Carrascal 59 0 22 33 19 0.28933 18

Cantilan 0 0 0 26 14 0.28793 19

Surigao del Sur is the largest abaca producing province in the region and in Mindanao. In
2013, the province accounted for 65% of the region’s abaca output (Abaca VCA, 2014). The
province has been supplying abaca as raw material for pulp production, specialty
papermaking, cordage production, and handicrafts to Cagayan de Oro City, Davao, and the
Bicol region (Phil FIDA, 2005). The top 5 leading producers of abaca in the province are
Tago, San Miguel, Bislig, Marihatag, and San Agustin. Table 2 shows the production of
abaca in Caraga region.
Table B2. Area, volume of production, and yield of abaca, Caraga, 2009- 2013
ANNUAL %
INDICATORS 2009 2010 2011 2012 2013
GROWTH RATE

CARAGA

Volume 5,861.19 6,058.64 6,030.78 5,965.03 5,827.89 -0.11%

Area Planted 9,920.00 11,780.00 10,949.00 9,911.00 10,437.00 1.04%

Average Yield 0.59 0.51 0.55 0.60 0.56 -1.10%

Agusan del Norte

Volume 542.56 548.08 508.36 529.17 521.24 -0.79%

Area Planted 3,250.00 3,250.00 2,500.00 1,625.00 1,620.00 -10.03%

Average Yield 0.17 0.17 0.20 0.33 0.32 18.55%

Agusan del Sur

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ANNUAL %
INDICATORS 2009 2010 2011 2012 2013
GROWTH RATE

Volume 1,369.53 1,392.86 1,509.56 1,505.16 1,674.05 4.45%

Area Planted 3,190.00 3,230.00 3,229.00 3,186.00 3,236.00 0.29%

Average Yield 0.43 0.43 0.47 0.47 0.52 4.10%

Surigao del Norte

Volume 25.42 22.60 17.61 10.70 8.10 -13.63%

Area Planted 360.00 300.00 220.00 100.00 81.00 -15.50%

Average Yield 0.07 0.08 0.08 0.11 0.10 8.32%

Surigao del Sur

Volume 3,923.68 4,095.10 3,995.25 3,920.00 3,624.50 -1.52%

Area Planted 3,120.00 5,000.00 5,000.00 5,000.00 5,500.00 15.26%

Average Yield 1.26 0.82 0.80 0.78 0.66 -9.52%

Source: BAS/PSA, Abaca VCA, 2014

Caraga region (where Surigao del Sur is one of the significant sources of raw material) is
one of the regions in the country with a robust abaca industry. As of 2014 the region posted
an average production volume of 5,828 MT and has a total production area of 10,437
hectares (Abaca VCA, 2014). It is home of 3,439 abaca producers whose farm holdings
average from 1.0 to 3.5 hectares. The region has 44 licensed abaca traders and 4 fibercraft
makers. The industry generates a total of 27,448 jobs. Direct dependents include abaca
farmers, classifiers/sorters, manufacturers, traders, exporters and hundreds of fiber craft
processors (PhilFIDA data, 2005). This suggests the importance of abaca to the farmers in
Surigao del Sur in general and Marihatag in particular. This also indicates how important the
commodity is in terms of its contribution to the economy of the province/municipality.

The commodity has essentially provided steady income to farmers, which redound to
substantial revenue to the province. It is to be noted that abaca together with coconut and
rice is among the top 3 leading crops in Surigao del Sur (LGU Marihatag 2011).

One of the development agenda of the regional industry cluster is to make Caraga as the
production and processing hub in the country. With this goal, the industry cluster will
capitalize on its strategic location, as it is adjacent to Region 10, home to the world’s biggest
abaca pulping plant.

