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ABACA
(Musa textiles)

A Commodity Study

Presented to the Faculty of the


Department of Agricultural Business Management
College of Agriculture
Mindanao State University
Marawi City

In Partial Fulfilment
Of the Requirements for the Degree
Bachelor of Science in Agricultural Business Management

NASIBAH BAYABAO MACADATO

April 2016
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Table of Contents

INTRODUCTION
Background of Study .................................................................................................... 1
Significance of the Study.............................................................................................. 2
Objectives of the Study ................................................................................................ 3
Scope and Limitation of the Study ............................................................................... 4
CHAPTER II
THE INPUT SUBSYSTEM .............................................................................................. 5
Planting Time ............................................................................................................... 5
Methods of Planting .................................................................................................... 5
Shading Establishment ................................................................................................ 5
Materials Input ............................................................................................................. 6
Varieties ....................................................................................................................... 8
Fertilization Requirements ......................................................................................... 10
Land ........................................................................................................................... 13
Pest and Disease Control .......................................................................................... 14
Labour and Wages ..................................................................................................... 17
Technological Development ....................................................................................... 17
CHAPTER III
THE FARM / PRODUCTION SUBSYSTEM ................................................................. 19
Potential Intercrops in Abaca ..................................................................................... 20
Post-Harvest .............................................................................................................. 27
CHAPTER IV
THE PROCESSING SUBSYSTEM ............................................................................... 28
Processors ................................................................................................................. 31
Processed products ................................................................................................... 32
Technological Development ....................................................................................... 37
Abaca as Wellness product........................................................................................ 37
Abaca for Fashion ...................................................................................................... 38
Other Uses ................................................................................................................. 38
Competitive ................................................................................................................ 38
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CHAPTER V
THE MARKETING SUBSYSTEM ................................................................................. 39
Compatibility and Marketability of Abaca Fiber .......................................................... 39
Market Flow ............................................................................................................... 40
Abaca Farmers .......................................................................................................... 40
Grading and Baling Establishment ............................................................................. 42
Processors ................................................................................................................. 43
Existing Marketing Programs ..................................................................................... 44
Demand ..................................................................................................................... 46
Domestic Market................................................................................................. 50
Foreign Demand ................................................................................................. 52
Supply ........................................................................................................................ 54
Local Supply ....................................................................................................... 54
Foreign Supply ................................................................................................... 54
Rival Countries ........................................................................................................... 55
CHAPTER VI
THE SUPPORT SUBSYSTEM ..................................................................................... 57
Financial Services ...................................................................................................... 57
Non-Financial Services .............................................................................................. 59
CHAPTER VII
THE SWOT ANALYSIS ................................................................................................ 60
Input subsystem ......................................................................................................... 60
Farm / Production subsystem ................................................................................... 67
Processing subsystem .............................................................................................. 73
Marketing subsystem ................................................................................................ 78
Support subsystem ................................................................................................... 84
CONCLUSION AND RECOMMENDATION ................................................................. 88
REFERENCES .............................................................................................................. 93
APPENDICES ............................................................................................................... 95
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LIST OF TABLES

Table 1. Fertilizer recommendation for newly established plantations.

Table 2: Comparative Average Dealers' Prices of Fertilizers

Table 3. Tools and Equipment used in Abaca Plantations and Harvesting

Table 4: Herbicides and Insecticides

Table 5: Summary of Current Regional Daily Minimum Wage Rates in Non-Agriculture

Agriculture (In Pesos) As of March 16, 2016

Table 6: Potential Intercrops

Table 7: Area Planted/Harvested by Region (in Hectares)

Table 8: Volume of Production of Abaca by Region (in Metric Tons)

Table 9: Standard Grades of Hand-Stripped and Spindle Stripped

Table 10: History Local Demand of Abaca

Table 11: Abaca Value of Production by Region (Unit Million)

Table 12: Major importing countries (as of 2012)


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LIST OF FIGURES

Figure 1. Life cycle inventory in Abaca plantation establishment

Figure 2. Whole life cycle of Abaca

Figure 3: Production flow of Abaca

Figure 4: Area Planted/Harvested (in Hectares)

Figure 5: Volume of Production (Metric Tons)

Figure 6: Primary and Final Processor

Figure 7: Uses of Abaca

Figure 8: Abaca fiber production flow between tuxying and leaf sheaths

Figure 9: Abaca Flow of Products and Services

Figure 10: Value of Production (Unit Millions)

Figure 11: Market Flow of Abaca

Figure 12: Local Consumptions

Figure 13: Farm Gate Prices

Figure 14: Abaca export prices


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CHAPTER I
INTRODUCTION

Background of the Study


Abaca (Musa textiles) known internationally as Manila Hemp, is indigenous in the

Philippines. It is similar to banana, canton and pacol. However, it can be distinguished by

the formation and coloration as well as by the size and shape of its leaves, heart, trunk

and fruit. The roots of the plants are added externally - not becoming an essential part. It

arises from the corm lying between 15 to 25 cm below the surface of the soil. The leaves

are tapering, narrow and glossy-green with pointed end petioles. The trunk, heart and

fruit of the plant are smaller than those of banana and pacol. It height reaches an average

of 2.44 meters. The abaca fiber is extracted from the stalk of the plant, specifically from

the outer covering of the leaf sheath.

Abaca fiber is one of the sturdiest natural fiber. In fact, its quality is one major factor

that gives the commodity highly competitive among other natural hard fibers in any given

market. The fibers of abaca are utilized as raw materials in the pulp and paper, cordage

and twine, yarns and threads, and fibercraft business. This plant is mostly found in upland

areas and interior parts of the country.

It is considered the strongest of natural fibers being three times stronger than

cotton and two times stronger than sisal fibers. Abaca is far more resistant to salt water

decomposition than most of the vegetable fibers, making it suitable for rope and cordage

manufacture.

This commodity study is presented by NASIBAH B. MACADATO under the supervision of DR. NIDA A. ILUPA
a faculty member of the Department of Agribusiness Management, College of Agriculture, Mindanao State
University-Main Campus.
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Considering its prime qualities, abaca is also an excellent choice over other natural

fibers for producing thin papers of high porosity and high strength. Abaca can also

substitute for wood pulp in the manufacture of a general line of paper products, a usage

that could contribute immensely to the conservation of the world’s diminishing forest

resources.

Demand for abaca, particularly in pulp form has been increasing due to the growing

concern for environmental protection and forest conservation which provided more

opportunities for natural fibers, like abaca. It is expected that demand for abaca fiber,

particularly by local pulp processors will continue to expand as world demand for abaca

pulp continued to grow. Thus, a commodity system study is necessary to strengthen our

local abaca production.

Significance of the Study

And this study will inform the Filipino farmers about the potential of abaca and its

current status in the agribusiness industry. The input supplier will help to identify the

different varieties’ available that are suitable to their land and the different control

measures in solving their pest and diseases problem in Abaca. The farmer or producer

of abaca will know how many farmers are engaged in cultivating abaca plant and the

production of abaca per year. The processors and marketers of abaca will be aware if

there is an availability of latest technology and if there is a demand of processed products

in domestic and abroad they will be also aware if there is a presence of processors and

presence of world suppliers.

For the businessman, it will give them the possible entry points for future

investment in abaca which may boost the economy of the country. Lastly, it will help the
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government to study in determining which support are needed in boosting and spreading

for this commodity, they will also be inform if there is an sufficient active participants of

some government agencies. This will also serve as guide for further study in enhancing

the different approaches and strategies in reviving the abaca industry in different region,

this will help the future researcher to convince the farmers to venture in abaca production

and government support in terms of technical, financial and marketing assistance which

is necessary in maintaining our current stand in world market in abaca production.

The gap in abaca industry is there’s a need to know the socio-economic factors

that will serve as guide in the effective packaging, dissemination and use of proven

technologies.

Objectives of the Study

This study was made to present and analyse the status of abaca commodity

system with the end view of identifying investment and/or development entry points which

can hopefully guide prospective investor and/or development managers in the

implementation of viable projects and/or programs.

Specifically, this study aims to:

 To present and analyse the historical and recent developments affecting the abaca

commodity systems;

 To identify problems, weak points and barriers of abaca commodity systems;

 To identify investment opportunities of abaca commodity systems;

 To evaluate the structure, conduct and performance of the abaca commodity

system viable and;


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 To provide a better conclusion and recommendation of abaca commodity system.

Scope and Limitation of the Study

The study will focus on the five subsystem namely; input subsystem, farm or

production subsystem, processing subsystem, marketing subsystem and support

subsystem. The study also identified the key constraints and opportunities as well as the

dynamics of the supply and demand and identified the competitive advantage of the

actors playing in abaca industry to increase their productivity and profitability in terms of

production, value-adding and processing. Furthermore, the study will also conduct the

internal strength and weaknesses and the external opportunities and threats on the latest

information available.

Because of the researcher’s time constraint, there was no interview acted and

most of the data gathered are from the online articles and government institutions

websites like the Philippines Statistics Authority and the Philippines Fiber Industry

Development Authority. Some data presented are from published books, international

studies and case studies of different abaca companies of the Philippines. The researcher

started compiling data during the month of January to May of the year 2016, during the

second semester A.Y 2016.


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CHAPTER II
THE INPUT SUBSYSTEM

Materials for propagation should be chosen carefully. The source of seedpieces

must be from healthy or pest and disease free high yielding varieties. The sucker or whole

plant and the corm or rootstocks are the two types of planting material.

Planting Time

Planting is best done during the onset of the rainy season since dry periods can

stunt the normal growth and development of young plants.

Methods of Planting

The square method is commonly used in the Bicol region. In the square method,

hills are set apart in equal distances. If the farm is fully planted, plants should be spaced

at 2.5 x 2.5 meters apart with 1,600 hills accommodated in a hectare.

In the double row or avenue method, abaca are planted in two rows at about 1.5 x

1.5 meters apart with a distance of 2.5 meters from each set. Cash crops like peanut,

soybeans and others can be intercropped in this method.

In the Quincunx or triangle method, 1852 hills are planted in a hectare with hills

set at a distance of 2 x 2 meters.

Shading Establishment

Abaca farms were established for more than thirty (30) years, considered as

marginal land having a slope ranges from slightly rolling to hilly and planted with

Lagunoyon and Abuab variety. Abuab was the recommended variety of FIDA while
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Lagunoyon is a traditional variety in the area. Narra, dapdap, dita and tabgon are the

common shade trees found in the area. These shade trees like narra could improve soil

fertility of abaca farms being a leguminous tree. Narra and dapdap were considered the

best shade trees for abaca as they shed off leaves during rainy months to allow more

lights penetration and provide more shading during summer to maintain micro climate

suited for abaca. The farmers are starting to adopt coconut as shade trees to replace

trees heavily affected by typhoon.

Abaca plantations should be provided with shade trees to prevent excessive heat

from damaging the plants and serve as windbreaks since typhoons are frequent in the

Philippines. Permanent shade trees such as anii, dapdap, ipil-ipil and temporary shade

trees like katuray and madre de cacao are recommended. Shade trees provide and

maintain a favorable temperature for abaca. They also conserve soil moisture and prevent

weed growth to a certain degree.

Abaca is a shade-loving plant and grows vigorously under canopy of trees. Thus,

not much clearing or other disturbance was done to the ecosystem. Minimal soil

disturbance with almost zero tillage system and less intensive land preparation reduced

soil erosion of the abaca farms.

Materials Input

Material inputs included one hectare of land and 1,358 suckers as planting

materials (Figure 1). Trimmed branches of shade trees were used as fuel wood.

