Draft for discussion only

Infrastructure Development
Project Study in Batangas,
Philippines

[Draft for discussion only]

Contents

1 Introduction Page 3 – 6 4 Overview of Batangas Page 39 – 44

• Objectives of this document • Overview

2 Overview of Philippines
• Overview of the Philippines
• The Macro-economy
• Population
• Ranks
3 Sectoral Overview
• Advantages
• Infrastructure
Page 7 – 11
• Transportation
5 Project Overview Page 45 – 52
• Project Overview
• Summary for major projects
Page 12 – 38

• Trade 6 Project implementation Page 53 – 55

• Transportation • Considerations for project implementation
• Airport • Potential sources of fund
• Port
• Power
• Telecommunication
7 Profile of Company Page 56 – 57

2
 1
Introduction

3
Key objectives

✓ Batangas Free Trade Zone is an existing successful city planning. Based on this plan, further
supporting facilities including airport, freight port and transportation system will be advancing
the city’s macro development. Along with the Free Trade Zone, the infrastructure construction
and urban development all integrate into this long-term, wide-range and sustainable project.
✓ The project will benefit the economy, environment and equality (3E) through good planning:

Economy
➢ Increase income locally and contribute tax nationally
➢ The Batangas port itself is an important gateway to the south routes, it can also be
developed into a cruise port to increase growth of local tourism
➢ Stimulate trading with China, the second largest trading partner of the Philippines,
and reduce adverse balance of trade by exporting manufacturing products to China
➢ Deepen literal collaboration between both countries
Environment
➢ By attracting factories and companies from around Manila to the Free Trade Zone,
population and transportation pressure on Manila is dispersed
➢ Better access to industrial area and international gateways increases the efficiency
of logistics and transportation
Equality
➢ The long-term project continuously creates jobs and opportunities in all classes
from labor, skilled workers to high tech personnel and entrepreneur
➢ The rebuilt community and the highly developed urban area is going to raise the
living standard of local people

4
Project overview

Location
✓ An extension to the Batangas port on the coastal area of its both sides
✓ The proposed Free Trade Zone, airport and urban development area is 14km to the north of the port
and 22 km2 in area.
Project overview
✓ The Project combines the new city planning for the Batangas City located about 100km from Manila
into one package, and includes three main projects:

Free Trade Zone Infrastructure Urban Development

Industrial zones to Key infrastructure developments Highly developed

drive Batangas’ including power, water, urban area with high
economic growth telecommunication and living standard
transportation to support growth

5
Overview of this document

Overview
This document has been structured as follows to provide high-level overview of the infrastructure development in the Philippines and Batangas, as well as key
proposed project components.
✓ Overview of the Philippines – Overview of Philippines in terms of macro economy, population demographics and infrastructure development.
✓ Sectoral overview – High-level overview of related sectors in the Philippines on trade, land and air transport, port, power and telecommunication.
✓ Overview of Batangas – High-level overview of Batangas’ macro economy and infrastructure development.
✓ Project overview – High-level overview of proposed key components of the project.
✓ Company profile – Overview of the company

6
 2
Overview of
Philippines

7
The Philippines is a fast-growing country in South East Asia and is 13th most populated in the world

The Philippines, as one of the ASEAN countries, is one of the most dynamic economies in the The Philippines Luzon Philippine
Strait Sea
East Asia and the Pacific region. With increasing urbanization, a growing middle-income class, Cordillera
and a large and young population, the Philippines’ economic dynamism is rooted in strong Administrative
Region (or CAR)
consumer demand supported by improving real incomes and robust remittances.
Tuguegarao Cagayan
Vigan
Valley
The Philippines has an area of 300,000 sq.m. Ilagan

Key indicators and it is divided into three island groups:

Total area 300,000 sq.m. Luzon, Visayas and Mindanao. These are Central
Luzon
Baler
further divided into 17 regions, most
No. of islands 7,641 government offices are established by CALABARZON
Polillo Bicol
regions instead of provincial offices. Region
Population 105.9 million (2017) National Capitol Region (NCR) is the most
Manila
National Capital
Region (NCR) Mamburao Virac

Population density 353 people/sq.m. densely populated and economic-developed

region followed by the Calbarzon area of South Masbate

Capital City Manila which Batangas is part of. China Eastern

Visayas
Sea
Western
Total GDP US$313 billion (2017) Ranked as the 39th largest economy in the MIMAROPA Visayas Tacloban

world, the Philippines has an estimated GDP San Jose

Bago

Inflation 3.2% (2017)

of US$313 billion in 2017, and is expected to Surigao

Unemployment rate 5.7% (2017) continue to grow at 7% p.a. It is a newly Puerto

Princesa
Central Northern
Mindanao Caraga
industrialised country transitioning from Visayas

Inflation rate 3% (2017) agriculture to services and manufacturing. Sulu

Prosperidad

Sea
Services and manufacturing account for 60% Zamboanga
Peninsula
and 30% of total GDP in 2017 while Cotabato
Davao
agriculture accounts for 10%. Zambaonga
Digos

Davao
Region
Jolo
SOCCSKSARGEN
Muslim Mindanao
(or ARMM)
Celebes Sea
Source: Philippines Statistics Authority, IMF, Philippine Statistics Authority
8
The Philippines is projected to continue its high GDP growth rate of ~7% mainly driven by services
sector

Macroeconomic Overview GDP growth (%)

8%
Forecast
The Philippines is among the strongest growth countries in East Asia 8% 7% 7% 7% 7%
region, GDP growth in 2017 is at 6.7% and is forecasted to be at 6.7% - 7% 7% 7% 7%
7% 6% 6%
from 2018 to 2023. Strong exports is a major contribution to its economic
growth. 6% 5% 5% Ø 6%
5%
5% 4% 4%
Gross National Income per capita has been growing at 5% in the past 4% 4%
4% 3%
decade, and is expecting to grow at a higher rate at 7% in the next 5 years. 3%
The purchasing power along with the middle class segment growth is
2% 1%
expected to continue with the increase in GDP per capita.
1%
The Philippines’ economy is moving from agriculture sector to service 0%
oriented economy with an increase in contribution of service sector in the 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024
recent years.
Gross National Income per capita (USD) Forecast
GDP by sectors
100% +7% 4,410
12% 13% 12% 11% 11% 10% 10% Agricuture
+5% 3,510
33% 31% 31% 31% 31% 31% 31% Industry 2,953
+7% 2,592
1,941

1,052 1,093
55% 56% 57% 58% 57% 59% 60% Services

2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2010 2011 2012 2013 2014 2015 2016
Source: World Bank, IMF
9
The Philippines’ has a large population of 100+ million, with more than half of them living in rural areas

Population Overview Population (urban v.s. rural, million)

Forecast
The population of the Philippines has been steadily growing for the past decade from 84 million +2%
+2%
in 2005 to 104 million in 2017 at around 2% p.a. The population growth is expected to continue +2%
114 116 119
to be steady at around 2%. Majority of the population currently live in rural areas (56% in 2017) 103 105 107 110 112
and the urbanization rate is expected to reach 60% by 2050. 89 89 91 93 94 97 98 100 102
85 87
Population density in the Philippines Calabarzon area is the most densely populated 55% 56%
53% 54%
which consists of Batangas, Cavite, Laguna,
Quezon, Rizal and Lucena.
47% 46% 45% 44%
Work force

