Print publicity is the cheapest form of advertising open to any company.
It’s free—if you know how. But first, you’ve got to learn how the print media operates. You’ve also got to remember that the working press is a corps of intelligent and decent professionals battling against time every day of every year.
The men and women who work in daily newspapers labor under the intense pressure of immutable deadlines. Editorial offices are a madhouse in the late afternoon. That’s deadline time for stories.
Phones ring non-stop. Everyone seems hunched over his or her keyboard madly typing away. A perspiring few stare blankly into space awaiting divine inspiration.
Your company’s press release arrives into this bedlam. If it’s on paper and is addressed to a specific editor, your release goes to that editor’s inbox pile. And it stays there until the editor gets to it.
You also have to fall in line if you email the release. Editors are deluged with emailed press releases. Now what?
Where your press release goes from here depends on how you “prepared” your release for publication. By “prepared” I mean going through a process that gives your release a better than even chance of getting published. Here’s that process in a nutshell.
1. Make your release easy to read so the editor won’t have to waste his time re-writing it. Writing a press release is never easy. If you didn’t take journalism, or if you had news writing but never took it seriously, you’re in deep shit this early. Better find someone who knows how to write news.
But if you do know how to write, you’re best served by using the five “Ws” (Who, What, When, Where, Why) and the “inverted pyramid” format (the most important news in the first three to five paragraphs; the rest of the story is background).
Keep the language simple but pack the story with information and quotes from a company boss, if possible. But make sure the most important info goes into the first three to five paragraphs.
That will make it easier for the editor to edit your story (without taking out the “meat” of your story) in case he runs out of layout space. Also, do create an appropriate title for your story.
Paragraph and make your paragraphs short. As a guide, make each paragraph consist of three short sentences. That’s the equivalent of about one printed inch in a newspaper.
Editors who can’t understand your press release, or who know they’ll have to spend a lot of their limited time re-writing it, will normally set the release aside.
A few matters of form: prefer Times Roman 12 points with 1.5 inch spacing when typing hard copy on MSWord. Also include your name and contact info (telephone, email) to establish your credibility. Proofread your story for mistakes.
Remove “honorifics” such as Mr., Mrs. and Ms but retain professional titles (Dr., Atty.). Refer to your company in the third person (not “our company” or “my company”).
2. Address your press release to a specific editor. You must never send out a press release addressed “The Editor.”
A broadsheet has a lot of editors. Sending it to that nebulous entity, “The Editor,” is the best way for your release to get lost in the newsroom forever.
Before you even write the release, however, call up the editorial department of the newspaper or newspapers you intend to send the release to. Identify yourself and your company and say you’re writing such and such a press release and whom should I send it to?
Jot down the editor’s name and his position. Ask if you should send the release by email or hard copy. Many broadsheets prefer email (it eliminates re-typing) while a few prefer hard copy.
Address the release to that specific editor in the subject line of your email along with the title of your press release and your company name. In the hard copy, legibly write down the editor’s name on the upper right hand part of the first page.
3. Do follow up your press release. This is probably the single most important factor in getting your release published if you’re unknown to the editor. “Huwag kang mahiya.”
Call the next afternoon, identify yourself and politely ask the editor if he got your press release. If he says he did, ask politely if he’ll use it. If he says he didn’t get the release, ask if you could re-send it and how you should send it. Follow up but don’t be “makulit” by phoning the editor everyday.
4. Re-issue the press release to the same editor if the release hasn’t been published after a week. Re-write the press release to make it read better. The editor might have forgotten receiving your first release and might not have seen the re-issue.
5. Increase the odds of your press release being published. You can issue it simultaneously to the seven English broadsheets, the top business paper and the two top English tabloids. That's 10 newspapers and odds are your release will see print in at least one or two of them.
Tuesday, February 24, 2009
Thursday, February 5, 2009
How to make your employees your customers
I find it odd that Filipino companies or Philippine-based companies hardly every bother to sell themselves to their employees. But do company employees need to be sold on the company they work for, you might ask?
The straight answer is, Yes. Because employees are employees for only eight hours a day, six-and-a-half if your exclude the one hour lunch break and two 15 minute meriendas.
Beyond that, employees are individuals who work for themselves. And all of a company’s managers and staff are also customers who’ll buy a competitor’s products or patronize his services if they’re convinced these are better than their own.
Company loyalty means just that—employees are loyal to their company. That loyalty doesn’t automatically extend to a company’s products or services. Brand loyalty has to be earned, even from a company’s employees.
And even if a company’s products or services can’t be used by its employees (call center services, for example), a company still has to work hard at promoting itself to them. That’s a good way of keeping hard-to-find employees, especially in leading edge industries such as call centers and business process outsourcing (BPO).
How does a company promote itself to its employees? The answer is to give employees a steady stream of information in a personalized package unique to the company.
Ideally, this information should build company and brand loyalty; foster productivity; create support for the company’s goals; make clear the company’s stand on vital issues and contribute to the bottom line.
That package is the company newsletter. Nowadays it’s also the company Intranet. The company website? Not quite since websites are impersonal salesmen that sell to the world.
Company newsletters used to be a big thing in the decades before the PC (the 1970s and 1980s). Now, they’re going the way of the Philippine Eagle and the precious few that survive are finding it hard to soldier on in the face of anorexic budgets and lack of skilled staff (editors and writers).
The latter, I guess, is the key reason for the dying out of the company newsletter. There simply aren’t that many good English editors and writers in today’s labor pool.
Ask the broadsheets. One of my editor friends, who also teaches journalism, complains that writing two paragraphs of passable English is a daunting challenge for many reporter candidates. And some of these people graduated with degrees in journalism or English!
If mass media is finding it next to impossible hiring good English writers, imagine what it’s like for corporations. Companies won’t hire an employee specifically to be a newsletter editor or writer. I haven’t come across a single instance of this yet.
A company usually assigns the newsletter to its human resources unit, which is usually understaffed and overworked. HR then appoints the newsletter’s staff after frantically searching its database for employees with even an iota of English writing experience.
When this fails, as it most often does, HR either does the job itself or cancels the newsletter. It might also hire an experienced editorial consultant like me to assist in providing content and layout for the newsletter.
Producing a printed or online newsletter is always tough. Ensuring its continued existence is even tougher considering its investment.
But you’d have to weigh the cost of this investment by the value of what you stand to gain. Newsletters impart information, a commodity that has value only when read.
Information, if intelligently used, is the basic building block of all sales. You buy because you’re convinced—sold—on the information presented to you. Advertising only jazzes up this information.
A newsletter or any other information carrier “sells” information to a market—a company’s employees—who are already half sold on the value of their product or service. The extra information provided by a company newsletter could push employees into becoming paying customers.
And there are also the other intangible advantages to the information provided by a newsletter. Advantages like improved productivity; stronger teamwork; a closer alignment with company goals.
A surprising bit of information is a recent report by U.S. retailers that TV is no longer the most influential advertising medium. Surprisingly, word of mouth and news inserts have replaced TV as more effective advertising media. Email and the Internet are also generating a lot of advertising buzz.
Word of mouth. Email. The Internet. Companies have these in abundance.
News inserts? That’s what newsletters are for.
The straight answer is, Yes. Because employees are employees for only eight hours a day, six-and-a-half if your exclude the one hour lunch break and two 15 minute meriendas.
Beyond that, employees are individuals who work for themselves. And all of a company’s managers and staff are also customers who’ll buy a competitor’s products or patronize his services if they’re convinced these are better than their own.
Company loyalty means just that—employees are loyal to their company. That loyalty doesn’t automatically extend to a company’s products or services. Brand loyalty has to be earned, even from a company’s employees.
And even if a company’s products or services can’t be used by its employees (call center services, for example), a company still has to work hard at promoting itself to them. That’s a good way of keeping hard-to-find employees, especially in leading edge industries such as call centers and business process outsourcing (BPO).
How does a company promote itself to its employees? The answer is to give employees a steady stream of information in a personalized package unique to the company.
Ideally, this information should build company and brand loyalty; foster productivity; create support for the company’s goals; make clear the company’s stand on vital issues and contribute to the bottom line.
That package is the company newsletter. Nowadays it’s also the company Intranet. The company website? Not quite since websites are impersonal salesmen that sell to the world.
Company newsletters used to be a big thing in the decades before the PC (the 1970s and 1980s). Now, they’re going the way of the Philippine Eagle and the precious few that survive are finding it hard to soldier on in the face of anorexic budgets and lack of skilled staff (editors and writers).
The latter, I guess, is the key reason for the dying out of the company newsletter. There simply aren’t that many good English editors and writers in today’s labor pool.
Ask the broadsheets. One of my editor friends, who also teaches journalism, complains that writing two paragraphs of passable English is a daunting challenge for many reporter candidates. And some of these people graduated with degrees in journalism or English!
If mass media is finding it next to impossible hiring good English writers, imagine what it’s like for corporations. Companies won’t hire an employee specifically to be a newsletter editor or writer. I haven’t come across a single instance of this yet.
A company usually assigns the newsletter to its human resources unit, which is usually understaffed and overworked. HR then appoints the newsletter’s staff after frantically searching its database for employees with even an iota of English writing experience.
When this fails, as it most often does, HR either does the job itself or cancels the newsletter. It might also hire an experienced editorial consultant like me to assist in providing content and layout for the newsletter.
Producing a printed or online newsletter is always tough. Ensuring its continued existence is even tougher considering its investment.
But you’d have to weigh the cost of this investment by the value of what you stand to gain. Newsletters impart information, a commodity that has value only when read.
Information, if intelligently used, is the basic building block of all sales. You buy because you’re convinced—sold—on the information presented to you. Advertising only jazzes up this information.
A newsletter or any other information carrier “sells” information to a market—a company’s employees—who are already half sold on the value of their product or service. The extra information provided by a company newsletter could push employees into becoming paying customers.
And there are also the other intangible advantages to the information provided by a newsletter. Advantages like improved productivity; stronger teamwork; a closer alignment with company goals.
A surprising bit of information is a recent report by U.S. retailers that TV is no longer the most influential advertising medium. Surprisingly, word of mouth and news inserts have replaced TV as more effective advertising media. Email and the Internet are also generating a lot of advertising buzz.
Word of mouth. Email. The Internet. Companies have these in abundance.
News inserts? That’s what newsletters are for.
Thursday, November 13, 2008
First work about Philippine Korean War battles published
What battles other than the famous Battle of Yuldong were fought by the Philippines in the Korean War? And what was the first and last Filipino battle in this war?
The battles—and victories—won by the Philippines in the Korean War
(1950-53) are highlights of the magazine, “Significant Filipino Battles of the Korean War,” edited by Art Villasanta, Korean War historian, and issued during the recent celebration of the 9th Korean War Veterans of the Philippines Memorial Day.
The magazine recounts five of the epic battles fought by the Philippine Expeditionary Force to Korea (PEFTOK) against the communist Chinese and North Koreans. It is the first published work about Filipino battles in the Korean War.
“The Philippines had a record of battlefield victory in the Korean War, but this isn’t that well known,” said Villasanta. “This modest work tells the story of some of the epic victories won by our country in the Korean War.”
Among these little know victories is the “Battle of Miudong/Syngue” fought in Nov. 1950, the first battle—and the first combat victory—won by the Philippines on foreign soil in its history. The battle was won by the 10th BCT commanded by Col. Mariano Azurin.
The work also sheds light on the last battle fought by the Philippines in the Korean War. This was another victorious defense of Christmas Hill by the 14th BCT under Col. Nicanor Jimenez. This last battle was won just two day before fighting in the Korean War ended on July 27, 1953.
The magazine tells the story of the longest PEFTOK battle: a bloody four-day fight for Hills Arsenal and Eerie in June 1952. This battle, also called the “Rizal Day Battle for Combat Outpost No. 8,” was a victory for the 19th BCT under Col. Ramon Aguirre.
On June 21, the morning after the vicious night battle that saw the final defeat of the last communist Chinese assault, a group of exhausted Filipino soldiers climbed Arsenal Hill and planted the Filipino flag on the summit. This act of victorious defiance showed the Chinese they had indeed lost the battle, and that Combat Outpost No. 8 remained firmly in Filipino hands.
Some 7,500 officers and men of the Philippine Army served in Korea. Organized into five battalion combat teams (BCTs), PEFTOK lost over 100 men killed and a further 400 wounded in action defending South Korea against communist invasion. The Philippines was among 16 member countries of the United Nations led by the United States that sent combat troops to the war.
The magazine was published as a souvenir program by the PEFTOK Veterans Association, Inc. (PVAI).
What battles other than the famous Battle of Yuldong were fought by the Philippines in the Korean War? And what was the first and last Filipino battle in this war?
The battles—and victories—won by the Philippines in the Korean War
(1950-53) are highlights of the magazine, “Significant Filipino Battles of the Korean War,” edited by Art Villasanta, Korean War historian, and issued during the recent celebration of the 9th Korean War Veterans of the Philippines Memorial Day.The magazine recounts five of the epic battles fought by the Philippine Expeditionary Force to Korea (PEFTOK) against the communist Chinese and North Koreans. It is the first published work about Filipino battles in the Korean War.
“The Philippines had a record of battlefield victory in the Korean War, but this isn’t that well known,” said Villasanta. “This modest work tells the story of some of the epic victories won by our country in the Korean War.”
Among these little know victories is the “Battle of Miudong/Syngue” fought in Nov. 1950, the first battle—and the first combat victory—won by the Philippines on foreign soil in its history. The battle was won by the 10th BCT commanded by Col. Mariano Azurin.
The work also sheds light on the last battle fought by the Philippines in the Korean War. This was another victorious defense of Christmas Hill by the 14th BCT under Col. Nicanor Jimenez. This last battle was won just two day before fighting in the Korean War ended on July 27, 1953.
The magazine tells the story of the longest PEFTOK battle: a bloody four-day fight for Hills Arsenal and Eerie in June 1952. This battle, also called the “Rizal Day Battle for Combat Outpost No. 8,” was a victory for the 19th BCT under Col. Ramon Aguirre.
On June 21, the morning after the vicious night battle that saw the final defeat of the last communist Chinese assault, a group of exhausted Filipino soldiers climbed Arsenal Hill and planted the Filipino flag on the summit. This act of victorious defiance showed the Chinese they had indeed lost the battle, and that Combat Outpost No. 8 remained firmly in Filipino hands.
Some 7,500 officers and men of the Philippine Army served in Korea. Organized into five battalion combat teams (BCTs), PEFTOK lost over 100 men killed and a further 400 wounded in action defending South Korea against communist invasion. The Philippines was among 16 member countries of the United Nations led by the United States that sent combat troops to the war.
The magazine was published as a souvenir program by the PEFTOK Veterans Association, Inc. (PVAI).
