The Philippines was first put on the map by Portuguese adventurer Magellan working for the Spanish throne on March 16, 1521. The Philippines had become a Spanish colony and was the first country to be named after a sovereign, Phillip II of Spain.1 Spanish rule had continued until 1898 when the Philippines had become an American colony following the Spanish-American War for the stately sum of $20 million. In 1942 during WWII, the Philippines had fallen under Japanese occupation and was liberated by American and Filipino forces under the leadership of General Douglas MacArthur in a fiercely contested battle that raged on between 1944 and 1945. The Philippines had attained its independence on July 4, 1946, and had a functioning democratic system.
2 The Philippines Archipelago consisted of 7,100 islands, covering an area of 299,735 square kilometers and was slightly larger than Arizona. The capital city of Manila was situated on the largest Philippine island of Luzon (see Exhibit 1). The Philippines had a gross domestic product (GDP) per capita of $3,400.3 The percentage of the population of the Philippines living below US$2 a day was 45.2 per cent in 2006.4
PHILIPPINE BUSINESS ENVIRONMENT
Research conducted in 2009 showed that the Philippines was ranked 140th for ease of doing business and 155th for starting a business, out of a total of 178 countries. It took on average 15 procedures and a total of 52 days to complete business startup procedures in the Philippines compared to six procedures and 44.2 days and 5.8 procedures and 13.4 days for the same process in Asia and Organisation for Economic Cooperation and Development (OECD) countries, respectively.5 The Philippines had the second lowest savings and investment as share of GDP ratio in Asia6 (see Exhibit 2).
PHILIPPINE FISHING INDUSTRY
The Philippines has total territorial waters of 2.2 million square kilometers, of which coastal waters comprise 266,000 square kilometers and coastal reef area (10 to 20 fathoms deep, where reef fishing takes place) comprise 27,000 square kilometers.7
In 2003, the Philippines ranked eighth among the top fish-producing countries in the world with its total production of 3.62 million metric tons of fish, crustaceans, mollusks and aquatic plants (including seaweed). The production constituted 2.5 per cent of the total world production of 146.27 million metric tons.8
The fishing industry’s contribution to the country’s GDP was 2.3 per cent and 4.2 per cent, at current and constant prices, respectively. The industry employed a total of 1,614,368 fishing operators nationwide,9 of which the artisanal fisheries sector accounted for 1,371,676.10 Artisanal fishing operations were typically family-based and used smaller craft. There were a total of 469,807 fishing boats in the Philippines, of which 292,180 were non-motorized and 177,627 were motorized.11 Fish was not only an important source of nutrition, but as fishing did not require landownership or special permits it was an employment of last resort for people who had no other means of subsistence.
MIA was established in Denmark in 1975 by wealthy businessman Hagen Nordstrom, who dedicated the NGO to his wife Mia and made fighting poverty his life’s work. (MIA stood for “beloved” in Danish.) MIA had initially focused solely on poverty-alleviating projects in Africa and had expanded its operations to Latin America and the Caribbean only in the early 1990s.
The grandson of Nordstrom, Gillis Nordstrom, had taken over as MIA chairman in 2004 on the eve of the Bander Aceh Tsunami of December 26, 2004, which devastated Southeast Asia and killed as many as 130,000 people.12 Nordstrom had taken initiative and redirected MIA to focus on disaster recovery and poverty alleviation projects in Southeast Asia.
MIA had established an office in Manila in January 2006, and the young Danish development economist Borje Petersen was hired to manage the MIA Philippines office. Petersen was paid a starting salary of $75,000 a year plus housing, slightly below average for a comparable development economist position. Petersen knew that MIA’s attention was focused on Indonesia and Malaysia, which had been the hardest hit by the tsunami, and was anxious to carve out a position for MIA Philippines by designing an exceptional project.
As the expansion into Asia was the pet project of MIA’s chairman, Petersen felt assured that funding would be easily appropriated and even expedited. Petersen knew that the average overseas posting for a development economist for MIA was two years and had quickly established contact with local and international stakeholders and set up numerous meetings with large development project counterparts such as the Asian Development Bank, the World Bank and the German development aid organization GFZ to get an expedited understanding of the Philippines and its unique needs.
Based on the initial research, Petersen had decided that, whereas an agricultural project would be feasible, it would take a long time to realize and the outcome could be complicated given the Philippines’ proneness to be hit by typhoons. Petersen’s research had revealed that small-scale aquaculture projects had been successfully implemented in the Philippines in the past. However, there were hardly any projects to speak of directed at artisanal fishing and picking up on the vested opportunity and his desire to deliver fast results and prove himself worthy of the task that MIA and its chairman demanded, he had chosen to design a project helping artisanal fishermen.
Petersen had researched the possibility of helping a fishing village close to Manila and the search for the ideal village had come to a successful ending when MIA’s driver, Vicente Tubo, had mentioned how some of his distant cousins fished for a living in a fishing village seven to nine hours by car from Manila. A factfinding mission to the village Barangay San Hagon was undertaken and the village was thus chosen as the beneficiary of MIA’s pilot project in the Philippines.
BARANGAY SAN HAGON
Barangay San Hagon boasted 125 households and had a resident population of
625. San Hagon lay on the south coast of Luzon, the largest island of the Philippines. The Barangay was the smallest administrative division in the Philippines and stemmed from the Spanish “Barrio.”13 Barangay San Hagon was administered by a local government unit (LGU) and consisted of seven Barangay council members and a chairman. The chairman of Barangay San Hagon was Rafael Buenaventura, age 59, who had held office for more than a decade. Fishing villages in the Philippines were very vulnerable to external risk, especially natural calamities such as typhoons, flooding and fish kills, which severely affected their financial situation.