2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
Total workforce consists of 40.3 million
people, 62% of which are male. In terms of
Total Rural Urban
industries, around 56% of the total workforce
are in the service sector, 18% in industrial Population density by regions
sector, and 25% in agriculture. The
Population
unemployment rate is at 5.7% in 2017. Regions
Population Land Area
Density
(million) (sq.km.)
(persons/sq.km.)
Region IV-A – Calabarzon 14.4 16,576 870
Female 45% 23% 32% 25,067 National Capital Region (NCR) 12.9 620 20,785
Region III – Central Luzon 11.2 21,906 512
Male 75% 10% 15% 15,267 Region VII – Central Visayas 6.0 10,452 578
Region V – Bicol 5.8 18,114 320
Region I – Ilocos 5.0 12,965 388
Total 56% 18% 25% 39,931 Region XI – Davao 4.9 20,433 239
Region X – Northern Mindanao 4.7 20,459 229
Region XII – Soccsksargen 4.5 22,786 199
Services Industry Agriculture 100% Region VI – Western Visayas 4.5 2,773 351
Region VIII – Eastern Visayas 4.4 23,235 191
Source: Philippines Statistics Authority (Based on 2015 Census of Population), IMF, Philippine Statistics Authority
10
 Philippines ranks lower than its neighbours in terms of quality of infrastructure, however, infrastructure
is the one of the priority areas for government with increased budgetary allocations in recent years

Government’s budgeted infrastructure investment increased at a According to the latest survey in the World Economic Forum Global Competitiveness Report,
CAGR of 22% over the last three years and Infrastructure spending as Philippines ranks a very poor place 97th among 137 countries/regions, in the overall quality of
a percentage of GDP has increased from 2.2% in 2013 to 5.4% in 2017. infrastructure compared to other countries in East Asia.
Major portion of the allocation is for the road network.
Infrastructure outlays (billion pesos, % of GDP) The major gaps in the country’s infrastructure has been the accumulative result of years of
% of underinvestment and delays in implementing public capital expenditures, fiscal constraints,
2.2% 3.5% 4.3% 5.1% 5.4% and weak governance.
GDP
+22%
Philippines’ competitiveness ranking in infrastructure among other East Asia countries in 2018
+41% 861
756
576
Indicator Philippines Singapore Malaysia Thailand Indonesia Vietnam
404
288 GDP per capita (US$) 2,924.3 52,960.7 9360.5 5899.4 3604.3 2,173.3
Quality of roads 104 2 23 59 64 92
2013 2014 2015 2016 2017 Quality of railroad 91 4 14 72 30 59
Distribution of national infrastructure spending in the Philippines infrastructure
2017 Hospital and Health Centers Quality of port 114 2 20 63 72 82
Airport and Seaport
Irrigation Systems infrastructure
Flood control systems 3%
10% 1% Quality of air 124 1 21 39 51 103
1% infrastructure
Road network
41% Quality of electricity 92 3 36 57 86 90
School Buidings 16%
supply
Fixed telephone 88 27 71 91 104 96
connectivity
28% Mobile telephone 105 23 28 5 18 44
connectivity
Other Infrastructure
Source: Department of Budget and Management, World Economic Forum Source: Global Competitiveness Report 2017/18
11
 3
Sectoral
Overview

12
Sectoral Overview

1 Trade
2 Land Transportation
3 Airport
4 Port
5 Power

6 Telecommunication
13
 The strong trade performance is expected to continue to drive economic growth in the Philippines

The Philippines experienced a surge in trade activities in 2017 – exports of International trade value (USD million)

1 goods and services increased by 11% - continues to drive continued

economic growth as the main engine of the economy. The country’s strong
export performance was driven by a rebound in the exports of electronics +16%
components, which grew by 25% in 2017 in value terms.
+4%

2 Total value of imports increase with a CAGR of 16% over the past three
years while value of exports rise by 4% (CAGR). The trade activities are
expected to continue to grow with a growth rate at 7% p.a. in the coming
39
44
years. 33 31
29 27

3 In terms of value, electronics has the highest amount for both imports and
exports forming 53% of the total trade.
Exported goods in the Philippines by value 2015 2016 2017 2015 2016 2017
Imports Exports

4 30%
Electronic Components
Agricultural Products
Growth rates of import and export of goods and services (%)
25%

Ignition wiring sets 20% Import

Metal components Export
53%
5 1% 3%
3%
Coconut oil
Fishery Products
15%

10%
3% Other products
5%
6%

6 0%
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Source: Philippine Statistics Authority

14
 Electronic products, manufactured goods, machinery and transport equipment are the most traded
commodities by value in the Philippines, and U.S., Hong Kong, Japan and China are the largest
exporting partners.

Top ten major export trading partners of the Philippines by value in 2017
1 Top five export commodities in Philippines by value in 2017
(USD billion)
U.S. 4.9 (15%)
Hong Kong 4.8 (15%)
25% Japan 4.7 (14%)

2 50%
Electronic Products
Other Manufactured Goods
China
Singapore
Germany 1.4 (4%)
2.1 (7%)
4.0 (12%)

5% Machinery and Transport Equipment Thailand 1.3 (4%)

3% Ignition Wiring Set and Other Wiring Sets Netherlands 1.3 (4%)

3 3%
6%
Woodcrafts and Furniture
Chemicals and metal components
Taiwan
South Korea
Other countries
1.2 (4%)
1.2 (3%)
5.6 (17%)
7%
Other Exports
Top ten major import trading partners of the Philippines by value in 2017
4 Top five import commodities in Philippines by value in 2017 (USD billion)
China 10.0 (19%)
South Korea 5.3 (10%)
25% Electronic Products Japan 5.3 (10%)

5 33% Mineral Fuels, Lubricants and Related Materials

Transport and industrial Equipment
Thailand
U.S.
Singapore
3.7 (7%)
3.8 (7%)
3.0 (6%)
Industrial Machinery and Equipment Indonesia 3.0 (6%)
12% Iron and Steel Taiwan 2.7 (5%)

6
Malaysia 1.8 (4%)
6% Other Food and Live Animals
3% Vietnam 1.4 (3%)
Telecom equipment and manufacture products Other countries 11.8 (23%)
5% 17%
Other Imports
Source: Philippine Statistics Authority
15
Sectoral Overview

1 Trade
2 Land Transportation
3 Airport
4 Port
5 Power

6 Telecommunication
16
 Apart from new expressways, rail connectivity is a priority for the Philippines with the North-South rail
project

1 The transportation infrastructure system in the Philippines is relatively

underdeveloped due to its mountainous terrain and scattered island
geography. This is also due to the historical under-investment in
Railway
• The railway network consists of one commuter rail service provided by
infrastructure. In 2017, only 5.4% of national budget is planned for Philippines National Railways, and multiple mass rapid transit systems.
infrastructure development. It is estimated that the congestion leads to Philippine National Railways used to operate over 1,100 km (684 mi) of
2 PHP 2.4 billion in daily loss for Metro Manila due to road congestion.
Road transportation
route from La Union up to Bicol. However, continued neglect in past
decades has reduced PNR's efficiency and railroad coverage.
• The Philippines government is trying to revitalize and expand the
• There are 199,950 km of roads in length in the Philippines, with only 31,035 railway network with the North-South railway project.

3 km of roads paved. The road density in the Philippines is much lower than its
peers and more developed countries.
Km/sq.km. +1% • The North-South railway project
+2% comprises two components:
11 +1% 10 10 11 11
10 10 • A 653km (478km main line and
4 10 10
10 9 9 10 10 175km extensions) long-haul
9 passenger rail line from Tutuban,
National road density Manila, to Legazpi, Bicol, with
9
possible extensions from
8 Calamba, Laguna, to Batangas City
5 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

• There are currently 420km in length of expressways, and expected to

(58km) and from Legazpi, Albay,
to Matnog, Sorsogon (117km).
• The second component includes a
increase to 626 km by 2020.
56km commuter rail line for daily
• A US$616.5m new project announced in early 2018 to build the South-east
6 Metro Manila Expressway, Luzon Link Expressways.
riders on the Tutuban, Manila to
Calamba, Laguna route.