Wednesday, November 12, 2008
Sacrifice and brotherhood: The epic saga of the Philippines in the Korean War
By Art Villasanta
Korean War Historian
The Philippines fought in the Korean War (1950-53) despite having to contend with a growing communist-led rebellion and an economy mending from the immense destruction wrought by World War 2.
The Philippine Army had nine of its 10 Battalion Combat Teams (BCTs) and its only artillery battalion fighting the communist-led Hukbalahap or Huks when the 10th BCT was selected as the first Korea-bound combat unit on Aug. 23, 1950.
The BCTs were highly mobile, compact and self-supporting battalion-sized fighting units (1,000-1,500 men) designed to fight independently in their areas of operation. Distinguished by their heavy firepower, many BCTs consisted of infantry companies, an armor company equipped with either M4 Sherman or M5 Stuart tanks and a field artillery battery of six 105mm howitzers.
The BCTs were purposely organized as anti-guerilla units and were the key military reason for the defeat of the Huks by 1955. Together with other military units such as the Philippine Constabulary, the government fielded barely 25,000 men against the Huks in 1950.
In 1947, the Huks launched a rebellion aimed at overthrowing the Philippine government and replacing it with a totalitarian Marxist-Leninist state. The Huks had an armed strength of some 11,000 men by 1949, and many of their men were combat veterans of the guerilla war against the Japanese.
The Hukbalahap, an acronym for the “Hukbo ng Bayan Laban sa Hapon,” was one of the most potent of all Filipino guerilla units in World War 2
The discipline of its guerillas; the mobility and hitting power of its “squadrons” (units of 100 or more men) and the widespread support from civilians in Central Luzon allowed the Huks to inflict significant losses on the Japanese.
During the American campaign against the Japanese from 1944 to 1945, the Huks assisted the U.S. Army in re-taking towns and provinces in Central Luzon from the Japanese. In Tarlac, they raised both the Philippine and American flags after liberating the provincial capital.
The Huks, however, took a decidedly Marxist-Leninist bent upon widespread (and probably misguided) government suppression of the movement after the war.
The Huks had superior knowledge of the terrain in North and Central Luzon, the main theaters of the guerilla war. They could also count on the support of a mass base of peasants and farmers alienated from the government by chronic landlord abuses, grinding poverty, bureaucratic neglect and military atrocities, particularly those committed by the Military Police and Civilian Guards.
By 1952, the high watermark of their rebellion, the Huks had an active and armed strength of some 170,000 men and women and a mass base of over two million people.
The Huks, however, were finally made impotent by 1955 through a combination of heavy battlefield losses (especially among its leadership), effective civic action campaigns launched by Pres. Ramon Magsaysay and a dwindling mass base.
It was the first time anywhere in the world that a communist insurgency had been defeated.
“A great sacrifice”
Pres. Elpidio Quirino in 1950 said the Philippines was sending its men to fight in Korea in fulfillment of the country’s obligation as a co-signer of the United Nations Charter.
There was another, deeper reason for committing the Philippines’ limited military power to a foreign war, however. Korea was less than 1,500 miles away and a communist conquest of Korea would have been a severe blow to the Philippines’ campaign against the ascendant Huks.
“Poor as we are, this country is making a great sacrifice in sending you there (Korea), but every peso invested in you is a sound investment for the perpetuation of our liberty and freedom,” said Quirino to Filipinos who attended the massive farewell rally for the 10th BCT on Sept. 2, 1950 at the Rizal Memorial Coliseum in Manila.
And the Philippines was poor. The national government was almost bankrupt in 1950, relying heavily on U.S. financial aid and war reparations from Japan to stay afloat and to rebuild an economy shattered by World War 2.
Damage to industries was estimated at some P600 million while a further P800 million in assets were destroyed. The government was also plagued by massive bureaucratic corruption that siphoned off badly needed foreign aid worth more than P1 billion in 1950.
Despite these terrible realities and in an act of heroic brotherhood, the Philippines committed its meager armed strength to defend South Korea. It also made a commitment to send combat troops to Nationalist China to deter an impending Communist Chinese invasion of Taiwan.
One of the first to fight
On Sept. 19, 1950, barely three months after North Korea’s invasion of South Korea on June 25, the 10th Battalion Combat Team (Motorized) landed at the port city of Pusan in southeastern Korea.
The 10th BCT was the first of five Philippine battalions that served under the United Nations Command (UNC) in Korea. With its 1,400 officers and men, the 10th BCT was the third foreign combat contingent and the first Asian unit to enter the Korean War.
Our country was one of 16 UN member sates that sent combat troops to battle communist aggression. These nations, led by the United States, added their strengths to those of the armed forces of the Republic of Korea to preserve South Korea’s freedom against Communist North Korea and Communist China. Five more UN member states provided medical and humanitarian aid during the war.
General of the Army Douglas MacArthur, the man who led the Allies in defeating Japan, was commander-in-chief of the UNC. MacArthur was also the man who built and at one time led the pre-war Philippine Army. He also led the U.S. armed forces in liberating the Philippines from the Japanese in 1944-45.
Five BCTs with a total strength of some 7,500 officers and men served in Korea from 1950 to 1955 as the Philippine Expeditionary Force to Korea or PEFTOK. Taken together, these battalions constituted the Regimental Combat Team promised by the Philippine government in Aug. 1950 to the United Nations war effort.
PEFTOK consisted of these units:
The 10th, 20th, 19th and 14th BCTs saw combat in the Korean War. The 2nd BCT, on the other hand, helped protect and rebuild South Korea following the signing of the Armistice that ended fighting in the Korean War at Panmunjom on July 27, 1953.
The 10th, 20th, 19th and 14th BCTs acquitted themselves well in combat. Not one PEFTOK BCT was defeated or made incapable of combat as a result of enemy action despite many hard fought battles. PEFTOK fought successfully against its main enemy— the “Chinese People’s Volunteer Army”—in scores of actions for hills, cities and towns in North and South Korea.
Among the epic Filipino battles in the Korean War were the historic but obscure Battle of Miudong/Syngue (Nov. 1950), the first battle and combat victory in a foreign land won by the Philippines. This victory was gained in North Korea by the 10th BCT.
The epic Battle of Yuldong (April 1951) is the most famous of all Filipino battles and has come to represent the other battles fought by the Philippines in the war. It is commemorated every year on April 23 to recall the incredible and successful defensive battle fought by the 900 men of the 10th BCT against an entire Chinese army of 40,000 men.
The longest battle fought by the Philippines was the four-day Battle for Hills Arsenal and Eerie in June 1952. Also known as the Rizal Day Battle for Combat Outpost No. 8, the victory was won by the 19th BCT.
At the end of this gory battle that saw bitter hand-to-hand combat, a group of Filipino soldiers scaled Arsenal Hill and planted the Filipino flag on its summit. This act of heroic defiance on the morning of June 21 showed the beaten Chinese they had lost this great battle, and that the Philippines remained in control of Combat Outpost No. 8.
The last Filipino battle in the Korean War was won by the 14th BCT two days before the Armistice. This was another successful defense of Christmas Hill by the 14th BCT against the communist Chinese.
It is worth remembering that practically all the Philippines’ battles in the Korean War were fought at night. The communists chose to fight most of their battles under the stars, mainly because of their superiority in night fighting and their inferiority in airpower and artillery that made conventional daylight battles suicidal.
Of the battles listed above, only the Battle of Miudong/Syngue was fought in daylight, and this was in early morning.
The price the Philippines paid to defend South Korea included over 100 Filipino dead; 300 wounded and some 50 taken prisoner in three years of war. Sixteen Filipinos are still listed as missing in action 55 years after the Armistice.
The Philippines was unique among UN combatants in that it was the only one with an active communist insurgency and the only one whose soldiers had immediate combat experience. Many of the men, especially the officers who served in Korea, had also fought against the Japanese. This combat experience was invaluable in keeping casualties low and in PEFTOK accomplishing the combat missions assigned to it.
All PEFTOK battalions were attached to larger Allied units, mainly American, during their tours of duty in Korea. Relations with these “mother units” were neighborly, especially with the Americans.
PEFTOK and the Philippine Army were trained in American tactical doctrine. Its equipment was almost all of American origin (rifles, machine guns, helmets, artillery, tanks, grenades). A number of Filipino officers trained in American military schools such as West Point, and in specialist schools such as those for armor at Fort Knox in Kentucky.
That PEFTOK officers spoke and read English well averted miscommunication problems that proved fatal in the front line to some UNC contingents for whom English was not a second language.
(Editor’s note: Art Villasanta wrote a website honoring the Philippines’ role in the Korean War in 2000. The website is at www.geocities.com/peftok. He was also Editor-in-Chief of two mini-histories of the Korean War published in 2006 and 2008. He can be reached at peftok@yahoo.com. A veteran editor and researcher, Villasanta writes business reports, conducts research projects and provides information services.)
By Art Villasanta
Korean War Historian
The Philippines fought in the Korean War (1950-53) despite having to contend with a growing communist-led rebellion and an economy mending from the immense destruction wrought by World War 2.
The Philippine Army had nine of its 10 Battalion Combat Teams (BCTs) and its only artillery battalion fighting the communist-led Hukbalahap or Huks when the 10th BCT was selected as the first Korea-bound combat unit on Aug. 23, 1950.
The BCTs were highly mobile, compact and self-supporting battalion-sized fighting units (1,000-1,500 men) designed to fight independently in their areas of operation. Distinguished by their heavy firepower, many BCTs consisted of infantry companies, an armor company equipped with either M4 Sherman or M5 Stuart tanks and a field artillery battery of six 105mm howitzers.
The BCTs were purposely organized as anti-guerilla units and were the key military reason for the defeat of the Huks by 1955. Together with other military units such as the Philippine Constabulary, the government fielded barely 25,000 men against the Huks in 1950.
In 1947, the Huks launched a rebellion aimed at overthrowing the Philippine government and replacing it with a totalitarian Marxist-Leninist state. The Huks had an armed strength of some 11,000 men by 1949, and many of their men were combat veterans of the guerilla war against the Japanese.
The Hukbalahap, an acronym for the “Hukbo ng Bayan Laban sa Hapon,” was one of the most potent of all Filipino guerilla units in World War 2
The discipline of its guerillas; the mobility and hitting power of its “squadrons” (units of 100 or more men) and the widespread support from civilians in Central Luzon allowed the Huks to inflict significant losses on the Japanese.
During the American campaign against the Japanese from 1944 to 1945, the Huks assisted the U.S. Army in re-taking towns and provinces in Central Luzon from the Japanese. In Tarlac, they raised both the Philippine and American flags after liberating the provincial capital.
The Huks, however, took a decidedly Marxist-Leninist bent upon widespread (and probably misguided) government suppression of the movement after the war.
The Huks had superior knowledge of the terrain in North and Central Luzon, the main theaters of the guerilla war. They could also count on the support of a mass base of peasants and farmers alienated from the government by chronic landlord abuses, grinding poverty, bureaucratic neglect and military atrocities, particularly those committed by the Military Police and Civilian Guards.
By 1952, the high watermark of their rebellion, the Huks had an active and armed strength of some 170,000 men and women and a mass base of over two million people.
The Huks, however, were finally made impotent by 1955 through a combination of heavy battlefield losses (especially among its leadership), effective civic action campaigns launched by Pres. Ramon Magsaysay and a dwindling mass base.
It was the first time anywhere in the world that a communist insurgency had been defeated.
“A great sacrifice”
Pres. Elpidio Quirino in 1950 said the Philippines was sending its men to fight in Korea in fulfillment of the country’s obligation as a co-signer of the United Nations Charter.
There was another, deeper reason for committing the Philippines’ limited military power to a foreign war, however. Korea was less than 1,500 miles away and a communist conquest of Korea would have been a severe blow to the Philippines’ campaign against the ascendant Huks.
“Poor as we are, this country is making a great sacrifice in sending you there (Korea), but every peso invested in you is a sound investment for the perpetuation of our liberty and freedom,” said Quirino to Filipinos who attended the massive farewell rally for the 10th BCT on Sept. 2, 1950 at the Rizal Memorial Coliseum in Manila.
And the Philippines was poor. The national government was almost bankrupt in 1950, relying heavily on U.S. financial aid and war reparations from Japan to stay afloat and to rebuild an economy shattered by World War 2.
Damage to industries was estimated at some P600 million while a further P800 million in assets were destroyed. The government was also plagued by massive bureaucratic corruption that siphoned off badly needed foreign aid worth more than P1 billion in 1950.
Despite these terrible realities and in an act of heroic brotherhood, the Philippines committed its meager armed strength to defend South Korea. It also made a commitment to send combat troops to Nationalist China to deter an impending Communist Chinese invasion of Taiwan.
One of the first to fight
On Sept. 19, 1950, barely three months after North Korea’s invasion of South Korea on June 25, the 10th Battalion Combat Team (Motorized) landed at the port city of Pusan in southeastern Korea.
The 10th BCT was the first of five Philippine battalions that served under the United Nations Command (UNC) in Korea. With its 1,400 officers and men, the 10th BCT was the third foreign combat contingent and the first Asian unit to enter the Korean War.
Our country was one of 16 UN member sates that sent combat troops to battle communist aggression. These nations, led by the United States, added their strengths to those of the armed forces of the Republic of Korea to preserve South Korea’s freedom against Communist North Korea and Communist China. Five more UN member states provided medical and humanitarian aid during the war.
General of the Army Douglas MacArthur, the man who led the Allies in defeating Japan, was commander-in-chief of the UNC. MacArthur was also the man who built and at one time led the pre-war Philippine Army. He also led the U.S. armed forces in liberating the Philippines from the Japanese in 1944-45.
Five BCTs with a total strength of some 7,500 officers and men served in Korea from 1950 to 1955 as the Philippine Expeditionary Force to Korea or PEFTOK. Taken together, these battalions constituted the Regimental Combat Team promised by the Philippine government in Aug. 1950 to the United Nations war effort.
PEFTOK consisted of these units:
- 10th Battalion Combat Team (Motorized)
- 20th Battalion Combat Team (Leaders)
- 19th Battalion Combat Team (Bloodhound)
- 14th Battalion Combat Team (Avengers)
- 2nd Battalion Combat Team (Bulldogs)
The 10th, 20th, 19th and 14th BCTs saw combat in the Korean War. The 2nd BCT, on the other hand, helped protect and rebuild South Korea following the signing of the Armistice that ended fighting in the Korean War at Panmunjom on July 27, 1953.
The 10th, 20th, 19th and 14th BCTs acquitted themselves well in combat. Not one PEFTOK BCT was defeated or made incapable of combat as a result of enemy action despite many hard fought battles. PEFTOK fought successfully against its main enemy— the “Chinese People’s Volunteer Army”—in scores of actions for hills, cities and towns in North and South Korea.