To realize this goal, the cluster will work on the expansion of production areas from 10,437
hectares at present, to 25,000 by 2020 and increase yield from 0.56 MT/hectare at present
to 2.0 MT/hectare in the near future (PhilFIDA no date). This is where Surigao del Sur,
particularly Marihatag plays a significant role in the abaca industry. A key ingredient to boost
the abaca production in the province is to improve farm to market roads.
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ii. Value Chain Summary

In 2012, the world production of abaca reached up to 77.9 thousand metric tons (MT) and
the Philippines accounted for 83% of the world production. The second largest abaca
producing country is Ecuador, where abaca is grown on large estates and production is
increasingly mechanized. In the Philippines, the abaca sector consists mainly of
smallholders. Philippine abaca has nine grades for each type of cleaning compared to the
five grades of Ecuador. As such, Philippine abaca presents a wider spectrum of quality
choices and answers the various needs of different manufacturers like the handicraft, cord
and papermaking industries (Source: VCA 201).

The Philippines during the pre-war era ranked first in world’s abaca fiber production, in fact
we are the only abaca producing nation in the world until the 1920s (Baroña and Severa
year ). In the Philippines, This commodity has a strong economic relationship with resource-
constrained farmers situated in the forestlands and in marginal uplands. In fact, abaca is
the source of income of most of the marginal farmers in the uplands ever since. Abaca or
the “Manila Hemp” is considered as the champion of the fiber industry in the international
community. This is endemic and indigenous to the country’s warm, wet climate and it has
been flourishing on Philippine soil for centuries, long before the Spaniards came to the
Philippines. Caraga and Davao are among the leading abaca producing regions in the
country.

Source: Abaca VCA, 2014

Abaca is
cultivated in
138,369 hectares inFigure
2013. Collectively, Mindanao accounted for 34% of the area planted to
B2. Breakdown of abaca production in the Philippines by island group, 2013
abaca (Figure B2). Total national production was reported at 64,952 MT with the highest
production in Bicol Region at 24,078 MT followed by Eastern Visayas with 16,597 MT.
Three of the six regions in Mindanao namely: Davao Region, Caraga, and ARMM are
among the top 5 abaca producing regions in the Philippines. Mindanao regions accounted
for 34% of the total production (Source: VCA, 2014).
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The national average yield in 2013 was 470 kilograms per hectare. The top 3 high yielding
regions are ARMM (620 kg/ha), Caraga (560 kg/ha), and Davao Region (550 kg/ha). Bicol
Region ranks 4th in terms of average yield. The average yield for the whole Mindanao is
higher by 4% than the national average at 490 kilograms per hectare (Source: VCA, 2014).
Table 3 presents the abaca production in the Philippines whereby Caraga ranks 4th overall
in terms of volume of production and area planted.

REGION VOLUME (MT) AREA (Ha) YIELD (MT/ha) % to RP VOL

PHILIPPINES 64,952 138,369 0.47 100%

Bicol Region 24,078 44,509 0.54 37.07%
Eastern Visayas 16,597 36,237 0.46 25.55%
Davao Region 7,269 13,187 0.55 11.19%
Caraga 5,828 10,437 0.56 8.97%
ARMM 4,974 8,067 0.62 7.66%

Northern Mindanao 2,244 5,381 0.42 3.45%

Western Visayas 1,741 6,530 0.27 2.68%
Soccsksargen 954 5,924 0.16 1.47%
Zamboanga Peninsula 590 1,965 0.30 0.91%
Central Visayas 415 3,325 0.12 0.64%
Mimaropa 121 1,434 0.08 0.19%

Central Luzon 113 543 0.21 0.17%

Calabarzon 15 331 0.05 0.02%
CAR 13 499 0.03 0.02%

Source: Abaca VCA, 2014

The number one abaca producing province in the Philippines is Catanduanes with the
highest yield at 820 kilograms per hectare. Abaca farms in Catanduanes are among the first
who have achieved a Rainforest Alliance Certification on Sustainable Farming. With its high
volume, lead firms tend to focus more on Catanduanes especially in connection with the
achievement of the Rainforest Alliance certification. Northern Samar and Leyte ranked
second and third, respectively. Six (6) provinces from Mindanao comprised the rest of the
top 10 abaca producing provinces in the country (see Table B4).