Source: Department of Public Works and Highways

17
Sectoral Overview

1 Trade
2 Land Transportation
3 Airport
4 Port
5 Power

6 Telecommunication
18
 Philippines air passenger traffic has been growing at a high rate of 9% CAGR over the last 10 years and
this growth is expected to continue with the project high GDP growth

Total Passenger Traffic (million) With strong economic outlook, growth in the Philippines’ international and
1 +9%
49.2
domestic aviation industries have been expanding rapidly in recent years. Total
passenger air traffic has increased significantly over the last 12 years from
50
42.0
45.2 20% 18.8 million in 2006 to almost 50 million in 2017, with a CAGR of 9%. On the
40 37.3 37.6 38.3 other hand, total cargo traffic fluctuated over the years but with an overall
34.5

2 30.9 15% increasing trend, reaching almost 660 million kg in 2017.

30 27.4
21.9 24.2
18.8 10% Air travel demand is expected to continue to grow as the economy develops
20
and disposable income rises. Given this growing demand, public and private
5%
10 entities are focused on upgrading, expanding and in some cases, replacing

3 0
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
0% current facilities. Philippines’ airport infrastructure sector growth, along with
Indonesia and Vietnam, will outperform the wider Asia region over the next
few years, driven by the government-led infrastructure development
Passenger Passenger growth initiatives.
Total Cargo Traffic (million)
4 700
+4%
632.1 658.9 30%
Regulation over airports and aviation in the Philippines lies within the Civil
Aviation Authority of the Philippines (CAAP). There are currently a total of 85
airports are owned by the national government, which are placed into one of
588.1 601.8 598.2 25% three categories under the CAAP’s classification system: 12 international
600
505.8 airports, 32 principal airports, and 41 community airports. Privately owned
500 452.9 434.5 428.8 480.3 465.8 20%

5 400
300
15%
10%
5%
aerodromes (airports, airstrips, airfields) are outside of the CAAP’s system.

200 0%
100 -5%

6 0
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
-10%

Cargo (kg) Cargo growth

Source: Philippines Civil Aeronautics Board, CAPA, BMI

19
 International passenger traffic has grown at 8% CAGR in the last ten years reaching 24.4 million traffic
in 2017, driven by surging economy and thriving tourism sector

International Passenger Traffic (million) The Philippines international aviation market has more than doubled over the
1 25 +8% 21.8
24.4
20%
past 12 years with passenger growing from 10.3 million in 2006 to 24.4 million
in 2017 with a 8% CAGR. The country’s emergence as a popular tourist
destination and surging economy have driven this rapid growth.
19.9
20 17.3 17.9
15.7 16.7 15%
Foreign national arrivals to Philippines increased by 8% CAGR between 2006
2
14.3
15 12.4 12.7 and 2017, indicating that the growth in tourism and number of Filipinos
10.3 11.5 10%
10 travelling abroad are rising at nearly identical rates. Foreign national visitors
account for slightly more than half of the total international passenger traffic.
5%
5 South Korea is the top origin country with 24% share to the total visitor
arrivals in 2017, followed by China (15%) and USA (14%).
3 0
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
0%
Filipino international travel demand is also expected to continue to grow as
the economy develops and disposable income rises.
Passenger Passenger growth

Foreign National Visitor Arrivals (million)

4 8 +8%
6.6
20%
Top 5 countries visitor arrivals in 2017 (thousand)

6.0 South Korea 1,608

15%
6 5.4
4.7 4.8

5
China 968
3.9 4.3 10%
4 3.5
2.8 3.1 3.1 3.0 USA 958
5%
2 Japan 584
0%

6
Australia 259
0 -5%
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Visitor arrivals Visitor arrivlas growth

Source: Philippines Civil Aeronautics Board, CAPA, Department of Trade & industry
20
 Growth in of domestic passenger traffic has moderated in recent years due to capacity constraints at
major airports

Domestic Passenger Traffic (million) The Philippines domestic market has tripled over the past 12 years, from 8.5
1 +10%
24.8
million passengers in 2006 to 24.8 million passengers in 2017. However,
passenger traffic had been relatively flat at slightly over 20 million from 2012
25 22.1 23.4 25% to 2014, before growth resumed in 2015 with 8% increase.
20.6 20.3 20.4
20 18.8 20% While the domestic market continues to grow, airport limitations in Manila
2 15
10 8.5
10.4
11.8
14.7
16.6
15% and secondary hubs are hampering the growth. The domestic market has
10% increased by 6% for the second consecutive year in 2017, but this growth has
been slower than GDP. Slot restrictions at the Ninoy Aquino International
5%
5 0%
Airport in Manila, where domestic flights are confined to the small Terminal 4
and portions of Terminal 2 and 3 is a major reason for the constrained growth.
3 0
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
-5%
Consequently, domestic traffic at Manila increased by only 2% in 2017,
whereas the total domestic market increased by 6%.
Passenger Passenger growth
Secondary airports like Cebu and Clark recorded robust growth in domestic
passenger traffic. Cebu, the second largest airport in Philippines, registered
4 8% growth in 2017, driven primarily by launch of point-to-point routes from
PAL and AirAsia. Clark, one of the fastest growing airports which is located
100km from central Manila, has experienced traffic growth but reached
capacity constraint.

5 With GDP expected to grow another 7% in 2018, demand for domestic air
travel will continue to rise as the economy and middle class expand.

6
Source: Philippines Civil Aeronautics Board, CAPA
21
 There are currently 12 international airports, with 2 additional international airports under
construction which will be operational by the end of 2018

International Airports in Philippines Philippines is an archipelago that comprises over 7,000 islands and air
1 12 International airports
transportation between islands is extremely important for connectivity. There
are currently a total of 85 airports owned by the national government in
Philippines.
2 International airports
Laoag under construction International airports are capable of handling international flights and have
2 Tuguegarao
14 Class 1 Principal
18 Class 2 Principal
border control facilities. There are currently 12 international airports with
scheduled passenger service in Philippines, of which 3 are in the Greater
41 Community Manila Area. Majority of passenger traffic goes through Ninoy Aquino
Clark International Airport, which is the country’s busiest airport and major hub.
Greater Manila Area
3 Subic Bay
Ninoy Aquino Naga Virac
Panglao Island International Airport and Bicol International Airport are
currently under construction and are expected to open in August and
December 2018 respectively.