Sometimes, farmers do not use any fertilizer and pesticide. The establishment required

45 man-days for planting then 20 man-days for every weeding and under brushing which
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were practiced every four months until the first abaca harvesting at 18 months after

planting. A hectare of farm had only an average of 1,358 hills due to differences in slope

and density of shade trees. Farmers estimated to accumulate about 100 kg of weeds per

hectare during every under brushing/weeding. Corm oftentimes used as planting

materials since it is less bulky and will easily germinate. Can be harvested 18 months

after planting.

Figure 1. Life cycle inventory in Abaca plantation establishment

Source: Journal of Environmental Science and Management


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Figure 2. Whole life cycle of Abaca

Source: Journal of Environmental Science and Management

Varieties

There are about 200 abaca varieties/accessions widely planted in the different

parts of the country in Luzon, Visayas and Mindanao where the prevailing conditions suit

abaca production. These varieties are characterized and maintained in FIDA seedbanks

and experiment stations in Sorsogon (Luzon varieties), Leyte (Visayas varieties) and
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Davao City (Mindanao varieties). Same germplasm are kept in genebank collection of the

National Abaca Research Center in Leyte State University and Abaca Seedbank

Collection in the College of Forestry, University of the Philippines Los Baños (UPLB), forty

varieties are listed as follows;

Luzon varieties

1. Musa tex 50 (Lausigon x Maguindanao) 5. Tinawagan pula 8. Luno

2. Musa tex 51 (Itom x Lausigon 45) 6. Tinawagan puti 9. Socorro

3. Musa tex 52 (Itom x Lausigon 39) 7. Lausigon 10. Lagonoyon

4. Abuab

Visayas varieties

1. Inosa 5. Lagurhuan 9. Musa tex 80 (Linawaan x Linino) 13. Sogmin

2. Itisog 6. Linawaan 10. Musa tex 81 (Linawaan x Laylay 14.Soglin

3. Laguis 7. Laylay 11. Soglagur (Sogmin x Lagurhuan) 15. Sinamoro

4. Layahon 8. Minenonga 12. Tangongon-visayan. 16. Putian

Mindanao varieties

1. Bongolanon 2. Tangongon 3. Kutay-kutay 4. Putian-Jolo

5. Bontang (Bongolanon x Tangongon) 6. Tange 7. Kaunayan

8. Maguindanao 9. Puti 10. Igit 11. Kutay-kutay-Jolo

12. Maguino (Maguindanao x Inosa) 13. Pula 14. Parang


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Fertilization Requirements

Abaca, like other perennial crops, occupies the same land for several cropping

years. The same crop is harvested year after year resulting to the gradual removal of the

essential nutrients from the soil. When the supply of these nutrient elements are not

replenished, the soil gradually loses its fertility.

Abaca requires large amounts of nitrogen (N) and potassium (K) but less of

phosphorus (P). About 40 % of the ash from abaca fiber is potassium. Nitrogen greatly

improves its growth and suckering ability while Potassium increases the tensile strength

of its fiber.

And the amount of commercial fertilizer needed will be depend on the inherent

fertility of the soil. Thus, soil sampling is very much needed to assess the soil fertility.

Fertilization guide in a one hectare abaca plantation:

Table 1. Fertilizer recommendation for newly established plantations.


Period of Fertilizer Type of Fertilizer Grams per No. of
Application plant bags per
(grams) hectare
3 months after planting Ammonium Sulfate (21-0-0) 62.5 2

8 months after planting Ammonium Sulfate (21-0-0) 125 4

21 months after planting Complete Fertilizer (14-14-14) 187.5 6

TOTAL 375 12

For established plantations, annual application of 187.5 grams per hill or 12 bags

per hectare of complete fertilizer (14-14-14) every year is recommended. Fertilizer is

applied in split of equal doses annually. Fertilizer is applied in a ring one foot away from
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the base of the pseudostems, the area where the roots are shallow distance of 1 ½ feet

from the base.

Table 2: Comparative Average Dealers' Prices of Fertilizers,


September 2015 and October 2014-2015* (By Region [peso per sack of 50 kg’s])

* Based on PSA Weekly Cereals and Fertilizer Price Monitoring (WCFPM) covering 5 dealer-respondents per province

The monthly average price of Ammonium Sulfate is P593.90/sack was below last

month’s report by 0.74% and from last year’s quotation by 3.21%.

Prices in ten (10) regions declined from last month’s levels. MIMAROPA recorded

the biggest price reduction of 5.15% and Bicol region with the lowest price decrease of

0.07%. Price gains however, were noted in CAR (0.41%), Cagayan Valley (0.31%),

SOCCSKSARGEN (0.70%) and Caraga (0.36%). The price remained stable in

CALABARZON.
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In the Complete fertilizer, the average price of P1,179.75/sack was a drop of 0.58

percent from previous month’s level and by 0.87 percent from last year’s record. In ten

(10) regions, the prices of complete were cheaper than last month’s levels. Price cuts

ranged from a low of 0.06% in Eastern Visayas and as high as 6.76% in Ilocos. Price

remained constant at P1, 256.00/sack in CALABARZON.

Tools and Equipment

Table 3. Tools and Equipment used in Abaca Plantations and Harvesting

Farm Activity Equipment

The removal of dried leaves is necessary because they are


fire hazards in the plantation, they serve as favorable media
Cleaning and Mulching for fungal, bacterial and insect growth and they impede the
growth of suckers by limiting sunlight penetration thus,
making regular inspections and indexing difficult. The cut
leaves are laid on the space between hills and used as
mulching materials to preserve soil moisture and inhibit the
growth of weeds.
Weeds are not much of a problem in a well-established and
maintained abaca plantation. The tall plants shade the
Weed Control grounds such that weed growth is effectively checked or
minimized. However, if weeds are abundant, they can be
easily controlled manually or mechanically by handweeding,
plowing or underbrushing at 2 to 3 months interval or as
necessary.
In cleaning, the area surrounding the base of the stalk is
cleared of dried leaves, grasses and other weeds. Thinning
Cleaning of floaters and spindly suckers and cutting afflicted plants and
dead stalks are also done during cleaning

Topping is done by cutting the leaves of the stalk to be


Topping harvested. Topping is done with the use of a curved knife
fastened at the tip of a long pole and then cutting the leaves.
Topping is done to avoid inconvenience to the harvester and
minimize damage to the young and immature plants when the
stalk is toppled down.
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Tumbling, on the other hand, is done using a sharp tumbling


bolo. A smooth and slanting cut is made on the stalk about 5
Tumbling cm from the last leaf scar to prevent the accumulation of sap.
The topped stalks are then tumbled by cutting them close to
the ground with the direction of the cut portion inclined
towards the base.
Tuxying is the process of separating the primary fiber layer
from the secondary fiver layer of leafsheath. The tuxying knife
Tuxying is inserted between the layers and the entire length of the leaf
sheath is pulled off to completely separate the layers.
The traditional methods of stripping are by hand (hagotan)
and spindle stripping. A spindle stripped fiber tends to be
Stripping whiter and more lustrous than a corresponding grade of hand
stripped fiber. In terms of physical properties, the spindle
stripped fiber is superior to a hand stripped fiber. Another
method is by defibering scheme. This method is designed
specifically for pulp and paper production.
Source: Department of Agriculture

Land

Land clearing and preparation of the area will depend on the type of the soil, slope

and terrain, and kind of weed growing in the area.

In lowland areas, if the area is a newly opened, cut the unwanted trees after the

rainy seasons, but leaves some tress that serve as shade for new plants. And plow and

harrow the area to reduce weed population. And for the already cultivated areas,

underbrush the existing weed then plow and harrow the area to reduce weed population.

In Upland areas, if the area is a forested, cut unwanted trees but leave some that

serves as shade for new plants. And construct a contour line perpendicular to the slope

using an “A frame”. Use wood or bamboo sticks along the contour line to prevent soil

erosion and conserved the inherent fertility of the soil, the leguminous tree species can

also be used like madre de cacao or ipil-ipil along the contour. If it will grow taller than the

abaca plant, pruned the trees and let debris decompose to add organic matter to the soil.

Then plow the spaces along the contour to condition the soil and destroy growth of weeds.
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Pest and Disease Control

Some Major Pest and Their Control

 Brown Aphids (Pentalonia nigronervosa Coq.) directly feeds on the abaca plant

and acts as vector of bunchy top and mosaic diseases.

Control Measures: Spray with appropriate contact and systemic insecticides and

eradicate diseased plant.

 Root or Corm Weevil (Cosmopolites sordidus Germar) directly feed on corms.

Control Measures: Keep plantation clean and soak abaca seedpieces with the

recommend insecticide before planting. If there is eggs present, apply with 0.1%

dieldrin or aldrin. And apply granular fensulfothion at 3g per plant at the root zone

of the plants in a radius of from 45-50 cm aound the pseudostem base. Granular

carbofuran at 20 g/ha may also applied.

 Slug Caterpillar (Thosea sinesis Walker) feeds directly on leaves. Spray with

equally effective insecticides.

Control Measures: Hard pick and kill the larvae using protective gloves. Collect the

cocoons around the base of the plant and destroy them. Spray infected plant with

BHS or any available contact insecticide at 7 to 10-days interval.


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Some Major Diseases and Their Control

 Abaca Mosaic was caused by abaca mosaic potyvirus. This disease causes leaf

mottling found in the petiole, pseudostem, flower bracts and fruits including

formation of irregular, pale green or yellowish streaks on the leaves extending from

midrib to the leaf margin.

Control Measures: For new plantings, never use planting materials obtained from

a mosaic-infected plant since the virus is also present in the corm. Spray

insecticides to vector and infected plants including the surrounding weeds before

rouging and burning infested plants.

 Abaca Bunchy Top was caused by a persistent type of virus. It causes chlorotic

areas on young leaves, and the damage is characterized by stunted and bunchy

growth of the plant forming a rosette with bladeless leaves. The leaves become

stiff and brittle with tear along the margin, curled upward and dry.

Control Measures: Spray infected plants with insecticide to kill vectors, rouging and

burning of the diseased plants; kill infected plants by puncturing with sticks

previously dipped in herbices like Dicamba, Glyphosate or by apllying 2, 4-D amine

(2.5% active ingredients). Do not transport abaca, banana, and their relatives or

part of theses, and soils from infected areas to the localities or plantation where

the disease does not occur. If the disease breaks out in a plantation, enforce

roguing (Ocfemia, 1931)

 Bract Mosaic is another viral disease caused by a potyvirus similar to banana bract

virus (BBrMV). The disease is characterized by distinctive dark reddish brown


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mosaic patterns on the bracts of similar to those of Abaca Mosaic Disease (AMD).

Infected plants parts are chopped into pieces, sprayed with herbicide and buried.