Among the epic Filipino battles in the Korean War were the historic but obscure Battle of Miudong/Syngue (Nov. 1950), the first battle and combat victory in a foreign land won by the Philippines. This victory was gained in North Korea by the 10th BCT.
The epic Battle of Yuldong (April 1951) is the most famous of all Filipino battles and has come to represent the other battles fought by the Philippines in the war. It is commemorated every year on April 23 to recall the incredible and successful defensive battle fought by the 900 men of the 10th BCT against an entire Chinese army of 40,000 men.
The longest battle fought by the Philippines was the four-day Battle for Hills Arsenal and Eerie in June 1952. Also known as the Rizal Day Battle for Combat Outpost No. 8, the victory was won by the 19th BCT.
At the end of this gory battle that saw bitter hand-to-hand combat, a group of Filipino soldiers scaled Arsenal Hill and planted the Filipino flag on its summit. This act of heroic defiance on the morning of June 21 showed the beaten Chinese they had lost this great battle, and that the Philippines remained in control of Combat Outpost No. 8.
The last Filipino battle in the Korean War was won by the 14th BCT two days before the Armistice. This was another successful defense of Christmas Hill by the 14th BCT against the communist Chinese.
It is worth remembering that practically all the Philippines’ battles in the Korean War were fought at night. The communists chose to fight most of their battles under the stars, mainly because of their superiority in night fighting and their inferiority in airpower and artillery that made conventional daylight battles suicidal.
Of the battles listed above, only the Battle of Miudong/Syngue was fought in daylight, and this was in early morning.
The price the Philippines paid to defend South Korea included over 100 Filipino dead; 300 wounded and some 50 taken prisoner in three years of war. Sixteen Filipinos are still listed as missing in action 55 years after the Armistice.
The Philippines was unique among UN combatants in that it was the only one with an active communist insurgency and the only one whose soldiers had immediate combat experience. Many of the men, especially the officers who served in Korea, had also fought against the Japanese. This combat experience was invaluable in keeping casualties low and in PEFTOK accomplishing the combat missions assigned to it.
All PEFTOK battalions were attached to larger Allied units, mainly American, during their tours of duty in Korea. Relations with these “mother units” were neighborly, especially with the Americans.
PEFTOK and the Philippine Army were trained in American tactical doctrine. Its equipment was almost all of American origin (rifles, machine guns, helmets, artillery, tanks, grenades). A number of Filipino officers trained in American military schools such as West Point, and in specialist schools such as those for armor at Fort Knox in Kentucky.
That PEFTOK officers spoke and read English well averted miscommunication problems that proved fatal in the front line to some UNC contingents for whom English was not a second language.
(Editor’s note: Art Villasanta wrote a website honoring the Philippines’ role in the Korean War in 2000. The website is at www.geocities.com/peftok. He was also Editor-in-Chief of two mini-histories of the Korean War published in 2006 and 2008. He can be reached at peftok@yahoo.com. A veteran editor and researcher, Villasanta writes business reports, conducts research projects and provides information services.)
Saturday, May 3, 2008
“Hu wo tse eu choi lai la” (Here come the trains again)
The “hu wo tse” (trains) are back.
But if it sounds Chinese, that’s because the “chi yen” (money) to finance the Manila-Clark Rapid Railway System; the “chi tzi” (equipment) to build it; the “kong chen she” (engineers) now doing site surveys and the diesel engine“hu wo tse” themselves all come from China.
The People’s Republic of China has lent the Philippines $421 million (P22.7 billion) to finance 95% of Phase 1 of the Philippines’ first major attempt to re-link Metro Manila with northern Luzon by rail in 25 years.
The Manila-Clark Rapid Railway System, better known as NorthRail, is China’s largest project in Southeast Asia. According to the Chinese, the NorthRail loan is the first 20-year concessionary loan ever extended by China to any government at 3% interest with a five-year grace period.
That China finds itself in the unique position of being lead player in resurrecting the decrepit but strategically vital North Luzon railroad system occurred because no other country wanted to take on this job.
NorthRail’s genesis goes back to 1994 when the Spaniards signaled their intent to develop North Luzon’s railways. After this proposal went belly up in 1998 because of a financing impasse, the Philippines turned to Japan in 1999. Problems with relocating squatters from the project site in Caloocan City derailed Japanese participation, however.
Enter the dragon
Enter the Chinese. In September 2002, a Memorandum of Understanding (MoU) was signed between the North Luzon Railways Corporation (NorthRail), and China National Machinery and Equipment Group (CNMEG) on a railroad project from Caloocan City to Malolos, Bulacan.
NorthRail, a wholly owned subsidiary of the Bases Conversion Development Authority (BCDA), was established to develop, construct, operate and manage a railroad system serving Metro Manila, Central and Northern Luzon. Incorporated in August 1995, it is also to develop, construct, manage, own, lease, sublease and operate establishments and facilities of all kinds related to the railroad system.
In 2003, the government approved NorthRail’s Phase 1 Section 1 from Caloocan City to Malolos, a distance of 32 kilometers. In August, an MoU for US$400 million was signed between the Philippines and the Export-Import Bank of China for the construction of Phase 1 Section 1.
Phase I covers the 80 kilometer rail line between Caloocan City to the Diosdado Macapagal International Airport (DMIA) at the Clark Special Economic Zone in Pampanga province north of Manila. Section 1 is the stretch of railway from Caloocan City to Malolos, Bulacan. Section 2 extends from Malolos to DMIA and covers 45 kilometers. The budget for Section 2 is $500 million.
The Caloocan to DMIA line is the first of a four-phase railroad construction plan that will eventually make almost high-speed train travel a reality in North Luzon from Caloocan to San Fernando, La Union.
NorthRail President Jose Cortez, Jr. said NorthRail really began rolling with the help of President Gloria Macapagal-Arroyo and Jose de Venecia, Speaker of the House of Representatives.
Cortez said it was de Venecia who suggested the Chinese as project partners. As for the President, Cortez credits her with finally getting the project to see the light of day, and for cutting the project loan interest rate by half following a telephone call to Chinese President Hu Jintao.
“She’s been very helpful to the project,” said Cortez, a veteran trainman who was once chairman of Philippine National Railway (PNR). He has been NorthRail president since 2002.
Construction begins September
With NorthRail clear of its prolonged birth pains, Cortez looks forward to this September when work on the railway really begins. His next milestone will be 2008 when Section 1 will be up and running.
Work on Section 2 will then start. Completion of Phase 1 is set for 2010. The complete NorthRail system will consist of Phase 1, Phase 2 (San Fernando, Pampanga to Subic, Zambales), Phase 3 (Caloocan to Fort Bonifacio) and Phase 4 (Clark to San Fernando, La Union).
If Section 1 goes as planned, commuters by 2008 will zip from Caloocan to Malolos in just 37 minutes at an average speed of 50 km/h, saving close to two hours in road travel on public utility vehicles. NorthRail’s Chinese-built DMUs (diesel multiple units) have a maximum speed of 120 km/h but Cortez says they won’t need that much speed since passenger safety is the paramount concern.
NorthRail trains, however, are in no way comparable in performance to high-speed trains such as China’s German-built magnetic levitation or “maglev” trains in Shanghai (the world’s fastest), Japan’s Shinkansen (the famous Bullet Train) and France’s TGV (Europe’s fastest) that can reach speeds in excess of 500 km/h.
Fare savings for NorthRail commuters will be considerable. NorthRail initially estimated its fare for the entire 32-kilometer length of Section 1 at P42 (compared to P70 for public buses) based on a P10.00 boarding fee and an additional P1.00 charge per kilometer.
Cortez, however, revealed that NorthRail is currently preparing documentation amending the initial fare matrix submitted to the government. This new fare matrix, which Cortez said reflects an optimized fare structure, uses an P8.00 boarding fee plus P1.35 per additional kilometer traveled for a total fare of P51.20 for 32 kilometers.
Cortez said making NorthRail a going concern from the get go was essential, hence his push for an optimized fare structure and diesel fed trains.
“I told the President I need fares that will allow NorthRail to survive and pay its debts,” Cortez pointed out.
Because of this insistence on revenues, profitability is not a mirage in the desert for NorthRail.
“We expect to break even on the eighth year of our operation using the P10.00 + P1.00 fare structure. With an optimized fare structure, the breakeven year would be earlier.”
Cargo will be the lifesaver
For companies and businesspersons, however, the payoff will come after 2010 when NorthRail begins running freight trains carrying goods and produce.
“We will definitely have cargo,” Cortez said. “Cargo will be the lifesaver of this rail system. Once the entire system is operational, we will decide on what kind of cars we need for cargo.”
Cortez estimates that freight should eventually account for at least half of NorthRail’s revenues. Freight will be run at night and during off-peak hours. Hauling freight, however, will require a different rolling stock configuration and design.
“We will determine the freight rates and details of service at a later time, when NorthRail has already bidded out and selected an operations and maintenance contractor.”
In making the decision to transport cargo, NorthRail learned from the experience of both the Light Rail Transit (LRT) and the Metro Rail Transit (MRT). These heavily subsidized operations are in no position to run cargo, and will continue relying on government support for survival.
Opting for diesel-run instead of electric-run trains such as those used by the LRT and MRT cuts operating expenses considerably since the cost of electricity in the Philippines is quite high.
Cortez believes there are “no real savings” if NorthRail were to go electric, unless the trains are in Mindanao where electricity is cheaper. NorthRail DMUs, however, can be upgraded to run on electricity should this option prove more economical in the future.
“We hope fuel prices do not fluctuate too much,” said Cortez. The assumptions used in the ridership and revenue projections used constant inflation rates to reflect public transport fare increases.
“However, it should be noted that the projections are still conservative in its other assumptions, such as no connection with MRT 3 nor LRT 1, and revenues are purely from commuter service, with a small percentage from commercial advertising.”
A new revenue stream being pushed by NorthRail is having large corporations build the six railway stations in Section 1 in return for building shopping complexes at the stations.
Cortez said he has verbal agreements with the giant SM Shoemart department store chain in which SM Shoemart has agreed to build two of the six stations in Phase 1. He acknowledges that money is in building commercial centers at the stations.
“If you have people who are interested, they can build our railway stations and we will let them operate commercial centers at the station,” he pointed out.
Concrete fences
At least 30 four-car DMU train sets will be bought from China within the next three years for the four phases of NorthRail. The existing PNR single track will be converted into a double track, the first of its kind in the Philippines.
The tracks will be narrow gauge (1.067 meters) to allow interconnection with SouthRail, which is to be built by the South Koreans. SouthRail’s first phase will see the rehabilitation of PNR tracks from Caloocan City to Alabang. Thus, Caloocan will be the hub of two extensive rail systems that will enable seamless travel from La Union in North Luzon to Sorsogon in Bicol probably by the next decade.
Travel time along NorthRail’s Section 1 will take about 37 minutes with an expected load of close to 42,000 passengers daily. Some 150,000 passengers are expected to commute via NorthRail everyday in the first year of the project. Cortez expects this number to balloon to 350,000 riders daily in 10 years’ time.
There won’t be much of the scenic Philippine countryside for commuters and foreign tourists to see, however, since the NorthRail tracks will be enclosed on both sides by a 10-foot tall concrete wall. Cortez said this 32-kilometer long wall, plus roving security guards and an electronic security system, are necessary to keep out vandals and protect expensive property.
Cortez admits that staring at a gray concrete fence kilometer after kilometer for over 30 minutes is bound to be an ordeal, but said NorthRail was working on ways to overcome the boredom problem.
For now, CNMEG has begun preparatory work on the Caloocan to Malolos stretch. Some 7,400 squatters have been relocated from Caloocan up to the boundary of Valenzuela and Meycauayan, Bulacan. About 12,800 squatters will have to be relocated before September.
Cortez noted that Vice President Noli de Castro played a key role in the peaceful relocation of squatters. Cortez said the Vice President, who is Chairman of the Housing and Urban Development Coordinating Council (HUDCC), remains very much involved in relocating the remaining squatter families.
The 30 Chinese engineers in country are undertaking site surveys using GPS and preliminary soil investigation with Chinese borehole equipment.
Phase 1 financing is assured. During last April’s state visit by Chinese President Hu Jintao, China Eximbank committed to providing a preferential buyer’s credit facility of $500 million with priority for Section 2. NorthRail also hopes the Chinese government will extend a credit facility for the housing and relocation component of Section 2.
Once all four phases are completed, Cortez sees NorthRail as a catalyst in developing Central and North Luzon. In essence, he expects NorthRail to play the role the railroad system did in the U.S.’ rapid industrial growth in the early 20th century.
Cortez believes NorthRail will bring development to the region by providing fast and reliable transport service.
“This will entice investors to locate businesses outside Metro Manila, thereby decongesting the metropolis. Considering the relatively lower land values of land and real estate in the region, investors will most likely establish businesses along the project alignment. This will give rise to more economic activities, more job opportunities and better businesses.”
Rebuilding Philippine railways
House Speaker de Venecia said NorthRail is the opening phase of a well-planned effort to rebuild the country’s railway system in North and South Luzon; on Panay in the Visayas and build Mindanao’s first railroad system in over a century.
An international consortium supported by the governments of France, Germany, Austria, Thailand and India is conducting the feasibility study for Mindanao rail.
The Americans built Panay’s first railroad in 1907. Interestingly, the most modern pre-War railroad system was built on Corregidor Island (or Fort Mills) off Manila Bay. This 14,700 foot long electric railway transported troops and supplies and snaked across the island, starting at the North Mine Wharf and connecting junctions to Lorcha Dock. It was destroyed during the war.
The Philippines currently has less than 900 kilometers of railroads. Most of the 378 kilometers in operation are located in Luzon, specifically in southern Luzon and the Bicol region.
The southern Luzon line is used by PNR, which from 2001 to April 2003 transported some 11 million passengers. About 675,000 of this total were long-distance passengers to and from Bicol and 10 million commuters in and around Metro Manila.
But if it sounds Chinese, that’s because the “chi yen” (money) to finance the Manila-Clark Rapid Railway System; the “chi tzi” (equipment) to build it; the “kong chen she” (engineers) now doing site surveys and the diesel engine“hu wo tse” themselves all come from China.
The People’s Republic of China has lent the Philippines $421 million (P22.7 billion) to finance 95% of Phase 1 of the Philippines’ first major attempt to re-link Metro Manila with northern Luzon by rail in 25 years.
The Manila-Clark Rapid Railway System, better known as NorthRail, is China’s largest project in Southeast Asia. According to the Chinese, the NorthRail loan is the first 20-year concessionary loan ever extended by China to any government at 3% interest with a five-year grace period.
That China finds itself in the unique position of being lead player in resurrecting the decrepit but strategically vital North Luzon railroad system occurred because no other country wanted to take on this job.