Legazpi Principal airports serve domestic destinations and is further subdivided into
Bicol
2 types: Class-1 principal airports which are capable of serving jet aircraft
4 San Jose
Kalibo Roxas
Daniel Z. Romualdez
with a capacity of at least 100 seats; and Class-2 principal airports which are
capable of serving propeller aircraft with a capacity of at least 19 seats. There
are currently 14 Class-1 and 18 Class-2 airports.
Puerto Princesa Iloilo Mactan-Cebu Community airports are used mostly for general aviation purposes such as
5 Bacolod-Silay
Sibulan
Tagbilaran
Panglao
serving private jets, medical flights, flight training and agricultural aviation.
There are currently 41 community airports.
Bancasi
Dipolog
Laguindingan
6 Zamboanga
Pagadian
Francisco Bangoy
Awang
General Santos
Source: CAAP, Aviation Updates Philippines, CAPA
22
 Most major airports are congested with passenger traffic much higher than the capacity

Airport Passenger Traffic & Capacity While steps have been taking to meet increasing passenger demand through
1 Airports
Current maximum
passenger capacity
Passenger
traffic (2017)
Capacity
utilization
the introduction of low-cost carriers, existing facilities’ infrastructures have
come under strain. Philippines was ranked 124th in quality of air transport
infrastructure and trailed behind its ASEAN neighbours, indicating its
Ninoy Aquino 35,000,000 42,022,484 120% underinvestment in air infrastructure.
5,000,000 (13,000,000
2 Clark
Mactan-Cebu
after expansion)
12,000,000
1,514,531
10,050,940
30%
84%
To address this constraint, the government has launched major infrastructure
investment initiatives to support the construction of new airports and the
upgrading of existing ones.
Francisco Bangoy 2,000,000 4,234,667 212%
Puerto Princesa 2,000,000 1,790,115 90% One of them includes the Clark International Airport Expansion project. It
3 Iloilo
Laguindingan
1,600,000
1,600,000
2,023,016
1,776,353*
126%
111%
involves the construction of a new 82,600 m2 terminal, with a design capacity
of 8 million passengers per year and is expected to be completed by 2020.
Philippines is aiming to turn Clark International Airport, located north of
Bacolod-Silay 800,000 1,579,199 197% Manila, into the metropolitan region’s secondary airport.
Kalibo 700,000 2,711,036* 387%

4 *only 2016 data available

Quality of Air Transport Infrastructure

New international airports at Bicol and Panglao are also expected to improve
connectivity and reduce congestion.

(1 = extremely poor; 7 = extremely good)

Ranked 124th out of
5
6.9 6.6 6.6 6.6 6.3
137 countries
3 2.9 2.9
2.1
1.1

6 ...... ....
Lesotho
Yemen
Singapore

Nigeria
Finland

Congo

Philippines
Netherlands
UAE
Hong Kong

Source: Airport authorities, Public-Private Partnership Center, World Economic Forum, BCDA
23
 Government is considering alternate airport developments to divert traffic and decongest the Manila
airport

Ninoy Aquino International Airport Overview Ninoy Aquino International Airport (NAIA) is the gateway to Manila and the
1 Airport code IATA: MNL; ICAO: RPLL
largest airport in the Philippines. Hosting domestic, regional and international
passenger and cargo services for over 20 airlines, NAIA is a hub for airlines
including Philippine Airlines, Cebu Pacific, PAL Express, AirAsia Zest and Cebgo.
City Manila
It has 4 Terminals that operate almost as independent airports.
Usage Public/Military
2 Operator Manila International Airport Authority
As demand for air travel grows rapidly, infrastructure constraints have limited
growth at Manila in recent years. Designed for a capacity of 35 million
passengers yearly, NAIA’s passenger traffic reached 42 million in 2017 and is
Runways 3,737m x 60m; 2,258m x 45m
projected to increase to around 46 million in 2018. As a result of over capacity
Flight movement (2017) 258,366 of 140% and congestion problem, the airport is prone to flight delays and
3 Passenger traffic (2017)
Maximum passenger capacity
42,022,484
35,000,000
consistently placed among the top 10 most delayed airports in the world.
NAIA was ranked 42nd out of 50 major international airports in terms of on-
time departure performance, with a 37.1% delay percentage in July 2018.
Capacity utilization 120%
In April 2018, the government approved a PHP735.6 billion (USD14 billion)
4 50
Passenger Traffic (million)
46 300
Flight Movement (thousand) greenfield international airport proposal from San Miguel Corporation, aimed
at complementing air traffic operations and easing severe congestion at NAIA.
40 42 249 258 258 262 The airport would be completed in 5 years and fully funded by San Miguel
235
40 34 37 Capacity through a BOT (build-operate-transfer) model under a 50-year concession with
23 = 35 200 97 103 109 112
the government.
5 30
20
16 17 19

21
21

21 23
100
93

143 152 155 149 150

Top 10 Most Delayed Airports (delay percentage)
57% 52%
10 18 19 48% 47% 43% 42% 42% 39%
0 0 37% 36%

6 2014 2015 2016 2017 2018

(annualised)
International
2014 2015

Domestic
2016 2017 2018
(annualised)

Jakarta Paris Barcelona Frankfurt Rome HK London Munich Manila Seoul

Source: Manila International Airport Authority, CAPA, FlightStats

24
Sectoral Overview

1 Trade
2 Land Transportation
3 Airport
4 Port
5 Power

6 Telecommunication
25
 The annual growth rate of Philippines’ Container throughput has been increased from 5% (2010-2014)
to 9% (2014-2017) and the high growth is expected to sustain with growing economy and consumption

Philippines’ Container Throughput Top 6 Commodities contributing to Philippines’s cargo throughput

1 (thousands TEU)

+5%
+9%
1st Metal Ores, Products
4th Cement
7,929 & Scrap
7,210 7,421
6,176 Fuel and By-products Grains
5,642 5,826
2nd 5th
2 5,087 5,315

Crude minerals Fruits, Vegetables &

3rd 6th Products

3
2010 2011 2012 2013 2014 2015 2016 2017
Accelerating CAGR of container throughput increased from +5% to Nearly half of cargo throughput is attributable to the top 2
+9% from 2010-14 to 2014-17. commodities: metal ores, fuels and their related products.
Philippines’ Cargo Throughput by Type of Cargo Philippines’ Cargo Throughput by domestic/foreign
(million metric tons) (million metric tons)
4 +6%
208 215
244 244
+6%
208 215
244 244
189 196 14% 13% 189 196
162 174 14% 13% 162 174 39% 38%
15% 14% 35% 38%
15% 37%

5 18% 56% 58% 40% 38%

61% 61% 40%
56% 58% 59%
54% 61% 62%
62% 63% 65% 62%
30% 60% 60%
28% 29% 27% 26% 25% 26% 29%

6
2010 2011 2012 2013 2014 2015 2016 2017 2010 2011 2012 2013 2014 2015 2016 2017
Breakbulk Bulk Containerized Domestic Foreign
Cargo throughput increased 6% per annum with bulk cargo (metal Ports pay an important role in domestic transportation which
ores, fuel etc.) accounting for ~60% of the volume accounts for ~38% of the port cargo volume
Source: CEIC, Philippines Ports Authority (PPA) & Cebu Port Authority (CPA), World Economic Forum 26
 There are total of 6 major ports in Philippines with Port of Manila handling majority of the container
volume in Philippines

Capacity and Type of terminal of Major Ports in the Philippines 2017

1 Ports
Container
Type of terminal
General Passenger Ro-Ro
Capacity
Container
Very Large Port Cargo / Cruise Vessels Traffic

2 Subic Bay
Medium Port
Small Port Port of Manila
(TEU p.a.)

Manila - Manila Int’l Container ✔ ✔ 2,500,000

Terminal (M.I.C.T.)

3 Batangas - Manila North Harbor

- Manila South Harbor
✔
✔
✔
✔
✔
✔
✔ 2,000,000
+1,200,000

Port of Batangas ✔ ✔ ✔ ✔ +350,000

4 Iloilo
Port of Subic

Port of Cebu
✔ ✔ ✔ 600,000

Cebu - Cebu International Port ✔ ✔ 580,000

✔ ✔ ✔ ✔
5 - Cebu Baseport (Domestic)

Davao Int’l Container Port ✔ ✔ ✔

n.a.

705,000

Port of Iloilo ✔ ✔ ✔ 550,000

6 Davao
Note: Ro-Ro Vessels is specially designed vessels for carrying trailers, cars and other rolling equipment, which is discharged through
the bow or stern ramps or both

Source: World Port Source, PPA, CPA, Subic Bay Metropolitan Authority 27
 Port of Manila’s utilization rate is close to reaching the capacity and alternative port development is
required to cope with increasing cargo volumes

Container Throughput Cargo Throughput Passenger Traffic

Manila International Container Terminal (MICT) (thousands TEU) (millions metric tons) (thousands person)

1 • MICT is managed by a publicly listed company,

International Container Terminal Services, Inc. for
2015 1,961 28

n.a.
management and operation since 1988. 2016 2,174 34
• MICT handles only international containers.