Table 4: Herbicides and Insecticides

HERBICIDES

Common Name Approximately Cost


Trade Name

Dicamba ₱ 2,099. 95/gal


Dicamba

2, 4-D 606. 65/gal


2, 4-Damine

INSECTICIDES

Common Name Approximately Cost


Trade Name

Heptachlor ₱ 2,160.95/mL
Heptachlor, SPEX

Dieldrin 2,021.01/mL
Dieldrin

Chlordane 1,773.95/mL
Chlordane (Methanol)

EPN 1,299.17/mL
EPN SOLN

Glyphosate 1,549.29/mL
Glyphosate Solution

Carbofuran 2,064.48/mL
Carbofuran-3-Hydroxy

Fensulfothion 1,299.17/mL
Fensulfothion SOLN
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Labour and Wages

Table 5: Summary of Current Regional Daily Minimum Wage Rates in Non-


Agriculture, Agriculture (In Pesos) As of March 16, 2016*
WO No. NON-
REGION AGRICULTURE
DATE OF EFFECTIVITY AGRICULTURE
Non-
Plantation
Plantation
NCR a/ WO 19/April 4, 2015 P 444.00 - 481.00 P 444.00 P 444.00
255.00 -
CAR b/ WO 17/June 29, 2015 265.00 - 285.00 255.00 - 270.00
270.00
I c/ WO 17/July 19, 2015 227.00 - 253.00 233.00 227.00
235.00 -
II d/ WO 16/January 5, 2014 247.00 - 255.00 235.00 - 243.00
243.00
291.00 -
III e/ WO 19/January 1, 2016 306.00 - 357.00 279.00 - 311.00
327.00
267.00 -
IV-A f/ WO 16/May 1, 2014 267.00 - 362.50 267.00 - 317.50
337.50
225.00 -
IV-B g/ WO 07/July 3, 2015 217.00 - 285.00 225.00 - 235.00
235.00
WO 17/ December 25,
V h/ 248.00 - 265.00 248.00 248.00
2015
VI i/ WO 22/May 2, 2015 256.50 - 298.50 266.50 256.50
275.00 -
VII j/ WO19/October 10, 2015 295.00 - 353.00 275.00 - 335.00
335.00
VIII k/ WO 18/March 30, 2015 260.00 241.00 235.00
IX l/ WO 18/ June 10, 2013 280.00 255.00 235.00
291.00 -
X m/ WO 18/July 3, 2015 303.00 - 318.00 291.00 - 306.00
306.00
XI n/ WO 18/June 1, 2014 317.00 307.00 307.00
XII o/ WO 18/Aug. 1, 2014 275.00 257.00 257.00
XIII p/ WO 13/February 14, 2015 268.00 268.00 268.00
ARMM q/ WO 16/ Mar. 1, 2016 265.00 255.00 255.00
Source: National Wages and Productivity Commission
*Read Appendix E (Generate Income) for more information

Technological development

A 150-percent increase in disease-free abaca plantlets was recorded from tissue

culture technique while 114 kilograms of dried fibers per day are produced by a portable
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stripping machine introduced to abaca farmers. This was according to a team of

researchers led by Dr. Ruben M. Gapasin of the National Abaca Research Center

(NARC) as he presented the NARC-developed production and post-harvest technologies

during the recently concluded National Conference on Natural Fibers held at Dusit Thani

Hotel, Makati City. He explained that with tissue culture techniques, or the growing and

propagation of plant cells, tissues, and organs on an artificial medium under sterile and

controlled environment, 124,518 virus-free abaca plantlets were produced from 500

suckers. Tissue-cultured plantlets are pegged at P4.50 each while plantlets from

conventional breeding method sell at P8 to P10 apiece.

Equally important as production technology is that of post-harvest, where abaca

portable stripping machine was introduced but was poorly received by the farmers. NARC

attributed the slow adoption of fiber stripping mechanization to the farmers’

disinterest in existing stripping machine, a 700-kilogram fixed-type equipment worth

P150,000. The portable machine, however, weighs 93 kilograms including the 2.6 kW

(3.5 Hp) gas engine and can process 114 kilograms of dried fiber per day. This machine

requires 5 liters of gasoline for every 100 kilograms of dried fiber, records an average

fiber recovery of 1.67 percent, and costs P45,000.


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CHAPTER III

FARM/PRODUCTION SUBSYSTEM

Philippines is the world's largest producer of abaca fiber, accounting for about 85%

share of the global production in 2013. In the Philippines, abaca plants are cultivated

across 130 thousand hectares of land by over 90 thousand farmers. Abaca fiber is

primarily used as a raw material by end user industries such as pulp & paper, fiber craft,

cordage, etc. Abaca fiber consumption in Philippines is witnessing a continuous increase

among these end user industries due to widening applications of the fiber. Abaca fiber

market in Philippines is supported by various investor friendly initiatives taken by the

country's Fiber Industry Development Authority (FIDA), which is expected to further boost

the abaca fiber market in the coming years. Out of the total production, a significant

volume of abaca fiber is consumed within the Philippines and the rest is exported

worldwide, with the US, European countries and Japan being the major importers.

Figure 3: Production flow of Abaca

From the farmer, abaca is sold at an all-in scheme to the barangay assembler and

is then passed to the big scale assemblers located in Manay. From there, it is sold to the

processors of abaca line-products whose main consumers are the international and

domestic markets.
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The processors set no limit on the volume bought from the assemblers because of

the high demand on the processed fiber in domestic and international markets. This

increasing demand can be attributed to the discovery of other potential uses of abaca.

Based from statistics gathered from the Fiber Industry Development Authority

(FIDA), Region XI, almost 94% of the Philippine abaca production is exported while the

remaining 6% is used domestically.

Potential Intercrops in Abaca

Intercropping under abaca can provide additional income. The plants that can be

utilized under abaca are as follows:

Table 6: Potential Intercrops


For newly opened abaca plantation For old abaca plantation

 Mungbean  Pineapple

 Bushbean  Ginger

 Peanut  Taro

 Okra

 Millet

 Sweet Potato

 Mungbean
26

Advantages in planting intercrops under abaca is an additional income can be

derived from intercrop aside from the income earned from abaca. If legumes were planted

like mungbean, bushbean or peanut under abaca, fertility status of the soil will be

alleviated.

The area planted by region per hectares in abaca is lower compare to the previous

year (Please refer to Table 7). The top 3 most planted area are Eastern Visayas, Bicol

Region and Davao Region respectively. The Eastern Visayas who planted 44,952.46 is

decreasing to 31,601.00 but the Bicol Region and Davao Region are increasing their

planted area to 42,832.04 to 45,254.00 and 10,952.74 to 13,800.00. The Cagayan Valley,

Ilocos Region and CALABARZO is the top 3 most unplanted area in terms of Abaca, they

produced 0.00, 0.51 and 26.28 respectively.

Figure 4: Area Planted/Harvested (in Hectares)

139,000

138,000

137,000

136,000

135,000

134,000

133,000

132,000
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Series 1 135,966 135,883 136,049 137,570 135,081 135,090 138,991 138,523 138,369 134,773

Source: Philippine Statistics Authority (Country Stat)


27

Table 7: Area Planted/Harvested by Region (in Hectares)


2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

PHILIPPINES 135,965.66 135,883. 136,048. 137,519. 135,081. 135,089. 138,990. 138,523. 138,369. 134,773.
28 73 69 37 83 96 46 35 35

CAR 800.00 800.00 600.00 870.00 870.00 579.00 579.00 550.00 499.00 481.00
ILOCOS REGION 0.50 0.50 .. .. .. .. .. .. .. ..
CAGAYAN VALLEY .. .. .. .. .. .. .. .. .. ..
CENTRAL LUZON 233.94 434.00 480.00 508.00 510.00 520.00 529.00 534.00 543.00 600.00
CALABARZON 26.28 109.00 199.10 294.23 250.17 250.63 345.23 352.23 331.00 331.00
MIMAROPA 1,119.10 1,134.01 1,122.00 1,127.00 1,172.00 1,183.00 1,369.00 1,409.00 1,434.00 1,424.00
BICOL REGION 42,832.04 42,832.1 42,663.0 42,662.0 42,662.0 41,748.0 42,864.0 42,171.0 44,509.0 45,254.0
5 0 0 0 0 0 0 0 0

WESTERN VISAYAS 4,260.24 4,150.63 4,020.00 4,001.00 3,946.00 3,903.00 6,562.13 6,567.13 6,530.00 6,334.00
CENTRAL VISAYAS 3,083.86 3,083.65 3,087.00 3,097.00 3,097.00 3,097.00 3,337.50 3,338.00 3,325.00 3,269.00
EASTERN VISAYAS 44,952.46 44,777.1 45,068.1 44,943.1 42,388.0 40,602.0 39,513.0 37,780.0 36,237.0 31,601.0
6 6 6 0 0 0 0 0 0

ZAMBOANGA 1,728.44 1,874.00 1,885.00 1,869.00 1,919.00 1,932.00 1,948.00 1,955.00 1,965.00 1,997.00
PENINSULA

NORTHERN 4,970.75 4,988.00 4,993.00 4,990.00 5,036.00 4,834.00 4,816.00 5,376.00 5,381.00 5,194.00
MINDANAO

DAVAO REGION 10,952.74 10,088.2 10,120.2 10,777.0 10,808.0 12,166.0 13,544.0 14,624.0 13,187.0 13,808.0
2 2 0 0 0 0 0 0 0

SOCCSKSARGEN 3,893.94 3,949.40 4,018.00 4,555.00 4,589.00 4,582.00 4,615.00 5,899.00 5,924.25 6,002.25
CARAGA 9,181.24 9,735.16 9,891.00 9,912.00 9,920.00 11,780.0 10,949.0 9,911.00 10,437.0 10,447.0
0 0 0 0

ARMM 7,930.13 7,927.40 7,902.25 7,914.30 7,914.20 7,913.20 8,020.10 8,057.10 8,067.10 8,031.10
Source: Philippines Statistic Authority (Country Stat)
28

Table 8: Volume of Production of Abaca by Region (in Metric Tons)


2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

PHILIPPINES 74,014. 69,801.60 66,437.23 68,385.7 65,825.4 66,511.7 68,612.6 68,510.4 64,951. 68,052.
00 7 1 5 8 6 60 98
CAR 6.98 13.50 14.05 13.07 13.34 13.37 13.08 13.20 13.03 11.24
ILOCOS REGION .. .. .. .. .. .. .. .. .. ..
CAGAYAN VALLEY .. .. .. .. .. .. .. .. .. ..
CENTRAL LUZON 30.62 47.87 52.50 79.50 99.50 109.00 110.59 126.00 113.25 95.20
CALABARZON .. 36.96 51.85 24.37 21.43 2.20 3.90 10.90 15.07 2.31
MIMAROPA 55.11 66.89 69.47 71.79 73.85 76.64 88.70 106.24 120.98 149.26
BICOL REGION 19,933. 20,327.58 17,144.52 18,363.1 18,832.5 20,264.1 22,645.4 23,086.1 24,077. 28,950.
61 7 5 2 8 1 96 59
WESTERN VISAYAS 1,130.6 1,579.23 1,337.87 1,679.24 1,567.89 1,492.42 1,853.36 2,236.46 1,741.2 1,599.1
8 9 1
CENTRAL VISAYAS 605.50 389.69 470.17 731.30 382.70 332.34 397.07 414.25 414.57 492.97
EASTERN VISAYAS 29,117. 25,787.77 24,752.39 23,779.4 21,239.4 20,326.4 20,023.4 19,190.8 16,597. 12,849.
26 4 4 2 3 7 42 25
ZAMBOANGA 148.35 113.23 221.16 177.10 198.11 230.96 630.77 675.30 589.54 678.55
PENINSULA
NORTHERN 1,765.8 1,553.13 1,569.48 1,614.85 1,741.23 1,767.88 1,824.77 2,042.71 2,243.8 3,120.3
MINDANAO 5 8 6
DAVAO REGION 10,296. 8,900.73 9,554.47 10,247.1 10,212.4 10,241.6 9,226.22 8,839.16 7,268.6 8,127.1
34 5 5 5 3 6
SOCCSKSARGEN 866.02 709.06 726.81 740.99 800.34 828.15 878.06 916.48 953.65 1,048.8
0
CARAGA 5,578.0 5,674.41 5,834.96 6,084.38 5,861.19 6,058.64 6,030.78 5,965.03 5,827.8 6,031.2
7 9 3
ARMM 4,479.6 4,601.55 4,637.53 4,779.42 4,781.39 4,767.96 4,886.48 4,887.75 4,974.4 4,896.9
1 4 4
Source: Philippines Statistic Authority (Country Stat)
29

(Refer to figure 4) The 2009, 2010 and 2014 is the lowest rate of area planted by abaca.