NorthRail’s genesis goes back to 1994 when the Spaniards signaled their intent to develop North Luzon’s railways. After this proposal went belly up in 1998 because of a financing impasse, the Philippines turned to Japan in 1999. Problems with relocating squatters from the project site in Caloocan City derailed Japanese participation, however.
Enter the dragon
Enter the Chinese. In September 2002, a Memorandum of Understanding (MoU) was signed between the North Luzon Railways Corporation (NorthRail), and China National Machinery and Equipment Group (CNMEG) on a railroad project from Caloocan City to Malolos, Bulacan.
NorthRail, a wholly owned subsidiary of the Bases Conversion Development Authority (BCDA), was established to develop, construct, operate and manage a railroad system serving Metro Manila, Central and Northern Luzon. Incorporated in August 1995, it is also to develop, construct, manage, own, lease, sublease and operate establishments and facilities of all kinds related to the railroad system.
In 2003, the government approved NorthRail’s Phase 1 Section 1 from Caloocan City to Malolos, a distance of 32 kilometers. In August, an MoU for US$400 million was signed between the Philippines and the Export-Import Bank of China for the construction of Phase 1 Section 1.
Phase I covers the 80 kilometer rail line between Caloocan City to the Diosdado Macapagal International Airport (DMIA) at the Clark Special Economic Zone in Pampanga province north of Manila. Section 1 is the stretch of railway from Caloocan City to Malolos, Bulacan. Section 2 extends from Malolos to DMIA and covers 45 kilometers. The budget for Section 2 is $500 million.
The Caloocan to DMIA line is the first of a four-phase railroad construction plan that will eventually make almost high-speed train travel a reality in North Luzon from Caloocan to San Fernando, La Union.
NorthRail President Jose Cortez, Jr. said NorthRail really began rolling with the help of President Gloria Macapagal-Arroyo and Jose de Venecia, Speaker of the House of Representatives.
Cortez said it was de Venecia who suggested the Chinese as project partners. As for the President, Cortez credits her with finally getting the project to see the light of day, and for cutting the project loan interest rate by half following a telephone call to Chinese President Hu Jintao.
“She’s been very helpful to the project,” said Cortez, a veteran trainman who was once chairman of Philippine National Railway (PNR). He has been NorthRail president since 2002.
Construction begins September
With NorthRail clear of its prolonged birth pains, Cortez looks forward to this September when work on the railway really begins. His next milestone will be 2008 when Section 1 will be up and running.
Work on Section 2 will then start. Completion of Phase 1 is set for 2010. The complete NorthRail system will consist of Phase 1, Phase 2 (San Fernando, Pampanga to Subic, Zambales), Phase 3 (Caloocan to Fort Bonifacio) and Phase 4 (Clark to San Fernando, La Union).
If Section 1 goes as planned, commuters by 2008 will zip from Caloocan to Malolos in just 37 minutes at an average speed of 50 km/h, saving close to two hours in road travel on public utility vehicles. NorthRail’s Chinese-built DMUs (diesel multiple units) have a maximum speed of 120 km/h but Cortez says they won’t need that much speed since passenger safety is the paramount concern.
NorthRail trains, however, are in no way comparable in performance to high-speed trains such as China’s German-built magnetic levitation or “maglev” trains in Shanghai (the world’s fastest), Japan’s Shinkansen (the famous Bullet Train) and France’s TGV (Europe’s fastest) that can reach speeds in excess of 500 km/h.
Fare savings for NorthRail commuters will be considerable. NorthRail initially estimated its fare for the entire 32-kilometer length of Section 1 at P42 (compared to P70 for public buses) based on a P10.00 boarding fee and an additional P1.00 charge per kilometer.
Cortez, however, revealed that NorthRail is currently preparing documentation amending the initial fare matrix submitted to the government. This new fare matrix, which Cortez said reflects an optimized fare structure, uses an P8.00 boarding fee plus P1.35 per additional kilometer traveled for a total fare of P51.20 for 32 kilometers.
Cortez said making NorthRail a going concern from the get go was essential, hence his push for an optimized fare structure and diesel fed trains.
“I told the President I need fares that will allow NorthRail to survive and pay its debts,” Cortez pointed out.
Because of this insistence on revenues, profitability is not a mirage in the desert for NorthRail.
“We expect to break even on the eighth year of our operation using the P10.00 + P1.00 fare structure. With an optimized fare structure, the breakeven year would be earlier.”
Cargo will be the lifesaver
For companies and businesspersons, however, the payoff will come after 2010 when NorthRail begins running freight trains carrying goods and produce.
“We will definitely have cargo,” Cortez said. “Cargo will be the lifesaver of this rail system. Once the entire system is operational, we will decide on what kind of cars we need for cargo.”
Cortez estimates that freight should eventually account for at least half of NorthRail’s revenues. Freight will be run at night and during off-peak hours. Hauling freight, however, will require a different rolling stock configuration and design.
“We will determine the freight rates and details of service at a later time, when NorthRail has already bidded out and selected an operations and maintenance contractor.”
In making the decision to transport cargo, NorthRail learned from the experience of both the Light Rail Transit (LRT) and the Metro Rail Transit (MRT). These heavily subsidized operations are in no position to run cargo, and will continue relying on government support for survival.
Opting for diesel-run instead of electric-run trains such as those used by the LRT and MRT cuts operating expenses considerably since the cost of electricity in the Philippines is quite high.
Cortez believes there are “no real savings” if NorthRail were to go electric, unless the trains are in Mindanao where electricity is cheaper. NorthRail DMUs, however, can be upgraded to run on electricity should this option prove more economical in the future.
“We hope fuel prices do not fluctuate too much,” said Cortez. The assumptions used in the ridership and revenue projections used constant inflation rates to reflect public transport fare increases.
“However, it should be noted that the projections are still conservative in its other assumptions, such as no connection with MRT 3 nor LRT 1, and revenues are purely from commuter service, with a small percentage from commercial advertising.”
A new revenue stream being pushed by NorthRail is having large corporations build the six railway stations in Section 1 in return for building shopping complexes at the stations.
Cortez said he has verbal agreements with the giant SM Shoemart department store chain in which SM Shoemart has agreed to build two of the six stations in Phase 1. He acknowledges that money is in building commercial centers at the stations.
“If you have people who are interested, they can build our railway stations and we will let them operate commercial centers at the station,” he pointed out.
Concrete fences
At least 30 four-car DMU train sets will be bought from China within the next three years for the four phases of NorthRail. The existing PNR single track will be converted into a double track, the first of its kind in the Philippines.
The tracks will be narrow gauge (1.067 meters) to allow interconnection with SouthRail, which is to be built by the South Koreans. SouthRail’s first phase will see the rehabilitation of PNR tracks from Caloocan City to Alabang. Thus, Caloocan will be the hub of two extensive rail systems that will enable seamless travel from La Union in North Luzon to Sorsogon in Bicol probably by the next decade.
Travel time along NorthRail’s Section 1 will take about 37 minutes with an expected load of close to 42,000 passengers daily. Some 150,000 passengers are expected to commute via NorthRail everyday in the first year of the project. Cortez expects this number to balloon to 350,000 riders daily in 10 years’ time.
There won’t be much of the scenic Philippine countryside for commuters and foreign tourists to see, however, since the NorthRail tracks will be enclosed on both sides by a 10-foot tall concrete wall. Cortez said this 32-kilometer long wall, plus roving security guards and an electronic security system, are necessary to keep out vandals and protect expensive property.
Cortez admits that staring at a gray concrete fence kilometer after kilometer for over 30 minutes is bound to be an ordeal, but said NorthRail was working on ways to overcome the boredom problem.
For now, CNMEG has begun preparatory work on the Caloocan to Malolos stretch. Some 7,400 squatters have been relocated from Caloocan up to the boundary of Valenzuela and Meycauayan, Bulacan. About 12,800 squatters will have to be relocated before September.
Cortez noted that Vice President Noli de Castro played a key role in the peaceful relocation of squatters. Cortez said the Vice President, who is Chairman of the Housing and Urban Development Coordinating Council (HUDCC), remains very much involved in relocating the remaining squatter families.
The 30 Chinese engineers in country are undertaking site surveys using GPS and preliminary soil investigation with Chinese borehole equipment.
Phase 1 financing is assured. During last April’s state visit by Chinese President Hu Jintao, China Eximbank committed to providing a preferential buyer’s credit facility of $500 million with priority for Section 2. NorthRail also hopes the Chinese government will extend a credit facility for the housing and relocation component of Section 2.
Once all four phases are completed, Cortez sees NorthRail as a catalyst in developing Central and North Luzon. In essence, he expects NorthRail to play the role the railroad system did in the U.S.’ rapid industrial growth in the early 20th century.
Cortez believes NorthRail will bring development to the region by providing fast and reliable transport service.
“This will entice investors to locate businesses outside Metro Manila, thereby decongesting the metropolis. Considering the relatively lower land values of land and real estate in the region, investors will most likely establish businesses along the project alignment. This will give rise to more economic activities, more job opportunities and better businesses.”
Rebuilding Philippine railways
House Speaker de Venecia said NorthRail is the opening phase of a well-planned effort to rebuild the country’s railway system in North and South Luzon; on Panay in the Visayas and build Mindanao’s first railroad system in over a century.
An international consortium supported by the governments of France, Germany, Austria, Thailand and India is conducting the feasibility study for Mindanao rail.
The Americans built Panay’s first railroad in 1907. Interestingly, the most modern pre-War railroad system was built on Corregidor Island (or Fort Mills) off Manila Bay. This 14,700 foot long electric railway transported troops and supplies and snaked across the island, starting at the North Mine Wharf and connecting junctions to Lorcha Dock. It was destroyed during the war.
The Philippines currently has less than 900 kilometers of railroads. Most of the 378 kilometers in operation are located in Luzon, specifically in southern Luzon and the Bicol region.
The southern Luzon line is used by PNR, which from 2001 to April 2003 transported some 11 million passengers. About 675,000 of this total were long-distance passengers to and from Bicol and 10 million commuters in and around Metro Manila.
Sunday, April 13, 2008
“Do I get to play golf before you cut me open, doc?”
The image of the stereotypical American tourist in this country is about to undergo a major makeover.
At least, that’s what the Philippines is counting on once its medical tourism program gets up to speed in about three years. Photos of dear old dad in a loud Hawaiian shirt toting the inevitable camera; of mom snapping up Philippine handicraft with her Visa and the kids pounding on their GameBoys might soon go the way of the buggy whip.
Replacing them will be images of dad in a floral hospital gown awaiting open-heart surgery; of mom staring at Photoshop images of her sexier figure after a tummy tuck and the kids searching Google for the coolest spas is the Philippines.
And whether they’re in Manila, Cebu or Mindanao, Mr. & Mrs. John Q. Public will get A-list medical care from skilled Filipino physicians (many U.S. trained) working at globally accredited medical facilities.
But best of all, they’ll save a ton of money in the process (up to 80%). Now, that’s good news for the heart.
Baby Boomers can look forward to this pleasant state-of-affairs when both the public and private sector finish polishing the many facets of the soon-to-gleam jewel called medical tourism.
Perks for investors is one of those facets. Accreditation of doctors and medical and wellness facilities are others.
Then there’s insurance portability, an advantage that should lure millions of foreigners covered by medical insurance such as Blue Shield and Blue Cross.
Grand visions
The government has grand visions for a medical tourism program that focuses on attracting Americans and North American “balikbayans” to these “Islands of Wellness”.
The health and wellness tourism industry posted worldwide revenues estimated at $40 billion in 2005 and is expected to grow 33% annually. Medical tourism, spas and alternative treatments and cosmetic tourism are service sectors comprising health and wellness tourism.
The government projects medical tourism as a billion dollar service sector by early the next decade. Medical tourism is also expected to put a brake on the massive exodus of nurses to other countries, and help reverse the sad trend of Filipino doctors becoming nurses just so they can find work in the USA and the UK.
It is widely defined as a health holiday that includes cost effective private medical care and tour packages (sightseeing, golf and shopping, for example). It also includes leisure and relaxation activities such as spa therapies to re-invigorate patients.
It’s a growing worldwide trend targeted mainly at citizens of wealthy nations such as the U.S. where soaring health insurance costs are making many medical procedures prohibitively expensive.
One in five tourists is an American and over 10% more Americans visited the Philippines in 2005 compared to 2004. Balikbayan arrivals were up almost 15% in the same period. The Department of Tourism (DoT) expects those growth rates to double this year.
Korea, Japan, Taiwan and Hong Kong are the four other top sources of foreign tourists who, as a whole, poured $2 billion into the Philippine economy last year.
The government initially expected to earn some $300 million from the first year of its much-hyped “Philippine Medical Tourism Program (PMTP)” and $1-2 billion a year for the next five years.
But these numbers have been scaled back a bit as the Philippines realizes it first needs to focus more attention on strategic measures such as getting foreigners to invest in world-class medical tourism infrastructure.
Dr. Paul Reganit, PMTP Project Manager for the Department of Health (DOH) and a Masters in Public Health from Harvard Medical School, said the government is now busy organizing its medical tourism effort and cutting the red tape affecting both medical tourists and medical tourism investors.
On stream is a four-phase plan to identify and accredit partner PMTP medical institutions throughout the Philippines. The first two phases (1A and 1B) will identify partners in Metro Manila while the remaining two phases will select partners outside Metro Manila and inspect partner facilities nationwide, including spas and retirement villages.
“After the full implementation of Phase 1, we should see some 125,000 medical tourists a year,” said Dr. Reganit.
He estimates these tourists could spend $125 million during their short (less than a week’s) stay in the Philippines. And that’s based on each tourist spending only $1,000 during his stay. He expects these numbers to jump with the completion of all four phases.
Investor perks
Dr. Reganit said the government is putting in place investor perks to help build the medical tourism sector. A Memorandum of Agreement between DOH and the Philippine Export Processing Zone Authority (PEZA) creating “Medical Tourism Special Economic Zones” is due to be signed this year.
The MOA offers incentives such as income tax holidays, special resident visas and incentives under the Build-Operate-Transfer Law.
Executive Order 226 or the Omnibus Investments Code also grants incentives to activities in the Investment Priorities Plan (IPP). The Board of Investments (BOI) has included health and wellness services in the IPP for 2005 and 2006 and is expected to extend these perks into 2007.
Ownership or management of hospitals is an investment area worth considering, said industry sources. Over half the Philippines’ healthcare expenditure comes from the private sector, a fact that illustrates the key importance of private hospitals in healthcare delivery.
While the Constitution does not allow foreigners full ownership of land, foreigners can enter into joint ventures or invest in existing medical facilities.
The former was the route taken by Cardiovascular Hospitals of America, LLC (CHA) and owner of a four-hospital system in the USA.