The Value Chain Analysis (VCA) for abaca conducted by PRDP in 2014 revealed that in
Caraga region, Surigao del Sur ranked 4th among the top producing provinces in the
country, only next to Leyte. Table B3 shows the area and volume of abaca production in
Surigao del Sur.
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The value chain analysis (VCA) conducted by PRDP also revealed that the province of
Surigao del Sur plays an important role in boosting the abaca industry because it is one of
the top producing abaca provinces in the country. Also, abaca has a niche in the overall
agricultural development in the province.

Table B4. Top 10 abaca producing provinces in the Philippines, 2013

1
AVERAGE
PROVINCE VOLUME (MT) AREA (ha)
YIELD (MT/ha)

Catanduanes 20,092 24,622 0.82

Northern Samar 7,434 12,033 0.62

Leyte 4,833 11,970 0.40

Surigao del Sur 3,625 5,500 0.66

Davao Oriental 3,484 6,422 0.54

Sulu 3,196 5,250 0.61

Davao del Sur 3,067 6,245 0.49

Southern Leyte 2,498 5,621 0.44

Lanao del Sur 1,696 2,475 0.69

Agusan del Sur 1,674 3,236 0.52

Other Provinces 12,971 52,034 0.25

Legend: Mindanao Provinces

Source: BAS/PSA, abaca VCA 2014

iii. Abaca Production System

As the major focus of the of the road infrastructure project, abaca is grown to about 2,227
hectares in the municipality of Marihatag, which ranks as the third most dominant crop in
the municipality. In the Municipality, abaca production is primarily small holders. The
average land area devoted to the production of the crop is about 1,189 hectares. However,
in terms of the cropping system, most of the abaca growers are planting the crop as an
intercrop to main crops like coconut and other agro-forest crops. While there are those who
plant abaca as a monocrop, the frequency is very few.
iv. Processing
In terms of processing, there are two levels that abaca farmers process raw abaca into
fibers ready for the market The small producers, owing to the smallness of scale, can only
process abaca using manual stripping techniques. Consequently, the fiber processed is
coarse by nature and are referred to in the market as “Laguras”.
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However, this type of fiber is considered low grade and are

therefore valued lower in the market place.
The larger farmers who can afford motorized abaca stripping
machines are able to produce the finer grade referred to as
“S1” (S derived from the phrase spindle-strip derived referring
to the grading system for abaca fiber), which is valued with
a premium price in the market.
vi. Trading and Marketing
In the Municipality of Marihatag, there is only one
large buyer of abaca fiber. Farmers sell their abaca
fiber in bales transported generally by habal habal at a
cost of about PhP3 per kilogram during summer but
could be as high as PhP5 per kilogram during the
rainy season.

The “Integrator” buys the fiber from the farmers and

upon generating sufficient volume, transport the
produce to Davao or Cagayan de oro City (Figure B3). There are small buyers in some of
the major producing areas in the municipality like in Barangay Mahaba who also procures
fiber from small farmers and pass it on to “Integrators” in the neighboring municipalities like
San Agustin. However, the quality of the fiber is sensitive to proper storage. If marketing is
delayed, the price of fiber goes down by about 30% due to reduction in quality.
Figure B3 outlines the flow of abaca fibers from Marihatag and abaca fibers from the other
parts of Mindanao.

MARIHATAG

Figure B3. Flow of abaca fibers from Marihatag and other parts of Mindanao
 Page 19 of 19

5. Project Implementation and Prioritization (Livelihood Component)

i. Target beneficiaries (Andap Valley Complex)

Lumads Non-lumads
Lianga
San Agustin
Marihatag
Cagwait
Tago
San Miguel
Prosperidad

ii. Demographics

iii. Project Identification

a. Abaca production
b.

6. Project Implementation and Prioritization (Tourism Component)

i. Development of waterfalls