While the year 2011 is the highest peak with the area of 138, 991 hectares.

Another reason for the low of planted area in some places in Philippines is because of

the frequently typhoon and fortuitous event in the Philippines, the rate of planted area in

Abaca is decreased in the year 2014.

Figure 5: Volume of Production (Metric Tons)

2014 2005
10% 11%

2013
2006
9%
10%

2012
10%

2007
10%

2011
2008
10%
10%

2010 2009
10% 10%

Source: Philippines Statistic Authority (Country Stat)

The volume of production of Abaca is decreasing from 74,014.00 MT to 68,052.9

MT. It is because the Top 3 producing region are slowly depleted except the Bicol Region

that is still producing at 19,933.61 MT to 28,950.59.


30

Figure 6: Primary and Final Processor

Land
Stripping Dried
Preparation

Planting Harvesting Sorted

Crop Care and


Establishment Maintenance
End-Consumer

Abaca fiber is extracted from the leaf sheath around the base of the abaca plant.

Harvesting of abaca stalks usually takes place between 18 and 24 months from the first

shoots. When mature, an abaca plant will have about 12 to 30 leaf stalks, each

approximately 12 to 20 feet high. Subsequent harvest is done at 3 to 4 month intervals.

There are two stages in the harvesting process: (1) topping, when the leaf stalks

are cut at the base of the petiole with a knife or a sickle, and (2) tumbling, when the stalks

are tumbled down with the use of a bolo knife. After tumbling, the cut stalks are put in a

pile, ready for the next step: tuxying.

Tuxying is the process of extracting the fiber from the leaf sheaths. A specially-

made tuxying knife is used to make an incision through the inner and middle layer of each

sheath, close to the base or butt end to remove the outer layer.
31

The strips, or “tuxies”, obtained from this process are then put through a cleaning process,

called stripping, in which all pulpy material is scraped off and the strands of fiber are freed.

In the Philippines, the two common stripping methods in use are hand-stripping and

spindle stripping.

Hand-stripping (hagotan) is a simple yet laborious method. The strip, or tuxy, is

inserted between a block and the stripping knife, then pulled with force from the tip end

of the tuxy to separate the fiber from any waste.

The Spindle stripping method involves winding the fibers around a tapered-shaped

spindle which is kept in motion by an electric motor or an engine. A spindle stripped fiber

tends to be whiter and more lustrous than a corresponding grade of hand stripped fiber.

Fibers recovered vary from 1.5% to 2% by weight of the freshly cut stalks. The

abaca fibers are then left out to dry naturally in the sun. Once the abaca fibers have dried

out sufficiently, they are transported to a warehouse where they are sorted according to

quality. Abaca fiber is classified in accordance with government and international

standards. After classification, the abaca is then baled by means of pressing

machines. The standard bale of abaca fiber is equivalent to 125 kilograms and measures

around 100 cm. x 55 cm. 60 cm. the best grades of abaca are fine, lustrous, light beige

in colour and very strong. The official standard grades of abaca fiber are divided into three

classes depending on the manner of extraction: hand-stripping, spindle-stripping or

decortication. Quality is then determined by colour, texture, fiber length, strength, and

cleaning, which is a direct result of the stripping method and knife used. Then the fibers

are bundled and sold to pulpers, ropemakers, or artisans. Nowadays most abaca is

pulped into cardboard-like sheets and then shipped to specialty paper makers such as
32

this manufacturer in the UK. And some abaca is mixed with plastics to create

exceptionally hard composites that can be molded into an automobile undercarriage, for

example. Other grades of abaca fibers may be woven into textiles and rugs or blended

with different fibers to make currency or cigarette papers and even sausage casings.

Post-Harvest

How the Abaca Fiber is Produced

Briefly, the abaca fiber is a by-product of the stems of the abaca plant. The plant is

basically left to grow from one to two years before the first harvest of the sheath and the

stems take place.

After the maturation period, growers usually harvest every 3 months up to 8 months. The

stems are cut and stripped; and these strips are further processed by hand to eliminate

any leftover pulps before drying them under the sun.

The 1st layer and the 2nd layer of strips are separated to differentiate the grades of the

fibers. The first layer is usually rougher and more sturdy – good material for ropes; the

second strip is smoother and more refined, perfect for paper products.

As for the 3rd and 4th layers; these are the fibers used to make bags and other fashion

items.
33

CHAPTER IV
PROCESSING SUBSYSTEM

Abaca fiber is primary used as raw material by end user industries such as pulp

and paper processors, handicraft/fiber craft and cordage manufactures. Some pulp well

know processors are Specialty Pulp Manufacturing Incorporated (SPMI) in Baybay, Leyte

and New Tech Pulp Incorporated in Lanao Del Norte.

The quality of abaca fiber is determined by strength, cleaning, color, texture and

length of the fiber. In terms of cleaning (which is a direct result of the stripping apparatus

or knife used). The standard grades for hand and spindle-stripped are shown below.

Table 9: Standard Grades of Hand-Stripped and Spindle Stripped


Classification Grade

Excellent S2, S3
Good I, G, H
Fair JK, M1
Coarse L
Residual Y1, Y2, O, T, WS
Spindle-stripped abaca fibers are indicated by the letter ‘S’ before the official grade, i.e.
S-S2, S-1, and so-on.
Source: PhilFIDA

The abaca fibers are used in the production of handicraft products such as fashion,

table-top and decorative accessories, furniture, garments, textile, packaging material,

plaything for pets and sports paraphernalia.

Abaca fibers are also used in pulp-making which are used as raw materials in the

production of currency and bank notes, tea bags, Bible paper, coffee filters, meat casing,
34

coating for pills, surgical caps and masks, high capacitor paper. Cable insulation papers,

restoration and conservation of historical documents, adhesive tape paper, lens tissue,

carbonizing tissue, abrasive base paper, mimeograph stencil base paper, weather-proof

Bistol, maps, chart, as a strengthening material for napkin and tissue paper; insulation for

computer chips, etc.

Figure 7: Uses of Abaca

Source: PhilFIDA Website

The most important part of the abaca is the stalk which is the source of the fiber.

Abaca fiber is superior over all other natural fibers because of its great strength and its

resistance to the action of water. Considered the strongest of all natural fibers, it is three

times stronger than cotton. The product is known worldwide as the “Manila Hemp”, with
35

the Philippines accounting for 90% of world exports. The only other exporter of abaca is

Ecuador.

The oil from the abaca seeds can be used for the manufacture of cosmetics and

skin care products. It can also be used in the production of paints and inks. To date,

there is no known manufacturer in the Philippines producing products from abaca seed

oil.

The official standard grades of abaca fiber are divided into three (3) classes

depending on the manner of extraction, namely: hand-stripping, spindle-stripping and

decortication. Quality is determined by strength, cleanliness, color, texture and length of

the fiber.

Figure 8: Abaca fiber production flow between tuxying and leafsheaths

Handstripping
(29%)
Tuxy
Spindle-stripping
Tumble Stalk (43%)

Leafsheaths are Decortication


separated (95%)

It starts with the tumbling of the stalk, which leaf sheaths are either tuxied or

separated depending on the extraction process employed. If the process is stripping,

tuxies are used; if decortication, the raw materials are leaf sheaths. A stalk of abaca

contains fiber equivalent to 3-4% of its weight depending on variety, maturity, and source
36

of the plant. The method of extraction influences fiber recovery. At 3.5% fiber content of

abaca stalks, manual stripping yields 1% fiber or 28% of the recoverable fiber; spindle

stripping recovers 1.5% or 43% of the total fiber content while the decortication process

produces 3.34% fiber by weight of the stalk or 95% of the total recoverable fiber.

Processors

Pulp Mills

There are 6 abaca pulp mills operating in the Philippines; 1 in Laguna, 2 in Bicol; 2 in

Leyte and 1 in Mindanao. These processors consume about 63% of the total abaca fiber

produced and account for 71.2% of domestic consumption.

NewTech Pulp, Inc. (NPI), the biggest pulping plant in the world with rated capacity of 60

MT per day, is located in Mindanao (Iligan City). NPI needs 2,100 metric tons per month

for the 24/7 operation of their plant. As of 2013, the company was able to secure only

about 1,400 MT/ month from regional and provincial traders. To augment its supply, it

imports abaca fiber from Ecuador.

Cordage Manufacturers

There are 7 cordage firms operating in Metro Manila, Albay, Cebu and Davao. They use

abaca as the principal raw material for rope, cordage and twine manufacture. Cordage

firms use abaca as the principal raw material for rope, cordage and twine manufacturing.

They blend abaca with other natural fibers depending on the specifications of the buyers.
37

Fibercraft Producers

The fibercraft subsector, including handmade papermaking and carpet manufacturing,

primarily consists of micro and small enterprises. There are 4 cooperatives in Agusan del

Norte who are producing sinamay and other fibercraft products. Most of the fibercraft

exports are located in Bicol and Cebu.

Processed product

The abaca is considered to be the strongest natural fiber, having a tensile strength

that is three (3) times that of sisal or Agave sisalana. Natural fibers are also accepted to

have better characteristics than common human-made fibers. Compared with synthetic

fibers like rayon and nylon, abaca fiber not only possesses the highest tensile strength

but also has longer elongation in both wet and dry states. Because of its non-slipping

characteristics, the abaca is highly preferred in oil dredging/oil exploration, navies, and

merchant shipping.

As countries all over the world become more conscious of the need to protect and

preserve the environment, bio-degradable materials such as the abaca are preferred over

non-biodegradable ones like plastic and other synthetic materials.

Not only is the abaca still used for ropes and cordage at present. Its versatility is

also evident in its many other current uses as a much sought-after raw material for various

industrial and commercial products including currency and security paper, tea bag paper,

coffee filter, meat and sausage casing, cigarette paper, filter paper, plug wrap, stencil

paper, electrolytic condenser paper, non-woven fabrics, furniture and fixtures, gifts and
38

novelty items, decorative accessories, textiles, handicrafts, cosmetics, skin care

products, grocery bags, automobile parts, and many others.

The Making of an Abaca Bag

Creating an abaca bag undergoes several processes. After the raw fibers have

been dried sufficiently, they are dyed different colors to give the bag-makers and

designers more colors to mix and match.

The fibers are then again hung to dry. After this, they are woven together or knotted to

create bags of different shapes and sizes. Sometimes, the fibers are threaded together

with other materials such as metallic strings to create other types of designs for the abaca

bag.

Zippers, buttons, shells, synthetic leather for handles; synthetic silk cloths for lining

and other materials to funky-up the bags are then added. Looms and other weaving

equipment are used but everything is done manually.

Of course, the entire process is actually more tedious than it sounds but basically, these

are the steps to create abaca bags.

Cordage and Fibercrafts

Abaca sheaths Raw abaca being stripped Dry Abaca

to get to the fiber within


39

Measured Abaca fiber hooked onto a Weaves to shape


contraption that twines it
into a thin rope.