Bumrungrad Hospital, Thailand’s largest medical tourism facility, chose the latter alternative by taking control of the Asian Hospital and Medical Center in Alabang. Thailand is Asia’s leader in the medical and cosmetic tourism sectors. Singapore, Malaysia and India are among the frontrunners.
CHA advocates high quality patient health care by empowering physicians through governance, leadership and co-ownership of specialty hospitals.
It plans to build the American Specialty Hospital, a P1 billion medical facility, in Cebu City. The hospital will be accredited by Joint Commission International and will honor medical insurance from Blue Cross and other certified medical insurance companies.
Dr. Philip Chua, CHA vice president for Far East operations, said the hospital will cater to medical tourism. A Filipino, Dr. Chua is a Cardiac Surgeon Emeritus from Munster, Indiana.
He believes the prospects for Philippine medical tourism are quite bright since medical procedures are expensive in the USA. He noted that open-heart surgery can cost up to $70,000 in the US but only $8,000 in the Philippines.
CHA is also encouraging Filipino physicians to invest in the American Specialty Hospital. Dr. Chua said a growing number of physicians based in the Visayas are about to become investors.
Dr. Joel Beltran, Director for Business Development of the Asian Hospital and Medical Center, believes medical tourism should get up to speed after three years since partner hospitals need the time to improve their services and facilities.
“World class standards in hospital care entail huge investments in terms of physical plant, technology, human resource and clinical quality unlike spas and alternative therapies and cosmetic tourism,” Dr. Beltran pointed out.
He noted that Philippine hospitals have not seen that much investment for several decades except for Asian Hospital, The Medical City and St. Luke’s Medical Center, which are among the few hospitals accredited for medical tourism by the DOH.
In Asian Hospital’s case, the foreign investor is Bumrungrad Hospital. Bumrungrad handles close to a million patients a year (40% foreigners) and earned $150 million in 2005. Its experience is helping Asian Hospital prepare for the coming boom in Philippine medical tourism.
“While we have several international patients and clients at this point, the focus is on preparing our internal processes and support for the medical tourism project,” said Dr. Beltran.
UST Hospital (USTH) is accredited by DoT to service medical tourists. Located in Manila, USTH has transformed 70 of its rooms into international hotel-class rooms for medical tourists.
USTH has also partnered with the National Association of Independent Travel Agencies in the Philippines, the country’s largest association of independent travel agencies, to offer medical tour packages.
The services offered by USTH to medical tourists include plastic and reconstructive surgery, ophthalmology and laparoscopic surgery (a less painful surgical procedure since small incisions are used).
Eye operations, for example, cost $700 to $3,000 depending on the type. Medical and travel insurance, however, are not yet included in USTH medical packages.
“We have been doing medical tourism in USTH long before the term was coined . . . In terms of expertise and capability, USTH has a lot to offer international patients,” said France Manto, USTH Marketing Communications Consultant.
Healthy hospitals
Besides improving infrastructure and facilities, accrediting hospitals to international standards is vital to the growth of Philippine medical tourism, said Dr. Reganit.
He said accreditation of healthcare facilities will be managed in 2007 by the Philippine Council on Accreditation of Healthcare Organizations (PCAHO). The Philippine Health Insurance Corporation (PhilHealth) currently handles accreditation of hospitals and medical facilities.
The accreditation process now being developed will take into account standards set by the Joint Commission International and the PhilHealth Benchbook, a set of standards that measure the quality of healthcare provided by accredited healthcare providers. It will also consider standards in the international retirement industry and the DoT.
Filipino physicians will also be accredited and Dr. Reganit will take charge of this process.
Dr. Reganit said DOH is consulting with the Philippine Medical Association (PMA) about the problematic issue of American and foreign doctors practicing in the Philippines. He noted, however, that PMA does not encourage foreign doctors working here but will allow them in as consultants.
“If there is a reciprocating agreement, that will be OK,” said Dr. Reganit. “The Medical Act of 1956 is being revised (to allow foreigners to practice in the Philippines) and there is a pending bill in the Batasang Pambansa to this effect.”
PMA is expected to soon issue guidelines about foreigners practicing in the Philippines. Dr. Reganit pointed out that Thailand does not allow foreign doctors to practice locally. If a foreigner wants to do so, he must take the medical board exam—which is only written in Thai.
As regards medical malpractice, these cases will be coursed through PMA and its National Medical Grievance System. Consultation, mediation and arbitration will be the template used to resolve medical malpractice cases, said Dr. Reganit.
Fusing all the facets of medical tourism into an organized whole will be a “roadmap” the government expects to finish in September. This roadmap will be the game plan for Philippine medical tourism, said Dr. Reganit, and will set short-, medium- and long-term goals.
Philippine leadership is not the immediate goal; competitiveness in Asia is. Thailand, Singapore, Malaysia and India have too much of a head start to be quickly overtaken.
The Philippines’ great edge over its rivals is its “competent, compassionate and caring physicians.” It’s still the best prescription for a robust and competitive medical tourism sector.
At least, that’s what the Philippines is counting on once its medical tourism program gets up to speed in about three years. Photos of dear old dad in a loud Hawaiian shirt toting the inevitable camera; of mom snapping up Philippine handicraft with her Visa and the kids pounding on their GameBoys might soon go the way of the buggy whip.
Replacing them will be images of dad in a floral hospital gown awaiting open-heart surgery; of mom staring at Photoshop images of her sexier figure after a tummy tuck and the kids searching Google for the coolest spas is the Philippines.
And whether they’re in Manila, Cebu or Mindanao, Mr. & Mrs. John Q. Public will get A-list medical care from skilled Filipino physicians (many U.S. trained) working at globally accredited medical facilities.
But best of all, they’ll save a ton of money in the process (up to 80%). Now, that’s good news for the heart.
Baby Boomers can look forward to this pleasant state-of-affairs when both the public and private sector finish polishing the many facets of the soon-to-gleam jewel called medical tourism.
Perks for investors is one of those facets. Accreditation of doctors and medical and wellness facilities are others.
Then there’s insurance portability, an advantage that should lure millions of foreigners covered by medical insurance such as Blue Shield and Blue Cross.
Grand visions
The government has grand visions for a medical tourism program that focuses on attracting Americans and North American “balikbayans” to these “Islands of Wellness”.
The health and wellness tourism industry posted worldwide revenues estimated at $40 billion in 2005 and is expected to grow 33% annually. Medical tourism, spas and alternative treatments and cosmetic tourism are service sectors comprising health and wellness tourism.
The government projects medical tourism as a billion dollar service sector by early the next decade. Medical tourism is also expected to put a brake on the massive exodus of nurses to other countries, and help reverse the sad trend of Filipino doctors becoming nurses just so they can find work in the USA and the UK.
It is widely defined as a health holiday that includes cost effective private medical care and tour packages (sightseeing, golf and shopping, for example). It also includes leisure and relaxation activities such as spa therapies to re-invigorate patients.
It’s a growing worldwide trend targeted mainly at citizens of wealthy nations such as the U.S. where soaring health insurance costs are making many medical procedures prohibitively expensive.
One in five tourists is an American and over 10% more Americans visited the Philippines in 2005 compared to 2004. Balikbayan arrivals were up almost 15% in the same period. The Department of Tourism (DoT) expects those growth rates to double this year.
Korea, Japan, Taiwan and Hong Kong are the four other top sources of foreign tourists who, as a whole, poured $2 billion into the Philippine economy last year.
The government initially expected to earn some $300 million from the first year of its much-hyped “Philippine Medical Tourism Program (PMTP)” and $1-2 billion a year for the next five years.
But these numbers have been scaled back a bit as the Philippines realizes it first needs to focus more attention on strategic measures such as getting foreigners to invest in world-class medical tourism infrastructure.
Dr. Paul Reganit, PMTP Project Manager for the Department of Health (DOH) and a Masters in Public Health from Harvard Medical School, said the government is now busy organizing its medical tourism effort and cutting the red tape affecting both medical tourists and medical tourism investors.
On stream is a four-phase plan to identify and accredit partner PMTP medical institutions throughout the Philippines. The first two phases (1A and 1B) will identify partners in Metro Manila while the remaining two phases will select partners outside Metro Manila and inspect partner facilities nationwide, including spas and retirement villages.
“After the full implementation of Phase 1, we should see some 125,000 medical tourists a year,” said Dr. Reganit.
He estimates these tourists could spend $125 million during their short (less than a week’s) stay in the Philippines. And that’s based on each tourist spending only $1,000 during his stay. He expects these numbers to jump with the completion of all four phases.
Investor perks
Dr. Reganit said the government is putting in place investor perks to help build the medical tourism sector. A Memorandum of Agreement between DOH and the Philippine Export Processing Zone Authority (PEZA) creating “Medical Tourism Special Economic Zones” is due to be signed this year.
The MOA offers incentives such as income tax holidays, special resident visas and incentives under the Build-Operate-Transfer Law.
Executive Order 226 or the Omnibus Investments Code also grants incentives to activities in the Investment Priorities Plan (IPP). The Board of Investments (BOI) has included health and wellness services in the IPP for 2005 and 2006 and is expected to extend these perks into 2007.
Ownership or management of hospitals is an investment area worth considering, said industry sources. Over half the Philippines’ healthcare expenditure comes from the private sector, a fact that illustrates the key importance of private hospitals in healthcare delivery.
While the Constitution does not allow foreigners full ownership of land, foreigners can enter into joint ventures or invest in existing medical facilities.
The former was the route taken by Cardiovascular Hospitals of America, LLC (CHA) and owner of a four-hospital system in the USA.
Bumrungrad Hospital, Thailand’s largest medical tourism facility, chose the latter alternative by taking control of the Asian Hospital and Medical Center in Alabang. Thailand is Asia’s leader in the medical and cosmetic tourism sectors. Singapore, Malaysia and India are among the frontrunners.
CHA advocates high quality patient health care by empowering physicians through governance, leadership and co-ownership of specialty hospitals.
It plans to build the American Specialty Hospital, a P1 billion medical facility, in Cebu City. The hospital will be accredited by Joint Commission International and will honor medical insurance from Blue Cross and other certified medical insurance companies.
Dr. Philip Chua, CHA vice president for Far East operations, said the hospital will cater to medical tourism. A Filipino, Dr. Chua is a Cardiac Surgeon Emeritus from Munster, Indiana.
He believes the prospects for Philippine medical tourism are quite bright since medical procedures are expensive in the USA. He noted that open-heart surgery can cost up to $70,000 in the US but only $8,000 in the Philippines.
CHA is also encouraging Filipino physicians to invest in the American Specialty Hospital. Dr. Chua said a growing number of physicians based in the Visayas are about to become investors.
Dr. Joel Beltran, Director for Business Development of the Asian Hospital and Medical Center, believes medical tourism should get up to speed after three years since partner hospitals need the time to improve their services and facilities.
“World class standards in hospital care entail huge investments in terms of physical plant, technology, human resource and clinical quality unlike spas and alternative therapies and cosmetic tourism,” Dr. Beltran pointed out.
He noted that Philippine hospitals have not seen that much investment for several decades except for Asian Hospital, The Medical City and St. Luke’s Medical Center, which are among the few hospitals accredited for medical tourism by the DOH.
In Asian Hospital’s case, the foreign investor is Bumrungrad Hospital. Bumrungrad handles close to a million patients a year (40% foreigners) and earned $150 million in 2005. Its experience is helping Asian Hospital prepare for the coming boom in Philippine medical tourism.
“While we have several international patients and clients at this point, the focus is on preparing our internal processes and support for the medical tourism project,” said Dr. Beltran.
UST Hospital (USTH) is accredited by DoT to service medical tourists. Located in Manila, USTH has transformed 70 of its rooms into international hotel-class rooms for medical tourists.
USTH has also partnered with the National Association of Independent Travel Agencies in the Philippines, the country’s largest association of independent travel agencies, to offer medical tour packages.
The services offered by USTH to medical tourists include plastic and reconstructive surgery, ophthalmology and laparoscopic surgery (a less painful surgical procedure since small incisions are used).
Eye operations, for example, cost $700 to $3,000 depending on the type. Medical and travel insurance, however, are not yet included in USTH medical packages.
“We have been doing medical tourism in USTH long before the term was coined . . . In terms of expertise and capability, USTH has a lot to offer international patients,” said France Manto, USTH Marketing Communications Consultant.
Healthy hospitals
Besides improving infrastructure and facilities, accrediting hospitals to international standards is vital to the growth of Philippine medical tourism, said Dr. Reganit.
He said accreditation of healthcare facilities will be managed in 2007 by the Philippine Council on Accreditation of Healthcare Organizations (PCAHO). The Philippine Health Insurance Corporation (PhilHealth) currently handles accreditation of hospitals and medical facilities.
The accreditation process now being developed will take into account standards set by the Joint Commission International and the PhilHealth Benchbook, a set of standards that measure the quality of healthcare provided by accredited healthcare providers. It will also consider standards in the international retirement industry and the DoT.
Filipino physicians will also be accredited and Dr. Reganit will take charge of this process.
Dr. Reganit said DOH is consulting with the Philippine Medical Association (PMA) about the problematic issue of American and foreign doctors practicing in the Philippines. He noted, however, that PMA does not encourage foreign doctors working here but will allow them in as consultants.
“If there is a reciprocating agreement, that will be OK,” said Dr. Reganit. “The Medical Act of 1956 is being revised (to allow foreigners to practice in the Philippines) and there is a pending bill in the Batasang Pambansa to this effect.”
PMA is expected to soon issue guidelines about foreigners practicing in the Philippines. Dr. Reganit pointed out that Thailand does not allow foreign doctors to practice locally. If a foreigner wants to do so, he must take the medical board exam—which is only written in Thai.
As regards medical malpractice, these cases will be coursed through PMA and its National Medical Grievance System. Consultation, mediation and arbitration will be the template used to resolve medical malpractice cases, said Dr. Reganit.
Fusing all the facets of medical tourism into an organized whole will be a “roadmap” the government expects to finish in September. This roadmap will be the game plan for Philippine medical tourism, said Dr. Reganit, and will set short-, medium- and long-term goals.
Philippine leadership is not the immediate goal; competitiveness in Asia is. Thailand, Singapore, Malaysia and India have too much of a head start to be quickly overtaken.
The Philippines’ great edge over its rivals is its “competent, compassionate and caring physicians.” It’s still the best prescription for a robust and competitive medical tourism sector.
Saturday, April 12, 2008
It’s Time for the Business of Creativity
You read and hear often enough about the Pinoy’s “world class” creativity: the jeepney, the Lunar Rover (or Moon Buggy), woodcarvings from Paete. And then there’s the truly world class creative furniture designs of Kenneth Cobonpue.