2
2017 2,276 37

Manila North Harbor (MNN)

• MNN is managed by Manila North Harbour Port Inc. 2015 1,137 22 1,226
since 2010. It has two terminals currently and mainly
handles the domestic containers.

3
2016 1,301 23 1,293
• MNN is also a major passenger terminal.
2017 1,424 24 1,263

Manila South Harbor (MNS)

• MNS is managed by Asian Terminals Inc. since 1992. It

4
2015 878 7 30
mainly handles international containers.
• MNS also has a cruise ship terminal. 2016 1,046 8 44

2017 1,108 9 59
Container Traffic in Port of Manila in 2017
5 MICT
Utilization Rate
(percent)
91%
Capacity / year
(TEU)
2,500,000
Source: PPA

Philippines Ports Authority is targeting to reach 80% yard utilization level for each
port to have enough room for optimum terminal efficiency and productivity. MICT

6 MNN

MNS 92%
71%

1,200,000
2,000,000 and MNS have already exceeded such aforementioned optimal utilization level.

Source: PPA 28
 With the proximity to Port of Manila and its overcapacity issue, Port of Batangas is highly
complementary to Port of Manila in relieving congestion issues in Metro Manila

1
Expansion Constraints Batangas as Alternative
Shifting some cargo to Batangas Container Terminal can
2 Metro Manila road facilities would not be able to handle the
increasing cargo volumes from the Port of Manila.
potentially reduce of more than 80,000 truck trips along
Metro Manila roads, relieving congestion problems.
Limited area available around the port would also limit the

3 Port of Manila
scale of any expansion to cater to increasing volumes.

4 2 hours drive

Port of Batangas
5
Expansion of Port of Manila to ease its overcapacity problem Expansion of Port of Batangas is required to cater to the
6 is discouraged. With government intervention, Port of
Batangas are highly likely developed as a sizable major port in
cargo traffic from Port of Manila to Port of Batangas as
more shippers opt to route commodities via Batangas
Southern Luzon to ease congestion in Metro Manila. instead of Manila.
Source: Public Information 29
 Upcoming expansion in Port of Batangas will strengthen its capability to handle international
containers and cargo, which could ease the overcapacity problem in Port of Manila

Expansion of Port of Batangas will further enlarge the container capacity

1 Phase III development

The expansion and upgrading aims at not
only doubling the port’s carrying inbound
and outbound cargo capacity, but also
2 ease or share in the load traffic in the Port
of Manila.
Location Brgy. Santa Clara, Batangas City The project involves the development of Batangas Port
11.49 hectares of land adjacent located Phase III
Operator Asian Terminals Inc.

3
east of the Batangas International Port
Commencement Year 1956 serving as logistics area and international
Site Area 150 hectares terminal.
Current Container Capacity +350,000 TEUs / year Phase IV development

4
Current Utilization Rate
Container Throughput
(thousands TEU)
Cargo Throughput
(millions metric tons)
69%
The project aims at enabling the port to
handle volume of foreign trade, which Batangas Port
Passenger Traffic Ro-Ro Traffic has CAGR of 7% to 10%, and make the Food Terminal
(thousands person) (thousands vehicle) operation of the port at par with
international standards. The Batangas Port

5 2015 71% 29% 188 55% 45% 23 7,067 546 The construction includes 2 container
terminal, 360m long of general cargo
berth, utilities, access road and other
Livelihood Center

2016 79% 21% 200 61% 39% 23 7,954 606 Batangas

ancillary facilities. These will be mainly be Seabang
used for foreign containerized cargo
6 2017 81% 19% 239

International Domestic
58% 42%

International Domestic
25 7,933 692
carried by ocean going vessels.

Source: Batangas Province

Source: PPA Note: The above illustration is for reference only, please refer to corresponding government
documents for the full development plan. 30
Sectoral Overview

1 Trade
2 Land Transportation
3 Airport
4 Port
5 Power

6 Telecommunication
31
 Installed power capacity grew significantly at 7% CAGR over the past 5 years, mainly driven by new coal
based power plants to cater to increased consumption

Electricity Sector Overview

1 The electricity generation capacity has grew continuously at 7% over the past
5 years, and the installed capacity reached 22,730 MW in 2017. The
Electricity generation capacity, 2004-2017 (MW)
25000

Philippines’ Government has committed to increase its power capacity by 20000

+0.1%

2 around 30% in the coming few years.

Along with the economic growth, the electricity demand continues to
increase at a faster rate at 5.8% over the past 5 years than in 2009-2013. The
15000

10000

peak demand reached 13,789 MW which is ~60% of installed capacity. 5000

3 0
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Coal Oil-Based Natural Gas Renewable Energy Demand

Capacity
Electricity Sales and
4 Consumption
94,370 GWh
Installed -22,730 MW
Dependable -20,515 MW
Electricity sales and consumption, 2004-2017 (GWh)
100000
Available -14,458 MW
80000

5 60000

Power Project Capacity 40000

Peak Demand
Committed - 6,511 MW 20000
13,789 MW
6 Indicative - 17,444 MW
0
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Source: Department of Energy Residential Commercial Industrial Others Own-Use System Loss
32
 Majority of the installed capacity is located in Luzon which also has the highest electricity demand

Electricity production capacity in grid and off-grid (MW) Major power plants locations
1 16,800
16,000
15,743 Major power plants

15,200

2
14,400
26.4% Luzon
13,600
4,156
12,800
12,000
11,200
Manila
3 10,400
9,600
8,800
21.9%
3,446 Batangas

8,000

4 7,200
6,400
5,600
16%
2,518
Visayas
4,800
4,000 3,425 3,559

5 3,200
2,400
35.7%
5,625
47.9%
1,640
21.3%
36.1%
1,284
25.5%
1,600 906
730
800 30.8% 38.5% Mindanao
1,370

6 0 1,054
LUZON VISAYAS MINDANAO
Coal Oil Based Natural Gas Renewable Energy

Source: Department of Energy

33
 Coal accounts for 50% of the total electricity generated and remains to be the main source of power
generation based on committed power plant capacity additions

2016 vs. 2017 Gross Power Generation by types (in GWh)

1 100,000
Committed Capacity in 2017 doubled those of 2016. Coal is still main source in 2017,
natural gas capacity does not change in 2017, however, renewable energy capacity in
2017 has four times growth than in 2016.
90,000
2016 vs. 2017 Summary of Committed and Indicative Power Projects (in MW)*
2 80,000
24% 23% Type of Committed Capacity Indicative Capacity
Power Plants 2016 2017 2016 2017
70,000
Coal 2,720 77% 5,190 80% 6,570 54% 6,660 38%
3 60,000 22% 22% Oil-Based 0 0% 46 1% 196 2% 450 3%
50,000
5% Natural Gas 650 18% 650 10% 2,050 17% 2,816 16%
6%
Renewable

4 40,000

30,000
Energy
Geothermal
158

43
4% 625

43
10% 3,260

80
27% 7,518

130
43%

48% 50% Hydro 63 439 1,071 2,738

5
20,000
Biomass 23 50 58 114
48%
10,000 Solar 29 93 1,054 3,260
Wind 0 0 997 1,275
0

6 Coal
2016Y

Oil-Based Natural Gas

2017Y

Renewable Energy
TOTAL 3,528 100% 6,511 100% 12,076 100% 17,444 100%

Note: Some values may not correspond to the 2017 Power Statistics and/or previous issuances due to rounding.
Source: Department of Energy
34
 In terms of power consumption per capita, Philippines is much lower than its peers in South East Asia
region

1 Electricity Sales and Consumption by consumer types (in MWh) Electric power consumption in 2014 (kWh per capita, latest available)
8,845

2 28% 28% 26%

4,596
3,927
2,540
1,411 699
19,626,457 19,600,604 18,028,994

3
Singapore Malaysia China Thailand Vietnam Philippines
Residential Commercial Industrial

• Philippines has a very low per-capita power consumptions compared

to its neighboring countries and the world average.