Cordages

Abaca Paper Making (Pulp)

Materials needed Sifting abaca pulp from the


water into the wooden forms

Sponging of the excess water from the abaca The abaca pulp ready to dry into paper
40

One more step to dry the abaca Abaca paper


with cloth and rolling pin

Yarn

Step 1: Preparing the fibers

Fibers are shipped in bales, which are opened by hand or machine. Natural fibers may

require cleaning, whereas synthetic fibers only require separating. The picker loosens

and separates the lumps of fiber and also cleans the fiber if necessary. Blending of

different staple fibers may be required for certain applications. Blending may be done

during formation of the lap, during carding, or during drawing out. Quantities of each fiber

are measured carefully and their proportions are consistently maintained.

Step 2: Carding

The carding machine is set with hundreds of fine wires that separate the fibers and pull

them into somewhat parallel form. A thin web of fiber is formed, and as it moves along, it

passes through a funnel-shaped device that produces a ropelike strand of parallel fibers.

Blending can take place by joining laps of different fibers.


41

Step 3: Combing

When a smoother, finer yarn is required, fibers are subjected to a further paralleling

method. A comblike device arranges fibers into parallel form, with short fibers falling out

of the strand.

Step 4: Drawing out

After carding or combing, the fiber mass is referred to as the sliver. Several slivers are

combined before this process. A series of rollers rotating at different rates of speed

elongate the sliver into a single more uniform strand that is given a small amount of twist

and fed into large cans. Carded slivers are drawn twice after carding. Combed slivers are

drawn once before combing and twice more after combing.

Step 5: Twisting

The sliver is fed through a machine called the roving frame, where the strands of fiber are

further elongated and given additional twist. These strands are called the roving.

Step 6: Spinning

The predominant commercial systems of yarn formation are ring spinning and open-end

spinning. In ring spinning, the roving is fed from the spool through rollers. These rollers

elongate the roving, which passes through the eyelet, moving down and through the

traveler. The traveler moves freely around the stationary ring at 4,000 to 12,000

revolutions per minute. The spindle turns the bobbin at a constant speed. This turning of

the bobbin and the movement of the traveler twists and winds the yarn in one operation.

Step 7: Final Stage

Open-end spinning omits the roving step. Instead, a sliver of fibers is fed into the spinner

by a stream of air. The sliver is delivered to a rotary beater that separates the fibers into
42

a thin stream that is carried into the rotor by a current of air through a tube or duct and is

deposited in a V-shaped groove along the sides of the rotor. As the rotor turns, twist is

produced. A constant stream of new fibers enters the rotor, is distributed in the groove,

and is removed at the end of the formed yarn.

Technological and Development

The development of new end-use for abaca fiber in composite applications for the

automotive industry in Germany contributed to boost the demand for the fiber. The car

manufacturer, Chrysler-Daimler, cited the very good ecological balance of abaca

combined with its excellent technical properties similar to those of glass fiber, the material

previously used in the underbody protection of the car. The use of abaca fiber, instead

of glass fiber, brought about primary energy savings of 60%, thus significantly reducing

carbon dioxide emission.

Other car manufacturing companies especially in the European Union are

expected to use natural fibers as material for their car parts in compliance with the End-

of-Life-Vehicle Regulation of the European Parliament. The said Regulation requires

them to dispose of at the end of life of their vehicle.

As composite material, abaca fiber has potentials in boat/ship building industries,

aeronautics as well as in construction business especially for high-rise building.

Abaca as Wellness Product.

The cosmetic industry also makes use of abaca enzymes in the production of

natural, organic, hand-crafted skin care products like abaca soap and lotion which

reportedly have anti-aging and therapeutic properties and are now exported abroad.
43

Abaca for Fashion.

The use of abaca, in pure or in blends with other natural fibers like piña fiber and

pineapple silk, for textile is another opportunity.

The recently-concluded Philippine Fashion Week presented contemporary and wearable

collection fashioned from these fibers, veering away from the traditional “cultural”

ensemble, appealing and acceptable to both the young and old generations.

Other New Uses.

Researches on product development could further open up more opportunities for

abaca fiber especially as cement laminas which can be used for making wall panels most

suitable in the construction of high-rise buildings. In addition, abaca fiber can be utilized

as composite material (abaca fiber blended with cement) for the construction of boats and

as raw material component for apparels like “organic” denims.

Competitive

Although the Philippines was fortunately able to maintain its lead in raw abaca exports,

China’s tweaking of Filipino designs of abaca designs have become a headache for

handicraft exporters. According to a trade player, the Chinese were able to imitate and

mass-produce the once expensive Filipino abaca-made handiworks that flooded big US

stores such as Macy’s. The insider also revealed that China doesn’t just “pirate” the

designs but they pirate the Filipino designers and with their cheap labor and inexpensive

production costs, Philippine abaca made items are now rendered uncompetitive.
44

CHAPTER V
MARKETING SUBSYSTEM

Abaca, known internationally as Manila hemp, is grown primarily for its fibers. The

fiber is extracted from the leaf sheath around the trunk of the abaca plant. Due to its

superior tensile strength and proven durability under seawater (Lalusin, 2010 as cited by

Bande, 2012), there’s no wonder why it is considered as one ofthe sturdiest of natural

fibers. One major factor that makes the commodity highly competitive in the market

compared to other natural hard fibers is its quality. The fibers of Abaca are utilized as raw

materials in the pulp and paper, cordage and twine, yarns and threads, and fibercraft

business. The Philippines provides 83.4% of the world supply of fiber. The Abaca industry

contributes US$80.6 million every year to the Philippine economy (Biolife, 2005), making

it one of the major source of income for Filipinos. It continues to be one of the country’s

major pillars in terms of employment generation and foreign exchange earnings. The

industry sustains more than 1.5 million Filipinos who, directly or indirectly, depend on it

for a living. Direct dependents include abaca farmers, classifiers/sorters, manufacturers,

traders, exporters and hundreds of fibercraft processors who provide employment to

thousands of Filipinos. (Fiber Industry Development Authority).

Compatibility and Marketability of Abaca Fiber

Abaca is environment friendly. It is compatible and can be intercropped with forest

crops, fruit trees and other high value crops. It also does not harm the living of humans

making it a good material for agro forestation. Products that are made from mainly abaca

fibers are biodegradable. The high demand of abaca fibers results from considerable

factors. One is the opening of markets which require teabags, cigarettes, and meat
45

casings in specialty paper made of abaca. Another are the growing popularity of abaca

fabric and the increasing demand for special paper for stencil paper, currency paper,

filters, high-tech capacitor papers, and other non-woven and disposable products. The

automotive industry demands also for abaca fibers for the production of fillers. Most of

these markets develop in other countries making abaca fiber a product for export, but still

the demand is not definite. There is a worldwide preference for environmentally-friendly

products as replacement to synthetic materials which makes abaca fiber more

marketable.

Market Flow

From the producer/farmer/stripper, the abaca fiber is sold at an "all-in" basis to the

barangay dealer. At this stage, fibers are sold ungraded due to farmers’ general lack of

knowledge of the grading/classification system. The fiber goes further to the town/city

dealers. To some extent the farmers sell directly to exporters/grading and baling

establishments (GBEs). In some cases, farmers' cooperatives/associations have a direct

link to domestic processors.

Abaca Farmers

The farmers are the cultivators of abaca. Their primary works are the maintenance

of farm and harvesting of abaca fibers. In the latest report of FIDA, as of 2010, there were

about 107,178 abaca farmers cultivating a total area of 167,145 hectares or an average

of 1.6 hectares per farmer. Moreover, there were 470 farmers recorded in Toril, Davao

City. The farmers are considered the weakest player in the chain for most of them are

poor and they lackfinancial assistance for trainings and seminars for biological pest
46

control. When the season is during or near the enrolment of their children, most of the

farmers tend to include the immature abaca in the aim of higher profit. However, it is

monitored that there are vast potential farm areas for abaca development.

Strippers

Strippers extract the fibers, either by manual (hand) or mechanical means. Abaca

extraction is 80 percent manual and only one percent of the fiber is recovered. Mechanical

means involve a stripping machine that costs about P45,000. The expensiveness of the

machine is the reason why most abaca producers retain in the manual way to extract

fiber. Included in the stripping work are harvesting of stalks, tuxying and drying of fibers.

Tuxying refers to the removal of the leafsheaths; distinct grades of the fiber are produced

according to the sequence of the leafsheaths. Farmersdo air dry the fiber in temporary

shades. This is one reason why farms are established in areas with plenty of foliage.The

strippers are paid on a pre-determined system in which they receive 50 to 70 percent of

the harvest depending on the prevailing practice agreed upon. It is observed that the

number of abaca strippers is declining due to more profitable jobs offered in the cities.

Classifiers

Classifiers sort and grade the fibers based on the standards set by the

government. Standards are set according to the texture of abaca fiber and the method

used to extract. Prices of abaca vary on the different grades. FIDA monitors the price of

fiber every week and it is observed that the changes in the prices of abaca are not that

substantial. The most common grades of abaca fiber are: (see Table #)
47

Traders

Trading is done at different levels depending on the location of the farmers and

where the accumulation of fiber is done. Hence, there are traders in the barangay, town,

province, city and region. In each level, the pricing system includes mark-up attributable

to the service provided by the trader. Traders are classified depending on the volume of

fibers traded. A Class A trader sells more than 75,000 kilos of fiber per year; Class B

trader – more than 50,000 kilos per year; Class C trader – more than 25,000 kilos per

year and Class D trader – 25,000 kilos and below. As of 2010, there are 438 licensed

abaca traders and 16 licensed abaca trader-exporters. Local town traders greatly profit in

the process because they only increase the price of fiber and sell. They also tend to have

association which results into direct marketing of produce.

Grading and Baling Establishments (GBEs) or Fiber Exporters

The fiber exporters, also known as grading and baling establishments (GBEs),

operate in major abaca regions and usually maintain liaison offices in Metro Manila. It is

in this sector where abaca fibers, whether for local or foreign consumption, are graded

and baled, using high density presses, into 125 kg of 100 cm.x 55 cm. x 60 cm. bundles

per specific fiber grade. There are 13 licensed grading-baling establishments operating

in the country. Three of these are located at Lanang, Toril, and Ilang, Davao City. They

compete to acquire a supplier in the Davao region, that’s why they need to develop their

own marketing strategies.


48

Processors

1. Pulp Millers

As of 2010, there are six abaca pulp companies operating in the Philippines, one

in Laguna, two in Bicol, two in Leyte and one in Mindanao. The companies have well

established market networks for their pulp which are principally destined for the world

market.

2. Cordage Manufacturers

There are currently six cordage firms operating in the various parts of the country:

two in Metro Manila, one each in Albay, Cebu and Davao. Davao Rope Company is

situated at Sasa, Davao City.They use abaca fiber as the principal raw material for rope,

cordage and twine manufacturing. Blending with other natural fibers like maguey is done

depending on the specifications of the buyers.

3. Fibercrafts Manufacturers

The fibercraft sector, which includes handmade papermaking, rugs and carpet

manufacturing and handloom weaving, is primarily a cottage-based industry. Operating

mostly in the countryside, the sector is a major source of livelihood especially to the

womenfolk and out-of-school youth. However, some fibercraft products are of low quality.

Several of these manufacturers have successfully established their markets abroad

especially through their unique, functional and creative designs. The handloom weaving

sector produces abaca fabrics which are used as raw material for making novelty and

household items, as décor and wrapping material as well as for high fashion wear and

accessories. Some abaca weaves are blended with metallic thread or polyester while
49

others have printed, striped and ethnic designs to suit the varying needs of the market.

The industry is mainly found in Bicol, Western Visayas, Eastern Visayas, Central Visayas

and in Southern Mindanao where particularly in the latter, indigenous people from the

upland areas are actively engaged in “tinalak” and “dagmay” weaving. Production of new

product lines for fashion wear and accessories and specialty/novelty items is mostly

based in Metro Manila.