But “world class” creativity, while a feel good label, counts for next to nothing in a peso driven economy unless it earns money as a viable business. Banal or uncreative as this may sound, this reality leaves creative people and organizations with only two business models to choose from: the heroic but starving artist (unfortunately the dominant model)—or Kenneth Cobonpue.
Cobonpue of Cebu might be the icon of the successful creative person/entrepreneur the fledgling “Creative Industry in the Philippines” earnestly seeks to develop, and whose existence is a major force for growth in economies such as the United Kingdom, Hong Kong and Singapore.
The now world famous Cobonpue manages Interior Crafts of the Island, Inc., a family-owned furniture design and manufacturing company. Among Cobonpue’s more recent awards was the 2005 Design For Asia Award that he won in competition against 500 other entries.
His is a shining success story for Filipino creatives, and is the outstanding Filipino example of world-class design and creativity. “Brangelina” are two of his satisfied customers.
“Creativity or in economics/business terms the act of value-adding and, more importantly, value-creating provides a differentiating factor in the ability of the Philippines or a Philippine company to deliver a product or a service,” said Rhea Matute, Officer-in-Charge, Operations Group 1 for the Center for International Expositions and Missions (CITEM), and who is deeply involved in pushing creativity as a competitive weapon in the export market.
“Most especially, applied creativity de-commoditizes a product or service and elevates it where the creative input or content greatly determine its value. This enables Philippine companies to have a stronger hold on the market and reverses the relationship from a mere supplier to a business partner.”
She noted that for a creative country like the Philippines, there is tremendous potential for Philippine companies to use this creativity to carve out a niche in the global market instead of playing the game through somebody else’s rules.
“Creativity allows us to develop our own strategy, our own game in this globalized economy that maximizes the natural inclination of our human capital for creative expression. Especially in this fast changing world, it is ones ability to adapt, re-invent and capitalize on an opportunity that will spell success.”
Having the creative potential is only the beginning, however. The bigger challenge, she said, is developing the ability to harness creativity and use it in the operations of the company: be it developing products, services or a company’s competitive advantage, and managing creativity to truly reap its full economic benefits.
CITEM is one of the spearheads in advancing the Philippines’ “Creative Economy Agenda” through the Creative Industry Task Force. Its strategic partners in this push are the Cultural Center of the Philippines (CCP), the National Commission for Culture and the Arts (NCCA), the Department of Foreign Affairs (DFA) and The British Council.
Matute said the Creative Industry Task Force aims to harness the country’s creative talent and knowledge to fuel activity in the whole spectrum of the economy—from manufacturing to services.
“In doing so, the initiative brings the creativity of the Filipino to a new level, recognizing its value as an economic asset that enables differentiation of Philippine products and services in the global market. In the process, we enhance the country's international image and make our people even prouder of things Filipino.”
With the holding of the “1st Philippine Creative Industry Forum” in 2005, the government tacitly recognized the existence of the Creative Industry as an industry alongside others such as manufacturing and services. Held in September at the CCP, the forum was the first real effort to take a closer look at this nascent but vital industry. “Nurturing Creativity” was the conference theme.
The three-day event brought together representatives from countries that acknowledge the existence of, and benefit economically from, their creative industries with those from government and business. The speeches showed the wide gap between the Philippines and countries with recognized creative industries.
While foreign guests talked from experience and cited upbeat economic data to bolster their case for developing a creative industry, Filipinos outlined plans for nurturing a creative industry, and were in agreement that bold action must now be taken by the government to grow the vital industry.
Young or unborn?
CCP president Nestor Jardin said the creative industry “has been outpacing and outgrowing the rest of the industries in percentage growth” in the United Kingdom, the USA, Japan, Singapore, Hong Kong, Australia, Thailand, Malaysia and Vietnam. He cited Australia whose creative industry contributed “a staggering 13% to the GDP,” well above the Asian norm of about 5%.
He described the Philippines’ creative industry as “a young or perhaps an unborn sector of the Philippine economy.” He said the creative industry could be classified to include the Performing Arts; Visual Arts; Literature and Publishing; Architecture, Crafts and Design; Audiovisual and New Media; Cultural Heritage and Cultural Activities.
What defines the creative industry as a unique sector of the economy, he said, is that its collective outputs are products of human creativity “and because they are such, they are products with intellectual property rights.”
Jardin said an important challenge that must be surmounted is to formulate a workable national creative industry plan that will identify the gaps and propose policies, strategies and policy reforms and programs that would help develop and promote the creative industry.
He acknowledged, however, that the most important and most challenging problem is how to convince government leaders that the creative industry needs attention.
“In simple terms, we’re all ‘KSP’ or ‘Kulang sa pansin (unnoticed)’,” he said. “I’m tired of trying to convince them that arts and culture should be given more support because they are vital to the establishment of a national cultural consciousness that will define our cultural identity.
“Try explaining this to a DBM officer and halfway through your passionate dissertation, the official becomes fidgety and you begin to feel that you’re speaking to him in the Swahili language.”
Jardin, however, recognizes that economics is the language the government understands, and that the pioneering work of the United Kingdom in quantifying the economic impact of creativity has inspired creative industries everywhere to amass the economic data needed for investment and growth.
The UK: Creative Industry Leader
British Ambassador Peter Beckingham said that the United Kingdom today ‘boasts an economy based substantially on creativity.”
After four years of mapping or determining the extent of its creative industry, the UK found out this industry, surprisingly, had an economic value of P10.5 trillion (112 billion pounds sterling) and accounted for more than 5% of the UK’s GDP. Its exports were valued at P1.03 trillion.
“Perhaps the most significant figure of all,” said the Ambassador, “the rate of growth in these creative industries was more than twice that of the economy as a whole.”
He noted that one of the most interesting things about the creative industry is that they mostly tend to be small businesses. They also tend to want to come together “because they recognize they can feed off each other.”
The UK came to realize the immense value contributed by the creative industry because one man wanted to know what the creative sector was worth. In 1997, Chris Smith, then the new secretary of state for culture, wanted this information but was stymied because no statistics existed.
He went to work to answer this question, gathering government and business leaders and creating a task force to manage this complex undertaking. The data obtained by 2001 “surprised everybody,” said Beckingham.
Along the way, they crafted a definition of the creative industry that has come to be accepted almost universally: “Creative industries are those industries that have their origin in human creativity, skill and talent and that have a potential for wealth and job creation through the generation and exploitation of intellectual property.”
The data obtained two years later was more surprising because it showed creative industries accounting for 8.2% of gross value added in 2002, and had grown 8% from 1997 to 2000.
The UK had 122,000 creative businesses in 2002 that employed 1.9 million persons. Employment in creative industries grew by 3% annually compared to 1% for the entire British economy. And more telling was a report that creative industries are now more important to London’s economy than financial services, hardly surprising considering London’s eminent position as a center for culture and creativity.
The British define their creative industry as including advertising, architecture, art and antiques, markets, crafts, design, designer fashion, film and video, interactive leisure software, music, performing arts, publishing, software and computer services and radio.
The British realized, as the Philippines soon will, that the development of creative industries is a process that involves the government, government agencies, economists and the creative and cultural sector.
Mapping for success
They also discovered that “mapping” or providing the economic data that shows the current value of the creative economy, is absolutely vital to growing this industry. Although a complex task, mapping exposes the economic impact of creative industries and reveals the economic loss of not providing adequate protection for intellectual property rights.
Mapping has taken place throughout the UK for the past decade. It has given British cities and regions economic evidence of what the creative sector contributes and an understanding of its potential.
In 2001 also, the British decided to share their experience with creative industries with the rest of the world through a program called “Developing Creative Economies.” Six countries—including the Philippines as the final pilot—are involved in this program that also allows each country to develop its creative economy in a way that reflects its culture.
Each program is to run for five years.
The Philippines is now busy sourcing funds for the mapping project, said Matute. It is tapping the private industry to provide the bulk of this funding.
Hong Kong’s creative industry consists of 11 sectors and has been mapped, according to Prof. David Hui, director of the Center for Policy Research at the University of Hong Kong and a speaker at the forum.
Mapping showed that in 2001, Hong Kong’s creative industry contributed 3.8% of total GDP and had a value of P287.8 billion (HK$46 billion).
“We compared it to the other studies that were carried out by other countries and we found out that it’s actually close to our region like New Zealand, Australia and Singapore from the region of 2.8 to 5%,” he pointed out.
He said that, like the UK, Hong Kong discovered that creative industries grew faster than the general economy. Knowing the ups and downs of the industry, which mapping uncovers, allows Hong Kong to put in place policies that reduce the downs and enhance the ups.
Singapore’s creative strategies
Singapore in 2003 adopted the “Creative Industries Development Strategy” whose aim is to double the GDP contribution of creative industries from 3% to 6% by 2012. This three-pronged approach adopted the UK’s definition of a creative industry.
Baey Yam Keng, director, Creative Industries Singapore, said the first part of the strategy focuses on the arts, the second on design and the third on media.
The arts strategy seeks to integrate arts and culture development into Singapore’s economy, thereby unleashing the potential of Singapore’s creative cluster.
“We need to continue to invest in talent, content and infrastructure for the arts, and adopt a cluster development strategy,” he said.
The design strategy aims to develop excellence in design as a key driver in national competitiveness. The Design Singapore Council works very closely with schools and students “to cultivate the precision of design and include design as a creative learning tool in the curriculum in schools,” said Yam Keng.
Singapore’s media strategy hopes to develop Singapore into a global media city. One of the initiatives that advance this strategy is the “Asia Media Festival” that drew over 300,000 participants in 2004. This “Made by Singapore” approach also extends to producing content for new media and gaming
Most important, said Yam Keng, is that Singapore “must create the environment that allows such creativity to happen but also to uphold Asian values.”
Design – made in Holland
There are 46,100 designers in The Netherlands. Together they contribute P166.9 billion (2.6 billion Euros) to the Dutch economy – in other words, 0.7% percent of The Netherlands’ GNP. In fact, the design industry accounts for a larger share of the economy than the Dutch oil industry or traditional sectors such as shipbuilding.
The figures quoted above stem from two studies carried out by Statistics Netherlands (CBS) and the Netherlands Organization for Applied Scientific Research (TNO) for the Premsela Foundation (which represents the Dutch design sector) and the Dutch Ministry of Education, Culture and Science. The purpose of the studies was to investigate the economic significance of design.
Subsectors
Almost 60% of all Dutch designers work in visual communication, a subsector of the design industry. That 60% is made up of 27,400 commercial artists, window dressers, ornamental painters, graphic designers, illustrators, quick-draw artists and advertising designers.
One out of three designers (13,900 persons) works in product design. This category consists of industrial designers, fashion designers, goldsmiths and silversmiths. It also includes flower arrangers, because their design skills also add value to a product. The third subsector, environmental design, accounts for 10% of all Dutch designers.
It is represented by 4,800 interior architects, garden designers and landscape architects. In summary: 59.4% of Dutch design professionals are involved in communication design, 30.2% in product design and 10.4% in environmental design. All in all, the number of people working in design is comparable to the number working in the insurance and pension industry (53,000 persons).
Design specialists
Seventy-two percent of all designers work in the service sector, 20% in industry and 8% in the non-profit sector. TNO’s report also distinguishes between different corporate categories.
The first category consists of the “design specialists”, which employ 16,900 designers or well over a third of the total. The design specialist sector is made up of companies such as advertising agencies and interior and fashion design houses, whose core activity is design.
Advertising agencies employ 14,000 designers and represent the largest group in the design specialist sector. The sector accounts for 24.5% or EUR 635 million of the EUR 2.6 billion that the Dutch design world contributes to the nation’s economy.
The second category consists of companies that employ a considerable number of designers. The include publishers, furniture manufacturers, service engineers for consumer items, firms of architects, consulting engineers and technical design and drafting firms and consultancies.
These companies employ 21,600 designers. In other words, one out of every two designers works in this category, which represents 35.6% of the design world’s economic value, or EUR 922 million.
Design pays
TNO’s report also concludes that design plays a key role in innovation. Fifty-eight percent of the companies that combine technical and design innovation say that innovation has a major impact on their competitiveness, as compared to only 47% of companies that do not do so. Design is therefore a significant competitive factor.
This is the first major survey of the Dutch design industry. Never before has its economic significance been analyzed in such detail. A follow-up report is scheduled to appear in 2010. Industry representatives have stated that their contribution to the Dutch economy should have increased to EUR 5 billion by then.
Creativity’s value to the EU
Europe has also taken pains to study its creative industries. According to the European Commission, Europe’s cultural sector contributed a staggering P42 trillion (EUR 654 billion) or 2.6% of the EU's GDP in 2003. In 2004, it employed some 5.8 million persons, which increased to 7.2 million last year and is on the uptrend.
Trends in the last decade show digital culture set to develop vigorously, thanks to the virtuous circle between culture and technology (multimedia, e-commerce, telecommunications). While the sector will act as an important employment booster, challenges involving education and training still need to be faced.
The Philippine: leading with design
As for the Philippines, the bottom line in developing a creative industry “is the creation of jobs and livelihood as a poverty alleviation method,” said Zorayda Alonzo, undersecretary of the Department of Trade and Industry.
“We have to nurture key industries that make up the Philippine creative economy by directing investments, programs and policies towards the development of the infrastructure, both hard and soft, and the environment that can stimulate the growth and international competitiveness of the creative industries,” she said.
She said that a strongly enforced intellectual property rights would protect Filipino creatives and their works.
Alonzo cited the inroads made in Europe by “Movement 8,” a creative alliance and design collective formed in September 99 by the late Eli Pinto Mansor of CITEM , together with design great Budji Layug , featuring Tes Pasola, Milo Naval, Renato Vidal, Carlo Cordaro, Tony Gonzales, Luisa Robinson, Ann Pamintuan and Kenneth Cobonpue.
Movement 8 is a prime example of design leading the successful transition from mere commodity exports to value-creating exports.
By focusing on the design and designer aspect of furniture and home accessories, the market began to appreciate Philippine products, its originality, and elevated the Philippines from just a production center to a developer of original design and original content. The Philippines became integral partners in the business and not just an element in the global supply chain.
The economic value of creative industries lies in the intellectual property it produces. Protecting intellectual property has become extremely important in the “copy and paste” environment facilitated by computers and the Internet. Making sure creatives have proper copyright protection in a digital environment is, therefore, vital if the industry is to profit and grow.
Stricter enforcement of copyright protection laws will immensely benefit the animation industry, which for years has been hyped as a shining example of Filipino creativity and business success. Revenues generated by the animation industry in 2005 rose 25% to $52 million (from $40 million in 2004).
The Animation Council of the Philippines, Inc. (ACPI), a national association of animation industry players and stakeholders, counts 35 member organizations. ACPI is working with the government to increase in the number of animators from the present 6,500 to 25,000 by 2010 to take advantage of vast global opportunities and erase the problems posed by the small number of Filipino animators.