4 1%
991,390
9%
5,940,167
8%
5,436,991
Transmission
Systems
Others Own-Use by Loss • The Philippines transmission grids are prone to natural disasters.
5 power plants
• Most transmission infrastructure are aging without life extension
maintenance.
• Similar demand from residential, commercials and industrial
consumers

6
Source: Gross Domestic Product of the Philippines Highlights for 2017, Philippine Statistics Authority (PSA), Department of Energy
35
Sectoral Overview

1 Trade
2 Land Transportation
3 Airport
4 Port
5 Power

6 Telecommunication
36
 Mobile phone, fixed telephone and broadband subscriptions grew with a high CAGR at 5-7% in the
recent years

Mobile phone subscription number and penetration

1 The telecommunication industry in the Philippines has grown rapidly, in
recent years, the industry evolved from an inefficient public utility to a
sector with an improved competition, providing consumers lower cost of Million subscription
communication. 150 120%
120 127

2 Mobile phones have outnumbered landline phones in the Philippines. The 111 100%
94 102 103
Philippines, called the text message capital of the world, is the world leader 100 83 80%
in Short Messaging Service (SMS) with almost one billion daily messages. It 60%
has also emerged as one of the top off-shoring destinations for IT enabled
services (ITES). 50 40%

3 The telecommunication infrastructure are mainly funded, constructed,

owned and operated by private investors, as there is limited funding
0
2010 2011 2012 2013 2014 2015 2016
20%
0%

support from the Government. The telecom regulator is the National

Telecommunications Commissions. CAGR: 7% Mobile phone Penetration rate

4 The two largest telecom companies - the Philippine Long Distance

Telephone Company (PLDT) and Globe Telecom, Inc. (Globe) are leading in
Fixed telephone and broadband subscription (million)
3.5 3.5
3.8
the local telecommunications market. Both companies provide mobile and 3.1 3.1 2.9
3.2
landline telephone services as well as Internet broadband. Each holds a 2.6 2.6

5 public utility franchise granted by Congress in pursuant to Public Utilities 2.2

Act. Their foreign partners have invested substantial equity in the sector.

6 2011

CAGR: 5%
2012 2013 2014 2015

Fixedline Fixed broadband

37
 Despite growing subscriptions, the average internet speeds and smartphone penetration has been low
for Philippines compared to other developing and developed countries indicating a requirement for
upgradation

1 Average internet speed and ranking

Average Internet speeds (2017)

Smartphone penetration (%)

Ranked 44th out of

81% 81%
72% 72% 72% 70% 69% 69%
50 countries
Mobile Fixed

2
65%
60%
55% 52%
Rank Mbps Rank Mbps
41% 37%
33%
Vietnam 60 19 58 24 26% 23%

3 Kazakhastan

Kenya
64 17 53 26

Sweden

Greece

Brazil

Morocco
Switzerland

Portugal

Philippines
Russia
UAE

China
Canada

US

Nethelands

Thailand
South Korea

Vietnam
71 16 83 15

Taiwan
Mongolia 73 16 67 20

4 Nicaragua

Honduras
76

80
16

15
125

122
6

6
Mobile and fixed average internet speed in Philippines is low compared to
most countries as reflected in its ranking of 94 and 91 respectively.
Cambodia 83 14 99 11
5 Philippines 94 12 91 13
Smart phone penetration rate are also low at 23% compared to other
countries which might also be a result of slow internet speeds.
Srilanka 106 9 69 19
This indicates a requirement of upgradation of the existing telecommunication

6 Bangladesh 120 5 77 17 network (fixed and mobile) to provide high speed communication similar to
other countries.

Source: Ookla Gloal Index- 2017

38
 4
Overview of
Batangas

39
Batangas is strategically located south of Metro Manila

01
• Located in the CALABARZON region in Luzon
• Connected Cavite and Laguna to the north, Quezon to the
east and island of Mindoro to the south
• 100 Km from Batangas City to Manila through (STAR) Luzon
Location tollway

02
Manila
• Population: 2,694,335 in 2015
• GDP: 2316 billion Pesos in CALABARZON , account for 15% Batangas
of total GDP of the country
•
Statistics Competitiveness Index: Ranks 9 th in all 81 provinces

03
• Second largest international port in Philippines as well as
accessible roads that are well-connected to nearby
Visayas
markets.
• Public transportation services are readily available through
Transportation all kinds of vehicles
• Proposed new North-South railway go across the province.

Mindanao

04
• Agriculture: Remains an important source of food and income
• Oil & Gas industry: Shell refinery
• Manufacturing industry: Home to a number of industrial parks
and famous for fan knife
• Power Industry: meet up to 40% of the energy needs of the
Industries Luzon grid

40
Batangas has the natural advantage as a gateway to south of the country with the 2nd largest port and
strong ecosystem for industries

Natural resources

• Agriculture and fisheries

resources including coconut,
corn, vegetables, and mangoes
• Major tourist destination with
volcanos and lakes

• Located 100km from

• Home to a number of Manila
Industries

• Primary entry point for

Location
Industrial parks in the
CALABARZON region. goods from the
• Major refinery and southern part of the
second largest port country
after metro manila • Major passenger
gateway handling ~7
Mn p.a.
• Major Power generator
with combined capacity
of its plants adequate
to meet up to 40% of
the energy needs of
the Luzon grid

Power 41
Apart from tourism, Batangas is a major petro-chemical and manufacturing hub in Luzon
Agriculture
Agriculture remains an
important source of food and
income. Major crops include
coconut, corn, vegetables, and
mangoes.
Industries
Petrochemical complexes, the
country’s first power plants using
natural gas, metal fabrication
facilities and special economic
zones/ industrial estates are well
established in Batangas.
Batangas serves as free trade
zone and economic connection
and supported by geographical
advantages with its highly
developed port industry.
Manufacturing
Batangas’s manufacturing industry
covers food and beverage
manufacturing, industrial supply
and services, and other
manufacturing fields. World famous
fan knife, locally known as balisong,
is manufactured in the province.
Oil&Gas industry
Batangas province is also with
adequate fuel supply with Shell
refinery.
Tourism
Batangas is home to the well-
known Taal Volcano, one of the
Decade Volcanoes, and Taal
Heritage town. The province
also has numerous beaches
and diving spots.
43
Batangas is an electricity generation hub and can meet ~40% of the energy demands of Luzon

Power Supply

• Combined capacity of its plants can meet up to

40% of the energy needs of the Luzon grid

• The province houses three major power plants

that generate electricity for the Luzon grid, like
the 600 MW Calaca Coal Fired Power Plant, the
500 MW, 1000 MW, and 414 MW San Lorenzo-
Roads, Bridges and Flyover
Santa Rita-San Gabriel Combined Cycle Power
• The total lengths of asphalt paved roads are 97.123 km. Plant, and the 1251 MW Ilijan Power Plant.
• The 42-kilometer Southern Tagalog Access Road (STAR),
directly links the Batangas International Port to Metro
Manila, cutting travel time by 45 minutes.
• Future projects: Construction of the City Integrated
Transport Terminal in Brgy. Alangilan, along the Batangas Water Supply
Port Diversion Road; Construction of the Batangas Bay
Road –STAR Tollway Bypass Road • Water is supplied by the Batangas City Water
District (BCWD).
ROADS AND BRIDGES INVENTORY • Water supply capacity (1,353,000 cubic meters
per month on average) significantly surpasses
NATIONAL PROVINCIAL
demand (761,000 cubic meters per month on
ROADS(total length in km) 554.83 514.01 average).