4. Other Processors

Other processors include manufacturers of machine-woven carpet, dartboard pads

as well as the makers of furniture who are now using abaca fiber and “bacbac.” One is

the TADECO Livelihood Handicrafts which is located at Panabo City.

Existing Marketing Program

The raw fiber are mostly collected by the provincial and municipal traders who sell

to Grading and Baling Establishment (GBEs), Class A Traders, and processors. For

abaca farms situated in remote of neighbouring farmers, before selling them to municipal

or provincial traders.

(Refer to Figure 9). Although the abaca industry has been in existence for so many

decades, the chains continue to operate under market-based governance where

transactions are typically conducted at arm's length under the auspices of “spot

contracts,” with no other bonds existing between the parties before or after the transaction

except for credit provision. The incentive system in market governance revolves around

price. The Philippines has a well-established grading system which provides a clear

definition of the distinguishing quality attributes of abaca fibers as well as provide the
50

framework or guide for the price of a specific lot of abaca fiber. Unfortunately, however,

the grading system is not strictly enforced at the local trading given the dominance of all-

in procurement.

Figure 9: Abaca Flow of Products and Services


51

Demand

Local Demand

Abaca fiber consumption in Philippines is witnessing a continuous increase among

the end user industries due to widening applications of the fiber. Abaca fiber market in

Philippines is supported by various investor friendly initiatives taken by the country’s Fiber

Industry Development Authority (FIDA), which is expected to further boost the abaca fiber

market in the coming years.

Table 10: History Local Demand of Abaca


YEAR ANNUAL DOMESTIC CONSUMPTION (Metric Tons)
2005 59,170
2006 56,175
2007 60,723
2008 51,722
2009 40,684
2010 47,107
2011 63,972
2012 49,503
2013 55,958
2014 64,004

Source: PhilFIDA

The demand of Abaca every year is imbalanced. There are years that it will

increase and decrease. And it show that the year 2009 and 2010 is the lowest

consumption of Abaca.
52

Table 11: Abaca Value of Production by Region (Unit Million)


2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Current Prices
CAR .. .. .. 0.44 0.36 0.35 0.39 0.40 0.38 0.43
Central Luzon .. .. .. 3.52 3.22 3.80 4.33 5.15 4.16 4.33
CALABARZON .. .. .. 0.88 0.72 0.07 0.04 0.40 0.76 0.09

MIMAROPA .. .. .. 3.08 2.50 2.77 3.55 4.36 4.54 6.50


Bicol Region .. .. .. 876.87 673.93 684.59 1,039.41 1,002.57 961.27 1,391.63
Western Visayas .. .. .. 76.27 63.33 49.93 68.04 77.15 58.62 63.84
Central Visayas .. .. .. 26.48 10.86 8.68 13.83 12.69 12.06 17.60
Eastern Visayas .. .. .. 1,072.95 744.04 736.76 745.14 675.10 598.76 520.17
Zamboanga .. .. .. 7.93 7.15 7.95 24.82 26.93 22.33 29.45
Peninsula
Northern Mindanao .. .. .. 58.83 87.56 59.88 74.09 86.03 98.72 132.51
Davao Region .. .. .. 356.70 348.16 356.56 286.87 292.16 217.15 261.87
SOCCSKSARGEN .. .. .. 30.86 34.46 28.32 37.03 38.31 34.41 48.12
Caraga .. .. .. 288.74 232.70 222.52 228.11 287.10 268.76 285.28
ARMM .. .. .. 193.35 168.11 149.01 197.36 216.09 175.5 204.38

Constant Prices
CAR .. .. .. 0.19 0.19 0.19 0.19 0.19 0.19 0.19
Central Luzon .. .. .. 1.50 1.68 2.06 2.06 2.43 2.06 1.87
CALABARZON .. .. .. 0.37 0.37 0.04 0.02 0.19 0.37 0.04
MIMAROPA .. .. .. 1.31 1.31 1.50 1.68 2.06 2.24 2.80
Bicol Region .. .. .. 373.81 383.38 412.49 461.15 470.11 490.27 589.42
Western Visayas .. .. .. 33.05 30.88 29.31 36.39 44.06 34.23 31.47
Central Visayas .. .. .. 44.30 23.06 20.03 24.28 24.88 24.88 29.74
Eastern Visayas .. .. .. 553.36 494.25 473.08 465.87 446.55 386.2 299.02
Zamboanga .. .. .. 3.36 3.74 4.30 11.77 12.71 11.03 12.71
Peninsula
Northern Mindanao .. .. .. 32.20 34.80 35.40 36.40 40.80 44.80 62.40
Davao Region .. .. .. 151.50 150.90 151.35 136.42 130.66 107.4 120.16
SOCCSKSARGEN .. .. .. 9.92 10.73 11.13 11.80 12.34 12.74 14.08
Caraga .. .. .. 142.39 137.24 141.93 141.22 139.82 136.5 141.22
ARMM .. .. .. 50.81 50.81 50.71 51.98 51.98 52.83 52.09
Source: Philippines Statistic Authority (Country Stat
53

The table show the difference of the Current and Constant Prices. In Current price,

the price are increased in 2014, but in the 2008 is the highest rate of the value production

of abaca by region. In constant price, the price are slowly decreased to 1,261.65, and the

lowest rate of value production is in the year 2013.

Figure 10: Value of Production (Unit Millions)

3,500.00

3,000.00

2,500.00

2,000.00

1,500.00

1,000.00

500.00

0.00
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Current Price 2,442.3 2,430.0 2,266.2 3,011.2 2,363.3 2,353.7 2,706.6 2,710.2 2,445.3 2,947.9 3,309.2
Constant Price 1,369.1 1,291.4 1,236.4 1,272.7 1,226.4 1,241.7 1,281.6 1,270.1 1,204.1 1,261.6

Source: Philippines Statistic Authority (Country Stat)

2008 is the highest peak of the value of Abaca in current price while it slowly

decreased in 2010 with the difference of 65.7%. In constant price of Abaca, 2005 is the

highest peak and slowly decreased up to 2013 with the difference percentage of 16.5.

And because of the low production of the abaca in 2014, the rate for the value (in millions)

are increased in 36.13%, this give us the Law of Supply and Demand.
54

Figure 11: Market Flow of Abaca

Above shows how the production and collection process of abaca fiber is being

organized. As the market chain maps shows, the region’s abaca chain routes leading to

top abaca fiber users. These are the abaca pulp mills which consumes 89% of the region’s

abaca fiber production, the cordage manufacturer which consumes 10% and fibercraft

processor which consume 1%. Abaca farmers in the region have several channels where

they can sell their products to. There are abaca farmers who sell directly to abaca

fibercraft processor. However, most of the farmers abaca produced are sold via abaca

traders operating within their localities.

GBEs get their abaca fiber from their regular supplier, the abaca traders. GBEs

limit or only get supply from their regular/identified trader/supplier from a certain area.
55

This is to protect the business of their trader supplier while ensuring consistency and

sustainability at the same time. The cordage manufacturer also use the same practice.

Fibercraft processor on the other hand get their supply of abaca fiber directly from farmers

and abaca traders. Small fibercraft processor get their supply from preferred farmer

supplier who are able to meet their quality requirement. At the level of GBEs and cordage

manufacturers, the firms swap certain abaca fiber grades they need for their operations.

The latter can operate using lower grades of abaca fiber while GBEs often need good

quality fibers to supply to their company-owned pulp mills.

Domestic Market

The acceptable range of fiber moisture content is 12% to 14%. Buyers though

said that at times moisture content of abaca being traded reach 20%. Damp fibers lead

to further quality deterioration that reduces pulp recovery while the presence of

contaminants such as plastics, twigs, cigarette butts, etc. damages the pulp that could

result in the rejection of the entire lot/batch. The practice of knotting the fiber strands

damages the combing machine used by cordage companies and increases the cost of

production if used for making pads/mattresses; knotted strand can also no longer be used

for pulp production.

Domestic processors consumed an average of 50,592 MT or 77.0% of the

country’s average yearly production of abaca fiber during the past decade. The sector’s

fiber consumption level was observed to be decreasing fairly at a rate of 1.1% per year.

Abaca fiber is being processed locally into pulp, cordage and various fibercraft items

including furniture.
56

Fibers produced by Caraga are generally utilized outside of the region. Most of

the fiber is ultimately sold to Ching Bee/SPMI and New Tech Pulp Inc. Ching Bee and

the other GBEs sell graded and baled fibers to both the export and the domestic users of

abaca fibers. Foreign buyers get 40% of the total output of GBEs, while local abaca

fiber/pulp processors get about 60% of their output. Abaca processors also sell directly

to foreign and local buyers.

Figure 12: Local Consumptions

Local Consumption

8.30%

20.50%

71.20%

Abaca Pulp Abaca Cordage Fibecraft

The consumption of Abaca Pulp in local area is more in demand than Abaca

Cordage and Fibercraft with its 71.20 %. Fibercraft is the lowest with its percentage of

8.30.
57

Figure 13: Farm Gate Prices

2015 47.23

2014 43.31

2013 37.84

2012 39.6

2011 39.4

2010 34.57

2009 35.77

2008 44.06

2007 34.17

2006 34.78

2005 32.82

0 5 10 15 20 25 30 35 40 45 50

pesos per kilogram (or as indicated) * - pesos per piece

Foreign Demand

Abaca export from the Philippines expanded 57.4 percent to $79.63 million in

January to August 2014 from $50.6 million in the same period in 2013 on the back of

sustained demand for the crop in the country’s major markets. (Fiber Industry

Development Authority).

Figures from FIDA, an attached agency of the Department of Agriculture (DA)

showed that the value of the shipments of abaca fiber more than double to $10.9 million

in the 8th months to August 2014 from $4.9 million posted in the same period in 2013.

The value of abaca pulp shipped out to other countries also rose by 64% to $51.1

million from $34.8 million recorded in January to August 2013. Earnings from cordage

and fabrics also went up by 18 percent and 21 percent, respectively.


58

Abaca products exported to the country’s major markets in Asia reached 24,574

bales in January to August 2014, a whopping 428-percent improvement from 4,654 bales

recorded in 2013.

Japan was the top importer of local abaca products, accounting for 15,863 bales.

Shipments to Japan in terms of volume grew threefold from 3,844 bales recorded in

January to August 2013. Shipments to China recorded the biggest improvement during

the period at 2,737 percent. China imported a total of 5,108 bales of abaca products in

the eight months to August 2014 from 180 bales posted in the same period in 2013.

Demand from Europe has also started to pick up, according to FIDA. The

Philippines exported a total of 22,972 bales of abaca products to European countries in

January to August 2014. In terms of volume, shipments jumped by 88 percent compared

to the figure posted in January to August 2013.

The Bicol region and Eastern Visayas are the top producers of abaca in the

country. The Philippines supplies 85 percent of the total abaca requirement of the world.

The country’s major markets are the United States, Japan, and Germany.

Table 12: Major importing countries (as of 2012)


Raw fibers United Kingdom, Japan, China, Indonesia, India

Manufacturer
 Pulp Germany, UK, Japan, France, China, USA
 Cordage, ropes and twines USA, Singapore, Malaysia, Germany, United
Arab Emirates, Canada
 Fibercrafts USA, Japan, Italy, United Kingdom, France,
Australia, Hong Kong, China
 Fabrics Hong Kong, Italy, UK, China, South Africa
Source: FIDA
59

Supply

Local Supply

Cooperatives largely rely on their membership base as their source for Abaca fiber.