The Philippines is known as a provider of high quality animation in contrast to rivals India and China, which are low cost providers. India’s animation industry generated $285 million in revenues in 2005; China earned $604 million.
Matute described animation as a major creative sector of the Philippines. She noted the Philippines has been a major producer of animation for the North American, European and Japanese markets since the 1980s, with major projects completed for Hanna Barbera, Disney, Warner Bros, Nelvana, Toei Japan and many other internationally recognized producers of animated features worldwide.
She said a sustained, strong track record and a reputation for creativity in animation—and the benefits of English proficiency, a western sense of humor, and varied cultural exposure—make Filipinos the preferred choice for the world's animation requirements.
She also pointed out that an emerging sector of the IT and IT-enabled industry is game development for the X-box, Play Station and other hardware makers. Anino games recently won an international award in Barcelona, Spain for the technical superiority of a game they developed.
CITEM’s vast experience in exports serves to confirm the immense value of creativity as a competitive advantage, said Matute. She noted that over the past years, from their conversations with foreign investors, Filipino entrepreneurs, manufacturers and exporters, and most especially the SME’s, it became more and more apparent the value that Filipinos bring to the market—the element that differentiates us from our neighbors and other nations in this global environment—is creativity.
“Creativity and spirit of innovation inherent in Filipino workers and professionals are the elements why investors come to the Philippines; why international buyers buy Philippine-made products despite being more expensive than other Asian countries; why there are Philippine engineers, architects, designers and other creative professional being hired from the Philippines and sent abroad to work; why back room operations and other creative work such as animation, software design and development are being outsourced to the Philippines.”
CITEM always emphasizes that its clients nurture this creative potential and always keep in mind the content value, be it product development for home style and living to fashion to food to e-services/BPO/KPO.
Business must play a key role
The Creative Industry, however, belongs to the private sector where the need to generate revenues trumps other considerations such as employment generation. One of the interesting findings revealed by mapping is that most creative businesses are micro-enterprises or small businesses with minimal employment.
Business can foster a culture of creativity by ingraining the quest for innovation and creativity their corporate cultures. This is a must not just in private enterprises, but most especially in the education sector because this is what creativity all boils down to—education.
There also needs to be a major change in the mindset of business and about work. Government and business have to treasure creative industries, understand and appreciate design and be willing to invest into creative people/designers.
“The better one understands the creative worker or what Richard Florida, a recognized expert in the Creative Economy and author of the Rise of the Creative Class, calls the ‘Creative Class,’ then it is more likely that businesses can develop an environment that will value their input, challenge them, have mechanisms for mobilizing resources around ideas and are receptive to both small challenges and the occasional big idea, or what Florida calls the ongoing movement of capital toward more effective mechanisms for harnessing human creativity,” Matute explained.
The challenge for business, therefore, is how to keep stoking and tapping the creative core of each human being. And since the Creative Class blurs the line differentiating work, life and leisure, it even becomes a challenge for communities and cities to develop and nurture the kind of experiences that reflect and reinforce their identities as creative people.
For the creative economy to flourish, however, it must not just depend on technology but on talent and tolerance, as well. Tolerance being defined as openness, and the acceptance of a diverse population and diverse ideas.
Needed: a Creative Industries Coalition
These insights mean that it makes sound business sense to band together Filipino creatives under the premise that their strength lies in unity. Creating a “Creative Industries Coalition” of individuals and organizations, private and government, local and abroad, as proposed by Henry Schumacher would be a giant leap in furthering the growth of the Philippines’ Creative Industry, and supporting the Creative Economy Agenda.
As Schumacher contends, it is necessary to focus on the design sector initially. A design environment be created that would allow design to thrive as a service industry in the Philippines. Initiatives will have to be undertaken to develop the next generation of Filipino creatives.
In this Knowledge Society, it’s a smart move to arm Filipino creatives with the knowledge of what’s out there in the realms of ideas, technology, trends, fashion, materials, methods and financing.
Material ConneXion is a leading knowledge base for information about new and innovative materials. It has libraries of innovative materials and provides information for the packaging, architectural, interior design and the apparel industries, among others.
New technology gives designers and companies’ new tools with which to play the game. It expands the capabilities of manufacturers and service providers, and enhances the delivery of the products and services. Technology must be viewed as a partner of creativity and competitiveness.
A Material ConneXion-type library has to be established in the Philippines for the use of the creative industry, especially those involved in furniture, furnishings and interior design.
These businesses have long been a source of Philippine export strength, especially in Europe, and the many exhibitions built around them such as Manila FAME International continue to be cash cows for the country. The increasing Philippine participation in European trade fairs is another reason for upgrading Filipino creativity.
Over 80 countries and thousands of buyers and guests flocked to the World Trade Center in Pasay City for the October edition of Manila FAME International 2006, which generated revenues of $57.3 million. Among the guests was George Beylerian, President of Material ConneXion, whose seminar was one of the highlights of the trade show. The next FAME will take place this April.
Excellent Philippine design was also visible at the just concluded furniture fairs, the Cebu International Furniture and Furnishings Exhibition or Cebu X 2007, and the Philippine International Furniture Show (PIFS) both held in late February.
The Cebu International Furniture and Furnishings Exhibition or Cebu X 2007 was held for the 18th time this February. Its organizers describe Cebu X as the “Design Destination in Asia” for retailers and wholesalers.
The show introduced world-class products and excellent booth presentations from participating companies from all over the Philippines. Last year, Cebu X took part in Macef 2006 in Milan.
Macef is the world's leading trade show for those who work in the table, kitchen and silverware, home decoration and textile, celebrations, gift, ceremony and stationery, jewellery and fashion accessories sectors.
PIFS, which exhibited some of the Philippines’ finest furniture, had as its special guest, Gaetano Pesce, an architect-artist-designer based in New York City. In more than 40 years of practice, Pesce has created an extensive body of work recognized for its emotive and tactile qualities, unrestrained use of color and insistence upon innovative building materials developed through new technologies.
It would also make sense to invite international designers to develop a top rate School of Arts and Design in the Philippines funded by the private sector. Creative laboratories will also have to be established. The government of Singapore is heavily involved in advancing that country’s design sector.
Mapping the Philippines’ Creative Industry, of course, is one of the first priority and an absolute necessity. But it still has to happen since funding is practically non-existent.
Jardin said mapping is, clearly, the basic step. “We need to undertake a creative industry mapping that will tell us where we are now, what our strengths and weaknesses are, what success stories we have that we can all learn from, how much we contribute to the GDP and GNP and to national employment,” he said.
Taken together, these initiatives will take the Philippines along the same road traveled by the UK, Singapore and Hong Kong—and will hopefully yield similar positive results.
In this day and age, a country that does not keep building or investing in its creative capital will fall behind in the race to improve its quality of life, said Matute
“And for a country like the Philippines to not recognize and appreciate the great opportunity that we have before us, and to not appreciate the potential that lies inherent in the Filipino, it will be like again losing another opportunity to develop this country to its full potential”.
Components of the Creative Industry in the Philippines*
* As defined by the UNESCO Framework for Cultural Statistics
But “world class” creativity, while a feel good label, counts for next to nothing in a peso driven economy unless it earns money as a viable business. Banal or uncreative as this may sound, this reality leaves creative people and organizations with only two business models to choose from: the heroic but starving artist (unfortunately the dominant model)—or Kenneth Cobonpue.
Cobonpue of Cebu might be the icon of the successful creative person/entrepreneur the fledgling “Creative Industry in the Philippines” earnestly seeks to develop, and whose existence is a major force for growth in economies such as the United Kingdom, Hong Kong and Singapore.
The now world famous Cobonpue manages Interior Crafts of the Island, Inc., a family-owned furniture design and manufacturing company. Among Cobonpue’s more recent awards was the 2005 Design For Asia Award that he won in competition against 500 other entries.
His is a shining success story for Filipino creatives, and is the outstanding Filipino example of world-class design and creativity. “Brangelina” are two of his satisfied customers.
“Creativity or in economics/business terms the act of value-adding and, more importantly, value-creating provides a differentiating factor in the ability of the Philippines or a Philippine company to deliver a product or a service,” said Rhea Matute, Officer-in-Charge, Operations Group 1 for the Center for International Expositions and Missions (CITEM), and who is deeply involved in pushing creativity as a competitive weapon in the export market.
“Most especially, applied creativity de-commoditizes a product or service and elevates it where the creative input or content greatly determine its value. This enables Philippine companies to have a stronger hold on the market and reverses the relationship from a mere supplier to a business partner.”
She noted that for a creative country like the Philippines, there is tremendous potential for Philippine companies to use this creativity to carve out a niche in the global market instead of playing the game through somebody else’s rules.
“Creativity allows us to develop our own strategy, our own game in this globalized economy that maximizes the natural inclination of our human capital for creative expression. Especially in this fast changing world, it is ones ability to adapt, re-invent and capitalize on an opportunity that will spell success.”
Having the creative potential is only the beginning, however. The bigger challenge, she said, is developing the ability to harness creativity and use it in the operations of the company: be it developing products, services or a company’s competitive advantage, and managing creativity to truly reap its full economic benefits.
CITEM is one of the spearheads in advancing the Philippines’ “Creative Economy Agenda” through the Creative Industry Task Force. Its strategic partners in this push are the Cultural Center of the Philippines (CCP), the National Commission for Culture and the Arts (NCCA), the Department of Foreign Affairs (DFA) and The British Council.
Matute said the Creative Industry Task Force aims to harness the country’s creative talent and knowledge to fuel activity in the whole spectrum of the economy—from manufacturing to services.
“In doing so, the initiative brings the creativity of the Filipino to a new level, recognizing its value as an economic asset that enables differentiation of Philippine products and services in the global market. In the process, we enhance the country's international image and make our people even prouder of things Filipino.”
With the holding of the “1st Philippine Creative Industry Forum” in 2005, the government tacitly recognized the existence of the Creative Industry as an industry alongside others such as manufacturing and services. Held in September at the CCP, the forum was the first real effort to take a closer look at this nascent but vital industry. “Nurturing Creativity” was the conference theme.
The three-day event brought together representatives from countries that acknowledge the existence of, and benefit economically from, their creative industries with those from government and business. The speeches showed the wide gap between the Philippines and countries with recognized creative industries.
While foreign guests talked from experience and cited upbeat economic data to bolster their case for developing a creative industry, Filipinos outlined plans for nurturing a creative industry, and were in agreement that bold action must now be taken by the government to grow the vital industry.
Young or unborn?
CCP president Nestor Jardin said the creative industry “has been outpacing and outgrowing the rest of the industries in percentage growth” in the United Kingdom, the USA, Japan, Singapore, Hong Kong, Australia, Thailand, Malaysia and Vietnam. He cited Australia whose creative industry contributed “a staggering 13% to the GDP,” well above the Asian norm of about 5%.
He described the Philippines’ creative industry as “a young or perhaps an unborn sector of the Philippine economy.” He said the creative industry could be classified to include the Performing Arts; Visual Arts; Literature and Publishing; Architecture, Crafts and Design; Audiovisual and New Media; Cultural Heritage and Cultural Activities.
What defines the creative industry as a unique sector of the economy, he said, is that its collective outputs are products of human creativity “and because they are such, they are products with intellectual property rights.”
Jardin said an important challenge that must be surmounted is to formulate a workable national creative industry plan that will identify the gaps and propose policies, strategies and policy reforms and programs that would help develop and promote the creative industry.
He acknowledged, however, that the most important and most challenging problem is how to convince government leaders that the creative industry needs attention.
“In simple terms, we’re all ‘KSP’ or ‘Kulang sa pansin (unnoticed)’,” he said. “I’m tired of trying to convince them that arts and culture should be given more support because they are vital to the establishment of a national cultural consciousness that will define our cultural identity.
“Try explaining this to a DBM officer and halfway through your passionate dissertation, the official becomes fidgety and you begin to feel that you’re speaking to him in the Swahili language.”
Jardin, however, recognizes that economics is the language the government understands, and that the pioneering work of the United Kingdom in quantifying the economic impact of creativity has inspired creative industries everywhere to amass the economic data needed for investment and growth.
The UK: Creative Industry Leader
British Ambassador Peter Beckingham said that the United Kingdom today ‘boasts an economy based substantially on creativity.”
After four years of mapping or determining the extent of its creative industry, the UK found out this industry, surprisingly, had an economic value of P10.5 trillion (112 billion pounds sterling) and accounted for more than 5% of the UK’s GDP. Its exports were valued at P1.03 trillion.
“Perhaps the most significant figure of all,” said the Ambassador, “the rate of growth in these creative industries was more than twice that of the economy as a whole.”
He noted that one of the most interesting things about the creative industry is that they mostly tend to be small businesses. They also tend to want to come together “because they recognize they can feed off each other.”
The UK came to realize the immense value contributed by the creative industry because one man wanted to know what the creative sector was worth. In 1997, Chris Smith, then the new secretary of state for culture, wanted this information but was stymied because no statistics existed.
He went to work to answer this question, gathering government and business leaders and creating a task force to manage this complex undertaking. The data obtained by 2001 “surprised everybody,” said Beckingham.
Along the way, they crafted a definition of the creative industry that has come to be accepted almost universally: “Creative industries are those industries that have their origin in human creativity, skill and talent and that have a potential for wealth and job creation through the generation and exploitation of intellectual property.”
The data obtained two years later was more surprising because it showed creative industries accounting for 8.2% of gross value added in 2002, and had grown 8% from 1997 to 2000.
The UK had 122,000 creative businesses in 2002 that employed 1.9 million persons. Employment in creative industries grew by 3% annually compared to 1% for the entire British economy. And more telling was a report that creative industries are now more important to London’s economy than financial services, hardly surprising considering London’s eminent position as a center for culture and creativity.
The British define their creative industry as including advertising, architecture, art and antiques, markets, crafts, design, designer fashion, film and video, interactive leisure software, music, performing arts, publishing, software and computer services and radio.
The British realized, as the Philippines soon will, that the development of creative industries is a process that involves the government, government agencies, economists and the creative and cultural sector.
Mapping for success
They also discovered that “mapping” or providing the economic data that shows the current value of the creative economy, is absolutely vital to growing this industry. Although a complex task, mapping exposes the economic impact of creative industries and reveals the economic loss of not providing adequate protection for intellectual property rights.
Mapping has taken place throughout the UK for the past decade. It has given British cities and regions economic evidence of what the creative sector contributes and an understanding of its potential.
In 2001 also, the British decided to share their experience with creative industries with the rest of the world through a program called “Developing Creative Economies.” Six countries—including the Philippines as the final pilot—are involved in this program that also allows each country to develop its creative economy in a way that reflects its culture.
Each program is to run for five years.