BRIDGES( total no.) 148 144

43
Batangas is well connected to Metro Manila and other islands in the Philippines

Public Transportation Air Service

Public transportation services are readily available through
public utility buses, public utility jeepneys, privately owned cars,
vans, jeeps, and tricycles. For trips going to Metro Manila and
neighboring provinces, the commuters can avail the public utility
bus system.
Helicopters use the Batangas National High School ground, the Quezon
Memorial Stadium, the PPA facilities and the Camp General Miguel
Malvar (PNP Provincial Office Compound) in barangay Alangilan as
landing and take off areas.

Water Transportation Railway Transportation

• Batangas has 6 Government Ports and 27 Private Ports, which
promoted shipping transportation of 11 shipping lines. Batangas
International port was developed in order to efficiently
serve the neighboring island provinces and to further serve the
development potentials of the CALABARZON and MIMAROPA
Regions. The port also serves to supplement the facilities of the
Port of Manila.
The proposed North-South railway project would directly connect
Batangas to north and south of the Luzon island through rail.
The railway line comprises two components, including a 653km
(478km main line and 175km extensions) long-haul passenger rail
line from Tutuban, Manila, to Legazpi, Bicol, with possible extensions
from Calamba, Laguna, to Batangas City (58km) and from Legazpi,
Albay, to Matnog, Sorsogon (117km).

• The Batangas Container Terminal (BCT) of the Batangas

International Port is a major trading port outside Metro Manila
serving major industries in Southern Luzon. BCT handled over
85,000 twenty-foot equivalent units (TEUs) of international
containers from January to July 2016. In 2015 the terminal
handled 130,000 TEUs in 2015,28.9% of its actual capacity of
450,000 TEUs.

44
 5
Project
Overview

45
Batangas development project would have three major components

Free Trade Zone Infrastructure Urban Development

1 ✓ Chi-Phi Industry Park

2 ✓ International Container Terminal
3 ✓ Residential Area
✓ Logistics Park Extension ✓ Commercial Area
✓ Batangas Access Zone ✓ Batangas International Airport ✓ University
✓ Food Terminal ✓ Railway Connection to Manila ✓ Hotel and Resort
✓ Power Plant ✓ Golf Course
✓ Water Plant ✓ Primary and Tertiary education
✓ Sewage Plant ✓ Community services
✓ Telecommunications (BATMAN)

46
Batangas Access Zone development Overview - Free Trade Zone
Project description
• Comprises of both the east and west
sides of the Batangas International Port
with an approximately area of 300
hectares
• East side covers the area of Phase I of the
Batangas International Port up to the
Shell Refinery area in Tabangao, Batangas
City
• West side covers the area of Phase Ill of
the Batangas International Port up to the
Port of Bauan.
Strategy significance
• Boost the economic activities of the
province
• Create job opportunities
• Provide easy transportation of goods
and cargo
• Improve access to industrial and port
areas.
Proposed development
Batangas Access Zone-East
• Improvement of Bantagas Port Developemnt (Phase
IV)
• Libjo-Wawa-Sta. Clara Access Road
• Two bridges
Batangas Access Zone-west
• Two-Iane roads infrastructures
1) Batangas Port to Bauan Road
(approximately 6, 580meters)which will
pass through the Regional Food Terminal
Project
2) Batangas Access Zone Road (approximately
5, 700meters)which will traverse the
coastline of Batangas Bay
• Logistics Facilities for Warehouses
• Storage Yards
• Spaces for Rail
• Port
Estimated project cost:
• Docking Areas PHP 3663.3 million
• Hanging Train
47
Batangas Port Development Project - Phase III
Project description
• An alternative to South Harbor in
Manila and Subic Port in Zambales
• Involves the development of the 11.49
hectares of land adjacent located East
of the Batangas International Port
• Develop the property into a logistics
zone equipped with warehousing
capabilities and infrastructure to
support the passing of cargo
Strategy significance
• Doubling carrying inbound and
outbound cargo capacity
• Geographical advantages and free trade
zone
• Serves as investment channel and spur
economic growth
Proposed development
Location and Area
• Located at the west side of the Batangas
International Port
• Has a total land area of more or less 11.49 hectares
• Located in Bantangas City, which is the center for
transportation of goods and serves as strategic trading
point for all industries in the CALABARZON area
Project Facility
• Access and anchorage area
• foreign container cargo berths
• Ferry terminal
• Open stockyard for general cargo berth
• Access roads
• Terminal building
• Control Office
• Power Supply to container berth
• Berths area
• Dry docks
• And all other required port facilities
48
Batangas Port Development Project-Phase IV
Project description
• Construction of 2 container terminal and
360m long of general cargo berth
• Provide a long term solution to Batanga’s
transportation, shipping and trading
constraints, port facilities and service
expansion and upgradation
• Increasing trade and economic growth in the
CALABARZON Region
Strategy significance
• Access to eco-zones and industrial parks
• Robust economic growth with an
anticipated increase of traffic cargo or
volume
• Improved traffic management and
investment framework
Proposed development
Location and Area
• The Batangas International Port(BIP) is located in
Sta. Clara, Batangas City. Its Baseport is located 110
km. from Manila.
• Center for transportation of goods produced in the
hinterland, primarily in Batangas province and serves
as strategic trading point for all industries in the
CALABARZON area
Project Facility
• Access and anchorage area
• Additional navigation aids facilities around the
terminal areas
• Foreign container cargo berths
• Domestic containerized cargo berths
• Open stockyard for general cargo berth
• Access roads
• Terminal building
• Utility Supply
• Power Supply to container berth
49
Telecommunication Overview
Project description
• Create a network that connects all 3 cities
and 31 municipalities to the Provincial
Capitol through Fiber or wireless
connection, or the combination of both.
Strategy significance
• Network for the Province that is
efficient and affordable
• Interconnection of all LGUS,
government agencies and barangay
halls
• Strengthened partnership between the
Local Government and private sectors.
• Established environment that
encourages networking of services and
applications
Proposed development
Location and Area
• Be implemented throughout the Province
connecting all 3 cities and 31 municipalities to the
Provincial Capitol located in Batangas City
• A control center that will manage the network will
also be established
Project Facility
• Core Network
• IT Room to serve as Command Center
• Fiber optic installation
• Internet Connection from two(2)providers and/or
connection Cable Landing Station
• Hanging Train
• Antenna links for network connections
Total Requirement for the First Year: PHP
• Servers, switches, hubs, routers, and other
equipment to create the network 213 milion
Total OPEX for the Succeeding Years: PHP
80 million
50
Opportunity for International Airport
Project description
• Develop a new airport to address capacity
limitations and congestion faced by NAIA
• As part of a potential aerotropolis to drive
the urban development and integrate
with the proposed Free Trade Zone and
the existing port
Strategy significance
• Traffic divergence from current
overcapacity in NAIA
• Addressing future growth constraint of
air transport demand in the Philippines
• Developing multi-modal logistics
network comprising air and water via
port.
• Private participation to ease Govt’s
infrastructure burden
Proposed development
Location and Area
• Between Batangas City and Batangas Port – potential
integration for logistics e.g. cargo and passenger
flights
• Close proximity to NAIA would allow traffic to be
diverted to Batangas given congestion in NAIA
Project Facility
• Airport terminals catered for both international and
domestic demand
• Taxiways and runways based on the expected
passenger traffic volume
• Warehouses for cargo transport
• Efficient transportation network to connect airport
and other destinations for logistics
Estimated project cost:
PHP10-21 billion
51
Opportunity for Power Plant
Project description
• Develop power plant given generation
demand outlook and land size
• Leveraging on interconnection project
between Batangas and Mindoro
Strategy significance
• Leveraging on the power infrastructure
development and potential energy
demand outlook as reported by the
Philippines’ Department of Energy
Batangas-Mindoro Interconnection
Proposed development
Location and Area
• The Philippine Energy Plan 2017-2040 (PEP) has
identified an interconnection project between
Batangas and Mindoro
• Developing a power plant nearby to leverage on
interconnection point for transmission and
distribution
Project Facility
• Potential 300MW capacity, indicative based on
nearest ideal location for power plant i.e. Malaya
power plant of 300MW as identified by the PEP
• Oil-fired configuration is indicative given outlook of
energy generation from petroleum products to
grow significantly until 2040
Estimated project cost:
PHP16-21 billion
52
 6
Project
implementation