Non-member also supply but loyalty is not guaranteed. Main constraint faced by

cooperative intermediaries and the traders in general is the high degree variance in terms

of volume and quality of fibers. In addition to problems at the farm and stripping levels,

poor storage conditions also contribute to quality deterioration. Traders who are unable

to consolidate at least 15 tons per delivery sell their fiber to higher level intermediaries.

In 2014, abaca made turnaround and posted an increase of 0.05 percent in output.

The favourable weather conditions during the period and the good market price

encouraged more stripping activities in Catanduanes, Agusan del Sur, Surigao del Sur,

Negros Oriental and Bukidnon. In addition, increases in harvest areas were reported in

Davao provinces and Lanao del Sur.

Foreign Supply

The Philippines dominates the global abaca production. As of 2012, the country

supplies about 87 percent of the world abaca requirement. The crop is also cultivated in

other Southern Asian countries but not in a commercial scale. The Philippines closest

rival is Ecuador; it is the second and only country that produces abaca commercially. It

supplies the remaining 13 percent of world abaca requirement.

Abaca is grown in Ecuador on large estates and production is increasingly

mechanized. In Philippines, abaca is grown in a smallholder farms using manual system.


60

Figure 14: Abaca export prices

The most exported qualities is the S2 (Excellent), G (Good) and JK (Fair) with its

highest price of $ 240-250, $ 210-220, and $ 180-190 respectively.

Rival Countries

Despite the very bright prospects, the Philippine abaca—who once dominated

the global fiber world in the early 1900s to 1970s—found itself stalled from stiff

competition waged by Ecuador for raw materials and China for abaca-based products.

According to the Philippine Council for Agriculture, Forestry and Natural Resources

Research and Development (PCARRD) Ecuador almost stole the export market in 2000

as it accounted for 40 per cent of the shipments while the remaining 60% came from the

Philippines. These figures are not too narrow which showed the local abaca’s

vulnerability. Moreover, the country’s export rate at that time was 0.2 per cent while

Ecuador is already enjoying a 2.3 per cent rate. FIDA shares that the country’s low
61

yields was the foremost problem of the sector due to use of mixed varieties, lack of

disease-resistant planting materials and postharvest facilities and fragmented research

and development. Oddly, Ecuador sources its plants or abaca raw materials from the

Philippines.
62

CHAPTER VI
SUPPORT SUBSYTEM

A. FINANCIAL SERVICES

 Agriculture Credit Support Project (ACSP)

The Land Bank of the Philippines (LBP) through the Agriculture Credit Support

Project (ACSP) is a potential facility that can be trapped for the provinsion of financial

service that can be accessed by the abaca industry.

Aims to increase investment, to create new job opportunities, and to improve

agricultural productivity in the rural areas by providing loan funds and contributing to

the Nationa Government’s goal of “Poverty Reduction”.

 Land Bank of the Philippines

Is the executing agency responsible for the overall implementation of ACSP

throughout the Philippines. ACSP will provide financing support for agriculture and

agri-related projects using Japanese ODA loan fund secured through loan agreement

between Japan International Cooperation Agency (JICA) and LBP. The loan funds

can be provided directly from LBP or through its conduits to the agriculture clientele;

i.e. small farmers and fishers folks (SFF) individual/groups, small or medium

enterprises (SMEs), and large agribusiness enterprises (LAEs).


63

 Philippine Textile Research Institute (PTRI)

Aims to help the domestic textile and allied industries in attaining global

competitiveness through use of indigenous resources and by enhancing their

technical competence in production of textiles and quality assurance.

 The Department of Science and Technology (DOST) and the Department of Trade

and Industry

Ought to engage in more product development work to further diversify uses

and markets of our natural eco-friendly abaca fiber.

 Other Government Agencies

The government has also allotted PHP4.1 million to rehabilitate and expand

abaca plantation in some provinces. The rehabilitation—which will be led by the

National Abaca Research Center—includes the mass production of laylay and

inosa varieties as well providing disease-resistant breeds and capability building

for farmers to further train, establish and manage nurseries for tissue-cultured

plantlets. Within two years, the NARC is expecting a 200,000 plantlets of virus-

resistant abaca planting materials that will increase production and be a good

source of virus-free planting materials (Delmo, 2012).

 The Philippine Fiber Development Authority (DA-PhilFIDA)

Is the agency under the Department of Agriculture mandated to develop the

country’s fiber industry while uplifting the lives of fiber-producing farmers.


64

B. NON-FINANCIAL SERVICES

 Philippine Fiber Industry Development Authority (FIDA)

They trained farmers in different skills and technique from abaca production

to processing and they provide marketing assistance and consultative time in

business matching.

 DA-ATI/LGU

They provide training on Good Agricultural Practices, they also give free planting

materials and herbicides and they teach and train farmers to expository tour to

common service facilities and tissue culture laboratory.

 Cooperatives

Provided the following services: (1) Rental of stripping machines (2)

Coaching and mentoring of suppliers/members on basic abaca farming and

stripping

 Non-government organization

Farmers and cooperatives receive enterprise development training and

organizational development assistance from non-governmental organizations like

Kaisampalad, Inc. (KPI).


65

CHAPTER VII
STRENGTHS-WEAKNESSES-OPPORTUNITIES-THREATS ANALYSIS
A. INPUT SUBSYTEM

STRENGTHS WEAKNESSES OPPORTUNITIES THREATS

 Availability of all varieties  Instability of  Development of  Increase of

fertilizer’s price disease free high Input’s price


 Availability of other inputs
 Lack of access to yielding materials.
 Available technologies
disease-resistant
 Increasing input price
and new stripping
high yielding breeds
 Can conquer
machine to increased
 Expensive Machine
diseases
farm productivity
.  Pest and DIseases
 Suitable climate and soil

condition

 Tissue Culture .

Technology

 Availability of labor
66

CHAPTER VII
STRENGTHS – WEAKNESSES – OPPORTUNITIES – THREATS ANALYSIS

A. INPUT SUBSYSTEM

STRENGTHS

 Availability of all varieties

The varieties of Abaca (Manila hemp) in the Philippines is widespread since it is

originally cultivated here. As of now, there is a 200 varieties of Abaca that are

cultivated in Luzon, Visayas and Mindanao.

 Availability of other inputs

Such as sucker, corm and tissue culture are widespread and can be easily found

in every region. The most common planting input that are used in planting Abaca

is the corm, because it is less bulky and will easily germinate. For tools and

equipment in planting or harvesting Abaca is available in every agri-handyware.

For labourers, many farmers are shifting in producing abaca because of it’s in

demand status in domestic and in abroad.

 Available technologies and new stripping machine to increase farm productivity

The availability of technology is fairly distributed by the government with the strong

participation on PhilFIDA and other public and government institutions. This

technology help the farmers to easily finish their work and have an increased

production, and increasing the production of high quality fibers and processing by

small scale local industry creates job opportunities, offers access to new markets,

and increase the income of farmers and laborers. This portable machine, however,
67

weighs 93 kilograms including the 2.6 kW (3.5 Hp) gas engine and can process

114 kilograms of dried fiber per day.

 Suitable climate and soil condition

Abaca has been found growing in virtually all types of soils and climate in the

Philippines. But it is found most productive in areas where the soil is volcanic in

origin, rich in organic matter. Loose, friable, and well-drained, clay loam type. The

good things about abaca it is very adaptable to the climate and soil condition. The

abaca pH rate is 4.0 – 8.0 but grows best on neutral or slightly alkaline soils. Abaca

requires warm and humid climate for optimum growth and productivity. Though the

optimum temperature requirement for abaca has not been fully determined, it

grows in areas with temperatures of 20°C during cool months and 25°C during

warm months. A relative humidity of 78 to 85% and a fairly-distributed rainfall

through-out the year are conducive to good growth. The area must be free from

cyclonic winds and typhoons, if not the plants must be provided with cover trees or

windbreaks to dissipate the force.

 Tissue Culture Technology

Tissue culture help the input supplier in producing more Abaca plant. And it is not

just simply Abaca –it is disease-free and hybrid that help the farmers to minimize

their cost in applying fertilizer and any diseases and pests measuring control. It will

not just increased the quantity of the Abaca production but also its quality, it will

became strong and high graded when it is processed.


68

 Availability of labor

Because of widespread and rapid demand of Abaca domestically and globally,

many farmers shift to producing Abaca plant or product instead. This give as a

wide ratio of farmers available at our service.

WEAKNESSES

 Instability of fertilizer’s price

The instability of fertilizer’s price are due to the fluctuation of oil price and other

economic industry that are directly affected the price of fertilizer and even the

pesticide / insecticide.

 Lack of access to disease-resistant high yielding breeds

Insufficient available disease-free planting materials is also another problem in

some rural areas.

 Machine

Not all farmers can afford to buy machines. Smallholder farmers are just engage

in traditional planting and harvesting of the abaca which result to low production

and low quality of the fiber.

OPPORTUNITIES

 Development of disease free high yielding materials.

After many years of research and field tests, researchers from the University of the

Philippines Los Baños (UPLB) led by Dr. Antonio G. Lalusin were able to develop

high yielding and ABTV-resistant abaca hybrids. These hybrids are more
69

vigorous, could produce a yield of 1.56 mt/ha/yr, and give 20-30 percent higher

fiber recovery than traditional varieties.

Since traditional varieties are very susceptible to the dreaded ABTV disease, the

new resistant hybrid abaca of UPLB is considered very promising in rehabilitating

abaca plantations affected by the ABTV disease.

The high yielding and ABTV-resistant hybrids project is an R&D initiative under

PCAARRD’s Industry Strategic S&T Plan for Abaca. Specifically, it is expected to

contribute in achieving a higher fiber yield from 0.527 mt/ha to 1.2 mt/ha and

increased fiber recovery from 1 percent to 1.5% percent by 2020. The project on

abaca production is a collaborative work among UPLB, Visayas State University,

University of Southern Mindanao, Bicol University, Western Mindanao State

University, University of Southeastern Philippines, Caraga State University, and

Catanduanes State University.

Currently, the research team is now mass producing and promoting the use of

hybrids in major abaca producing provinces such as Sorsogon, Catanduanes,

Leyte, Southern Leyte, Northern Samar, Western Samar, Davao Oriental, Davao

del Sur, Surigao del Sur, and Sulu. Once fully commercialized, 1,568 hectares of

abaca farms is targeted for rehabilitation out of the project.

By rehabilitating abaca farms with high yielding and virus-resistant hybrids,

PCAARRD and its partners hope to usher more and better opportunities for the

local farmers, processors, and other industry stakeholders. Through the adoption
70

of these UPLB hybrids, the government aims to ease the plight of poor abaca

farmers and help improve their income and social status.

 Increasing input price

Because of its popularity inside and outside the Philippines, the demand for Abaca

is increasing, which result to increased production and higher demand of inputs to

plant or use in Abaca. This give the opportunity for the input supplier to produce

more.

 Can conquer diseases

Because of the advance technology and presence of different measuring controls,

the spreading of the disease will be controlled earlier and avoid high damages.

 Pest and Disease

The pest and disease infestation of abaca farms in the region has significantly

affected fiber production. This worry the farmers to engage in abaca because of

its susceptibility to diseases. The Abaca Bunchy Top virus and other disease that

has been present in several parts of the region, which is resulted to the

unproductive of abaca farmers, therefore reducing the earnings of our farmers.