The Philippines is now busy sourcing funds for the mapping project, said Matute. It is tapping the private industry to provide the bulk of this funding.
Hong Kong’s creative industry consists of 11 sectors and has been mapped, according to Prof. David Hui, director of the Center for Policy Research at the University of Hong Kong and a speaker at the forum.
Mapping showed that in 2001, Hong Kong’s creative industry contributed 3.8% of total GDP and had a value of P287.8 billion (HK$46 billion).
“We compared it to the other studies that were carried out by other countries and we found out that it’s actually close to our region like New Zealand, Australia and Singapore from the region of 2.8 to 5%,” he pointed out.
He said that, like the UK, Hong Kong discovered that creative industries grew faster than the general economy. Knowing the ups and downs of the industry, which mapping uncovers, allows Hong Kong to put in place policies that reduce the downs and enhance the ups.
Singapore’s creative strategies
Singapore in 2003 adopted the “Creative Industries Development Strategy” whose aim is to double the GDP contribution of creative industries from 3% to 6% by 2012. This three-pronged approach adopted the UK’s definition of a creative industry.
Baey Yam Keng, director, Creative Industries Singapore, said the first part of the strategy focuses on the arts, the second on design and the third on media.
The arts strategy seeks to integrate arts and culture development into Singapore’s economy, thereby unleashing the potential of Singapore’s creative cluster.
“We need to continue to invest in talent, content and infrastructure for the arts, and adopt a cluster development strategy,” he said.
The design strategy aims to develop excellence in design as a key driver in national competitiveness. The Design Singapore Council works very closely with schools and students “to cultivate the precision of design and include design as a creative learning tool in the curriculum in schools,” said Yam Keng.
Singapore’s media strategy hopes to develop Singapore into a global media city. One of the initiatives that advance this strategy is the “Asia Media Festival” that drew over 300,000 participants in 2004. This “Made by Singapore” approach also extends to producing content for new media and gaming
Most important, said Yam Keng, is that Singapore “must create the environment that allows such creativity to happen but also to uphold Asian values.”
Design – made in Holland
There are 46,100 designers in The Netherlands. Together they contribute P166.9 billion (2.6 billion Euros) to the Dutch economy – in other words, 0.7% percent of The Netherlands’ GNP. In fact, the design industry accounts for a larger share of the economy than the Dutch oil industry or traditional sectors such as shipbuilding.
The figures quoted above stem from two studies carried out by Statistics Netherlands (CBS) and the Netherlands Organization for Applied Scientific Research (TNO) for the Premsela Foundation (which represents the Dutch design sector) and the Dutch Ministry of Education, Culture and Science. The purpose of the studies was to investigate the economic significance of design.
Subsectors
Almost 60% of all Dutch designers work in visual communication, a subsector of the design industry. That 60% is made up of 27,400 commercial artists, window dressers, ornamental painters, graphic designers, illustrators, quick-draw artists and advertising designers.
One out of three designers (13,900 persons) works in product design. This category consists of industrial designers, fashion designers, goldsmiths and silversmiths. It also includes flower arrangers, because their design skills also add value to a product. The third subsector, environmental design, accounts for 10% of all Dutch designers.
It is represented by 4,800 interior architects, garden designers and landscape architects. In summary: 59.4% of Dutch design professionals are involved in communication design, 30.2% in product design and 10.4% in environmental design. All in all, the number of people working in design is comparable to the number working in the insurance and pension industry (53,000 persons).
Design specialists
Seventy-two percent of all designers work in the service sector, 20% in industry and 8% in the non-profit sector. TNO’s report also distinguishes between different corporate categories.
The first category consists of the “design specialists”, which employ 16,900 designers or well over a third of the total. The design specialist sector is made up of companies such as advertising agencies and interior and fashion design houses, whose core activity is design.
Advertising agencies employ 14,000 designers and represent the largest group in the design specialist sector. The sector accounts for 24.5% or EUR 635 million of the EUR 2.6 billion that the Dutch design world contributes to the nation’s economy.
The second category consists of companies that employ a considerable number of designers. The include publishers, furniture manufacturers, service engineers for consumer items, firms of architects, consulting engineers and technical design and drafting firms and consultancies.
These companies employ 21,600 designers. In other words, one out of every two designers works in this category, which represents 35.6% of the design world’s economic value, or EUR 922 million.
Design pays
TNO’s report also concludes that design plays a key role in innovation. Fifty-eight percent of the companies that combine technical and design innovation say that innovation has a major impact on their competitiveness, as compared to only 47% of companies that do not do so. Design is therefore a significant competitive factor.
This is the first major survey of the Dutch design industry. Never before has its economic significance been analyzed in such detail. A follow-up report is scheduled to appear in 2010. Industry representatives have stated that their contribution to the Dutch economy should have increased to EUR 5 billion by then.
Creativity’s value to the EU
Europe has also taken pains to study its creative industries. According to the European Commission, Europe’s cultural sector contributed a staggering P42 trillion (EUR 654 billion) or 2.6% of the EU's GDP in 2003. In 2004, it employed some 5.8 million persons, which increased to 7.2 million last year and is on the uptrend.
Trends in the last decade show digital culture set to develop vigorously, thanks to the virtuous circle between culture and technology (multimedia, e-commerce, telecommunications). While the sector will act as an important employment booster, challenges involving education and training still need to be faced.
The Philippine: leading with design
As for the Philippines, the bottom line in developing a creative industry “is the creation of jobs and livelihood as a poverty alleviation method,” said Zorayda Alonzo, undersecretary of the Department of Trade and Industry.
“We have to nurture key industries that make up the Philippine creative economy by directing investments, programs and policies towards the development of the infrastructure, both hard and soft, and the environment that can stimulate the growth and international competitiveness of the creative industries,” she said.
She said that a strongly enforced intellectual property rights would protect Filipino creatives and their works.
Alonzo cited the inroads made in Europe by “Movement 8,” a creative alliance and design collective formed in September 99 by the late Eli Pinto Mansor of CITEM , together with design great Budji Layug , featuring Tes Pasola, Milo Naval, Renato Vidal, Carlo Cordaro, Tony Gonzales, Luisa Robinson, Ann Pamintuan and Kenneth Cobonpue.
Movement 8 is a prime example of design leading the successful transition from mere commodity exports to value-creating exports.
By focusing on the design and designer aspect of furniture and home accessories, the market began to appreciate Philippine products, its originality, and elevated the Philippines from just a production center to a developer of original design and original content. The Philippines became integral partners in the business and not just an element in the global supply chain.
The economic value of creative industries lies in the intellectual property it produces. Protecting intellectual property has become extremely important in the “copy and paste” environment facilitated by computers and the Internet. Making sure creatives have proper copyright protection in a digital environment is, therefore, vital if the industry is to profit and grow.
Stricter enforcement of copyright protection laws will immensely benefit the animation industry, which for years has been hyped as a shining example of Filipino creativity and business success. Revenues generated by the animation industry in 2005 rose 25% to $52 million (from $40 million in 2004).
The Animation Council of the Philippines, Inc. (ACPI), a national association of animation industry players and stakeholders, counts 35 member organizations. ACPI is working with the government to increase in the number of animators from the present 6,500 to 25,000 by 2010 to take advantage of vast global opportunities and erase the problems posed by the small number of Filipino animators.
The Philippines is known as a provider of high quality animation in contrast to rivals India and China, which are low cost providers. India’s animation industry generated $285 million in revenues in 2005; China earned $604 million.
Matute described animation as a major creative sector of the Philippines. She noted the Philippines has been a major producer of animation for the North American, European and Japanese markets since the 1980s, with major projects completed for Hanna Barbera, Disney, Warner Bros, Nelvana, Toei Japan and many other internationally recognized producers of animated features worldwide.
She said a sustained, strong track record and a reputation for creativity in animation—and the benefits of English proficiency, a western sense of humor, and varied cultural exposure—make Filipinos the preferred choice for the world's animation requirements.
She also pointed out that an emerging sector of the IT and IT-enabled industry is game development for the X-box, Play Station and other hardware makers. Anino games recently won an international award in Barcelona, Spain for the technical superiority of a game they developed.
CITEM’s vast experience in exports serves to confirm the immense value of creativity as a competitive advantage, said Matute. She noted that over the past years, from their conversations with foreign investors, Filipino entrepreneurs, manufacturers and exporters, and most especially the SME’s, it became more and more apparent the value that Filipinos bring to the market—the element that differentiates us from our neighbors and other nations in this global environment—is creativity.
“Creativity and spirit of innovation inherent in Filipino workers and professionals are the elements why investors come to the Philippines; why international buyers buy Philippine-made products despite being more expensive than other Asian countries; why there are Philippine engineers, architects, designers and other creative professional being hired from the Philippines and sent abroad to work; why back room operations and other creative work such as animation, software design and development are being outsourced to the Philippines.”
CITEM always emphasizes that its clients nurture this creative potential and always keep in mind the content value, be it product development for home style and living to fashion to food to e-services/BPO/KPO.
Business must play a key role
The Creative Industry, however, belongs to the private sector where the need to generate revenues trumps other considerations such as employment generation. One of the interesting findings revealed by mapping is that most creative businesses are micro-enterprises or small businesses with minimal employment.
Business can foster a culture of creativity by ingraining the quest for innovation and creativity their corporate cultures. This is a must not just in private enterprises, but most especially in the education sector because this is what creativity all boils down to—education.
There also needs to be a major change in the mindset of business and about work. Government and business have to treasure creative industries, understand and appreciate design and be willing to invest into creative people/designers.
“The better one understands the creative worker or what Richard Florida, a recognized expert in the Creative Economy and author of the Rise of the Creative Class, calls the ‘Creative Class,’ then it is more likely that businesses can develop an environment that will value their input, challenge them, have mechanisms for mobilizing resources around ideas and are receptive to both small challenges and the occasional big idea, or what Florida calls the ongoing movement of capital toward more effective mechanisms for harnessing human creativity,” Matute explained.
The challenge for business, therefore, is how to keep stoking and tapping the creative core of each human being. And since the Creative Class blurs the line differentiating work, life and leisure, it even becomes a challenge for communities and cities to develop and nurture the kind of experiences that reflect and reinforce their identities as creative people.
For the creative economy to flourish, however, it must not just depend on technology but on talent and tolerance, as well. Tolerance being defined as openness, and the acceptance of a diverse population and diverse ideas.
Needed: a Creative Industries Coalition
These insights mean that it makes sound business sense to band together Filipino creatives under the premise that their strength lies in unity. Creating a “Creative Industries Coalition” of individuals and organizations, private and government, local and abroad, as proposed by Henry Schumacher would be a giant leap in furthering the growth of the Philippines’ Creative Industry, and supporting the Creative Economy Agenda.
As Schumacher contends, it is necessary to focus on the design sector initially. A design environment be created that would allow design to thrive as a service industry in the Philippines. Initiatives will have to be undertaken to develop the next generation of Filipino creatives.
In this Knowledge Society, it’s a smart move to arm Filipino creatives with the knowledge of what’s out there in the realms of ideas, technology, trends, fashion, materials, methods and financing.
Material ConneXion is a leading knowledge base for information about new and innovative materials. It has libraries of innovative materials and provides information for the packaging, architectural, interior design and the apparel industries, among others.
New technology gives designers and companies’ new tools with which to play the game. It expands the capabilities of manufacturers and service providers, and enhances the delivery of the products and services. Technology must be viewed as a partner of creativity and competitiveness.
A Material ConneXion-type library has to be established in the Philippines for the use of the creative industry, especially those involved in furniture, furnishings and interior design.
These businesses have long been a source of Philippine export strength, especially in Europe, and the many exhibitions built around them such as Manila FAME International continue to be cash cows for the country. The increasing Philippine participation in European trade fairs is another reason for upgrading Filipino creativity.
Over 80 countries and thousands of buyers and guests flocked to the World Trade Center in Pasay City for the October edition of Manila FAME International 2006, which generated revenues of $57.3 million. Among the guests was George Beylerian, President of Material ConneXion, whose seminar was one of the highlights of the trade show. The next FAME will take place this April.
Excellent Philippine design was also visible at the just concluded furniture fairs, the Cebu International Furniture and Furnishings Exhibition or Cebu X 2007, and the Philippine International Furniture Show (PIFS) both held in late February.
The Cebu International Furniture and Furnishings Exhibition or Cebu X 2007 was held for the 18th time this February. Its organizers describe Cebu X as the “Design Destination in Asia” for retailers and wholesalers.
The show introduced world-class products and excellent booth presentations from participating companies from all over the Philippines. Last year, Cebu X took part in Macef 2006 in Milan.
Macef is the world's leading trade show for those who work in the table, kitchen and silverware, home decoration and textile, celebrations, gift, ceremony and stationery, jewellery and fashion accessories sectors.
PIFS, which exhibited some of the Philippines’ finest furniture, had as its special guest, Gaetano Pesce, an architect-artist-designer based in New York City. In more than 40 years of practice, Pesce has created an extensive body of work recognized for its emotive and tactile qualities, unrestrained use of color and insistence upon innovative building materials developed through new technologies.
It would also make sense to invite international designers to develop a top rate School of Arts and Design in the Philippines funded by the private sector. Creative laboratories will also have to be established. The government of Singapore is heavily involved in advancing that country’s design sector.
Mapping the Philippines’ Creative Industry, of course, is one of the first priority and an absolute necessity. But it still has to happen since funding is practically non-existent.
Jardin said mapping is, clearly, the basic step. “We need to undertake a creative industry mapping that will tell us where we are now, what our strengths and weaknesses are, what success stories we have that we can all learn from, how much we contribute to the GDP and GNP and to national employment,” he said.
Taken together, these initiatives will take the Philippines along the same road traveled by the UK, Singapore and Hong Kong—and will hopefully yield similar positive results.
In this day and age, a country that does not keep building or investing in its creative capital will fall behind in the race to improve its quality of life, said Matute
“And for a country like the Philippines to not recognize and appreciate the great opportunity that we have before us, and to not appreciate the potential that lies inherent in the Filipino, it will be like again losing another opportunity to develop this country to its full potential”.
Components of the Creative Industry in the Philippines*
- Performing Arts (Music, Theater, Dance, Performance Art and all their related products and services)
- Visual Arts (Painting, Sculpture, Photography, Video Art, Graphic Design, Installation Art and all their related products and services)
- Literature and Publishing (Books, Magazines, Newspapers, Periodicals, e-books, Print Advertising and other printed and electronic materials and services)
- Architecture, Crafts and Design (Architectural and Landscape Design, Fashion, Accessories, Furniture, Décor and other design products and services)
- Audiovisual and New Media (Film, Television, Video, Radio, Entertainment, Software, Internet Activity Sites, Electronic Media Advertising and other products and services)
* As defined by the UNESCO Framework for Cultural Statistics
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