53
Support from the local Government and interest from potential partners in China can aid in successful
project implementation

Careful considerations on obtaining approvals from relevant authorities and selection of project delivery partners is crucial for successful implementation of the
projects.

✓ The project plan approval by the local government (Batangas Province) and all related
Regulatory approvals and departments is necessary.
support
✓ Support for the project and assistance from NEDA and the Office of President would aid in fast-
tracking the project

✓ National Development and Reform Commission (NDRC) of China, International Cooperation

Center (ICC) and The China Overseas Development Association (CODA) have shown interest in this
development plan and informed a number of state-owned enterprises with marvelous
Selection of project partners construction experience overseas. All these enterprises have expressed their intention in
participating the construction part of the project.
✓ The enterprises include China Merchants Group, China State Construction Engineering
Corporation, China Railway Engineering Corporation, China Power, China National Building
Material Group, etc.

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Investors for large scale project such as this would benefit from Government’s incentives and support
from infrastructure funds as potential sources of fund

Other than key approvals and project partners, successful implementation of the project also requires the appropriate level and source of funds to be made available,
especially for the project of this scale. Below are several options on potential sources of fund.

Obtain financial support from Leverage on existing

Government Potential infrastructure funds in China
sources of
✓ For a project of this scale, funding might ✓ Those related Chinese organizations such as
mainly come from the government and fund China Development Bank, Export-Import
national banks such as BDO and Land Bank. Bank of China, China Export & Credit
Gaining a tax reduction policy will be much Insurance Corporation, Silk Road Fund, etc.
helpful to sustain the future development. with approval from the Chinese government,
all tend to invest in the project.

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 7
Profile of
Company

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Profile

ArchiWay Investment Management Limited(Hong Kong)

is an execution company which set up for Batangas Economic Zone project. Share holders and founder included : Archipelago Philippine Ferries
Corporation ,Famous ferry and dock development company from the Philippines; Fund company; Synergy and some famous architecture
designers from Chinese mainland, Hong Kong and Australia. For this project, PricewaterhouseCoopers(PWC) reached an agreement with us to
be our strategic partner . Together with The International Cooperation Center (ICC) and The China Overseas Development Association are our
counselors.

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Remark:
1* The International Cooperation Center (ICC)

Established in 1993, the International Cooperation Center (ICC) of the National Development and Reform Commission (NDRC) is a government institution directly subordinate to NDRC.ICC is a participant of the NDRC
International Cooperation Joint Conference, a member of the National “Belt and Road Initiative” Leading Group Office, and an executor of Sino-European, Sino-Canadian, Sino-Australian and Sino-German inter-
governmental cooperation projects. In recent years, ICC has implemented major bilateral cooperation mechanisms of NDRC, and launched Sino-British, Sino-Zimbabwean and other international cooperation projects. It is
exploring multi-dimensional and in-depth modes of international cooperation and exchange, and in so doing constantlyincreased its global influence.

ICC has given full play to its talent pool and expertise in policy research by providing outstanding planning and consulting services to governments at all levels and enterprises at home and abroad,including projects in
Hainan, Quanzhou, Sanya, Quzhou, Linfen, Langfang and other regions. Committed to constructing advanced platforms for idea sharing and international dialogues, ICC has offered high-end leadership development
programs including ICC-Yale and ICC-Stanford.

2* The China Overseas Development Association

The China Overseas Development Association (formally known as China Industry Overseas Development and Planning Association) is a national non-profit social organization with corporate capacity duly approved by and
registered with the Ministry of Civil Affairs of the People’s Republic of China.Existing under the administration and direction of the NDRC(National Development& Reform Commission), the Association provides services for
Chinese enterprises’ overseas investments and developments. The Association has been actively implementing China’s “Going Abroad” strategy - serving as a bridge between the government and enterprises - to provide
comprehensive services to Chinese enterprises investing and development abroad.

Closely following national development blueprints, CODA takes the initiative in guiding Chinese enterprises to participate in national strategies such as the “Belt and Road” and International Production Capacity and
Investment Cooperation. On the one hand, it helps the government by collecting and reporting information about the overseas investment activities of businesses, and assisting with the organization of high-level talks and
project negotiation between countries; on the other hand, it helps businesses by reducing risks and problems they might encounter in their overseas investment.

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3* PricewaterhouseCoopers (PWC)

PwC China, Hong Kong and Macau work together on a collaborative basis, subject to local applicable laws. Collectively, we have over 600 partners and over 17,000 people in total.

PWC provide organisations with the professional service they need, wherever they may be located. Our highly qualified, experienced professionals listen to different points of view to help organisations solve their business
issues and identify and maximise the opportunities they seek. Our industry specialisation allows us to help co-create solutions with our clients for their sector of interest.

They are located in these cities: Beijing, Shanghai, Hong Kong, Shenyang, Tianjin, Dalian, Jinan, Qingdao, Zhengzhou, Xi’an, Nanjing, Hefei, Suzhou, Wuhan, Chengdu, Hangzhou, Ningbo, Chongqing, Changsha, Kunming,
Xiamen, Guangzhou, Shenzhen, Macau, Haikou.

4* Archipelago Philippine Ferries Corporation (APFC)

Archipelago Philippine Ferries Corporation (APFC) was founded to provide a vital maritime link between the Philippines’ 7,107 islands. Since its incorporation in 2002, it has become a trusted shipping company that owns
and operates the Philippines’ first and only catamaran Roll-on/Roll-off (RoRo) ferries, as well as modernized ports and terminals in the eastern and western Philippine sea route. In support of the government’s Strong
Republic Nautical Highway Project, and to facilitate the economical movement of people and goods, APFC offers safe, fast and convenient ferry service to the islands using state-of-the-art RoRo vessels. These new vessels
are the first ferries designed specifically for Philippine water conditions.

With its focus on ensuring its passengers’ safety, welfare and comfort, APFC embarked on an ambitious re-fleeting program in 2010. In a bold and unparalleled move, it partnered with Sea Transport Solutions of Australia,
the leading designer and builder of mid-speed Ropax/RoRo vessels built for freight vehicle transport along with passenger accommodations. This partnership brings to the Philippines, for the first time ever, 10 brand-new,
custom-crafted, cutting-edge Ropax vessels fitted with world-class amenities and fully compliant with international standards for lifesaving, firefighting, and damage-stability.

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Project Experience

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