This causes increased production costs and significant economic losses to abaca

farmers. The Fiber Industry Development Authority (FIDA) and other institutions

that are concerned with the abaca industry initiated various programs and projects

to control the widespread of the abaca bunchy top and abaca mosaic diseases

caused by viruses. The National Institute of Molecular Biology and Biotechnology

(BIOTECH) at the University of the Philippines at Los Banos (UPLB) developed a

technology in the form of diagnostic kit wherein the virus is detected early enough
71

even if symptoms are not yet manifested in the plants. The gain from abaca virus

diagnostic kit is the guarantee of propagating good quality planting material and

the resulting increase in crop yield and income. This will give an opportunity to the

supplier in producing more inputs like fertilizer, pest and insecticide, herbicide and

many more.

THREATS

 Increase of inputs’ price

Because of the increasing demand of Abaca’s input, marketers who engaged in

selling commercial chemicals sells their product at highest price, this discouraged

the farmers –especially the small farmers –to engaged in Abaca production.
72

B. FARM SUBSYSTEM

STRENGTHS WEAKNESSES OPPORTUNITIES THREATS

 Help reduce  Low adoption of  Lower cost labor  Typhoon and other

unemployment rate of recommended  Increased demand of calamities

the country technology Abaca  Possible entry of

 Superiority of Abaca  Lack of horizontal  Presence of Disease and Pest of

over other fibers collaboration processors Abaca

 Many uses of Abaca increase the cost of  Supporters by

 Intercropping transactions. various country

 Largest producer  Farmer’s lack of

knowledge
73

B. FARM SUBSYSTEM

STRENGTHS

 Help reduce unemployment rate of the country

It will help some unemployment people to engage in abaca by training them and

giving them land to cultivate provided by the government. Abaca, known worldwide

as Manila Hemp, is an economically important crop indigenous to the Philippines,

being the lifeblood of more than 200,000 farming families from 56 abaca growing

provinces in the country. It is one of the country’s major pillars in terms of

employment generation and foreign exchange earnings. The industry sustains

more than 1.5 million Filipinos who, directly or indirectly, depend on it for a living.

Direct dependents include abaca farmers, classifiers/sorters, manufacturers,

traders, exporters and hundreds of fibercraft processors who provide employment

to thousands of Filipinos.

 Superiority of Abaca over other fibers

Abaca fiber is superior over all other natural fibers because of its great strength

and its resistance to the action of water. Considered the strongest of all natural

fibers, it is three times stronger than cotton.

 Many uses of Abaca

The abaca fibers are used in the production of handicraft products such as fashion,

table-top and decorative accessories, furniture, garments, textile, packaging

material, plaything for pets and sports paraphernalia.

Abaca fibers are also used in pulp-making which are used as raw materials in the

production of currency and bank notes, tea bags, Bible paper, coffee filters, meat
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casing, coating for pills, surgical caps and masks, high capacitor paper. Cable

insulation papers, restoration and conservation of historical documents, adhesive

tape paper, lens tissue, carbonizing tissue, abrasive base paper, mimeograph

stencil base paper, weather-proof Bistol, maps, chart, as a strengthening material

for napkin and tissue paper; insulation for computer chips, etc.

 Intercropping

Intercropping with other crops especially leguminous with not just caused

additional income to the farmers but it will also give excess nutrients to the soil

needs of fertility.

It has been reported that intercropping abaca plants with leguminous plants leads

to increased yields as they provided shade effect besides enriching the soil with

nitrogenous fertilizer by the symbiotic nitrogen fixers associated with their root

nodules. Integration of abaca plants into rainforestation systems or intercropping

with coconut trees in former monoculture plantations will have a significant

contribution in the prevention of soil erosion, flooding, and sedimentation in coastal

areas. In addition, the local biodiversity will be protected and even rehabilitated

providing habitat for endangered species.

 Largest producer

Philippines is the world's largest producer of abaca fiber, accounting for about 85%

share of the global production in 2013. In the Philippines, abaca plants are

cultivated across 130 thousand hectares of land by over 90 thousand farmers.

Abaca fiber is primarily used as a raw material by end user industries such as pulp

& paper, fiber craft, cordage, etc. Abaca fiber consumption in Philippines is
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witnessing a continuous increase among these end user industries due to widening

applications of the fiber.

WEAKNESSES

 Low adoption of recommended technology

Low technological capacity and lack of access to providers/services to improve

agronomic practices, reduce incidence of insects and diseases However, the

marketing system is also faced with several problems that hinder the industry’s

development. One such problem or weakness is the difficulty in dissemination

information on new technologies to improve abaca production such that the

innovations do not reach the farmers. Consequently, the farmers are stuck with

antiquated production and postharvest facilities and know-how, which causes the

marketing, particularly the post-harvest cost to increase.

 Lack of horizontal collaboration increase the cost of transactions.

Weak capacity to organize themselves into structured groups and lack of trust

between and among farmers, this will result to low price of abaca fibers and

opportunity of the middle men.

 Farmer’s lack of knowledge

Some farmers are lack of idea about the latest technology use in Abaca and lack

of technical training on the fibre stripping process which result to low quality

production and appropriate grading of fibre. And there is an underlying problems

in terms of technology and appropriate for the culture and technology of the local

farmers. From the producer/farmer/stripper, the abaca fiber is sold at an "all-in"

basis to the barangay dealer. At this stage, fibers are sold ungraded due to farmers’
76

general lack of knowledge of the grading/classification system. The fiber goes

further to the town/city dealers. To some extent the farmers sell directly to

exporters/grading and baling establishments (GBEs). In some cases, farmers'

cooperatives/associations have a direct link to domestic processors

OPPORTUNITIES

 Lower cost labour

Because of it high production and demand for the abaca, many businessman

engaged in abaca production which resulted for generates employee especially to

the farmers, this case the rate of employment rises and lower the rate of cost in

labour.

 Increased demand of Abaca

The sturdy fiber is also a top export commodity of the country with an average of

US$80 million annual export earnings. In global trade, it boasts of high demand as

raw material for cordage, textile, handicrafts, and specialty papers.

 Presence of processors

This will minimize the burden of the farmers if they worry about who will processed

their Abaca, because not all farmers had a machine to process it to fiber. It will

also exhilarated their work in producing more Abaca.

 Supporters by various country

The Abaca is needed worldwide, and because of its importance, some of the

countries are investing their money in developing the Abaca further, the main

supporters are the USA, Germany and Japan –this three countries need the abaca

for their automobile and some hard materials needed for innovating their products.
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THREATS

 Typhoon and other calamities

In Southeast Asia, the Philippines is among the hardest hit by natural disasters,

particularly typhoons, floods and droughts. These natural disasters have negative

economic and environmental impacts on the affected areas and the people who

live there. Furthermore, the agriculture and natural resources sectors are highly

vulnerable because they are directly exposed to natural disasters and their

unwelcome consequences. An analysis of the impacts of typhoons, floods and

droughts on agriculture, food security and the natural resources and environment

of the Philippines will help bring further to light the nature and extent of these

effects. For an economy largely dependent on agriculture and its natural resources

and environment. Some planters of abaca was established in the plantations that

are already old, disease infected and damaged by typhoons. The good example

of this is the Yolanda Typhoon which had destroyed 7,642 hectares of abaca

farms, affecting the livelihood of 4,399 farmers. Affected areas accounts 17

percent of 45,000 hectares of farms devoted to abaca farming in the region.

 Possible of Disease and Pest of Abaca

Although they are available of all measuring controls of Abaca in the market, their

still some of the farmers that cannot easily treat their affected Abaca plant because

of lack of financial especially to those small farmers.


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C. PROCESSING SUBSYSTEM

STRENGTHS WEAKNESSES OPPORTUNITIES THREATS

 Availability of  Lack of  Many uses of abaca  Presence of

technology used in marketing/promotional finished product abaca substitute

processing support  Technological  Production of

 Many products  Not well inform of Development cheaper products

 Many uses of Abaca technology use  High demand of of/in China

 Presence of many processed products

underutilized

Processors
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C. PROCESSING SUBSYSTEM

STRENGTHS

 Availability of technology used in processing

All technology and machine use to processed the Abaca into different products are

available in the Philippines. In 2007, FIDA and the Philippine Center for

Postharvest Development and Mechanization (PHilMech) signed a Memorandum

of Agreement on the joint commercialization of the FIDA spindle stripping machine

and the multi-fiber decorticating machine for abaca, pineapple, maguey and

banana. With a market in sight for abaca fiber, they are now encouraged to take

seriously abaca production. And with the use of modern technologies like the

abaca mobile spindle stripping machine, the road from abaca farm to the market

is made easier and faster.

 Many products

Abaca fiber is primary used as raw material by end user industries such as pulp

and paper processors, handicraft/fiber craft and cordage manufactures. The fibers

are used in the production of handicraft products such as fashion, table-top and

decorative accessories, furniture, garments, textile, and packaging material,

plaything for pets and sports paraphernalia.

 Many uses of Abaca

Abaca has many uses. Aside from fiber, it has many food values. Abaca leaves

are used as growing material for mushroom. Coconut extract may be used

as soap as it can heal psoriasis.The flower of abaca may be used as hamburger

material. Roots may be converted into fertilizer and feeds. The roots of abaca are
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of primary shallow root compared to hardwood trees which have deep roots. These

may be uprooted more easily and may be chopped down to be made into fertilizer

and feed.

Other products are electrolytic condenser paper, high grade decorative paper,

Bible paper, coffee filter, meat and sausage casings, special art paper, cable

insulation paper, adhesive tape paper, lens tissue, mimeograph stencil base

tissue, carbonizing tissue, currency paper, checks, cigarette paper, vacuum

cleaner bag, abrasive base paper, weatherproof bristol, map, chart, diploma paper,

nonwovens, and oil blotting paper.

 Presence of many underutilized Processors

The presence of Pulp Mills, Cordage Manufacturers, Fibercraft Producers and

Processed product help the processor to identify if they are still actors playing in

the industry. The presence of processors identify that the commodity is still needed

in the industry.

WEAKNESSES

 Lack of marketing/promotional support

Abaca processed in domestic are being neglected by some consumers. This cause

a downfall production of processed product in local. And the lack of the marketing

information of the farmers of the current price trends.

 Not well inform of technology use

Some rural areas that are engage in Abaca production are not well inform on some

of the newly technology that can easily help us to produce a stronger and high

quality fiber and product of Abaca.


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OPPORTUNITIES

 Many uses of abaca finished product

The newest material of choice for today’s modern car is not some sophisticated,

reinforced metal but one of the oldest fibers in use, one that’s a favorite for

dashboards and car interiors — the once-lowly abaca, associated more with ships,

and farms, and with our money bills.

Just recently, abaca found its niche in the automobile industry as the “strongest

natural fiber material” for dashboards and car interiors, according to the

Department of Science and Technology, which is backing a multimillion program

to revive the abaca industry, both for local application across many sectors and as

a top export product.

It is also used to manufacture specialty paper sheets used in the production of

currency or bank notes, electrolytic condenser papers, filter papers, tea bags, meat

casings, disposables, cigarette paper and non-woven products, among others.

Abaca pulp is used in strengthening facial tissues, table napkins, diapers and

recycled papers. Abaca fiber, valued for its strength, flexibility, buoyancy, and

resistance to damage in saltwater, is chiefly employed for ships’ hawsers and

cables, fishing lines, hoisting and power-transmission ropes, well-drilling cables,

and fishing nets. Some abaca is used in carpets, tables, fabrics, mainly used

locally for garments, hats, and shoes.

The Philippines is considered one of the world’s biggest suppliers of abaca

products, with exports valued at about $100 million annually.


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 Technological Development

Researcher from different universities and colleges and even the outside country

are developing a technology that will help the processors to exhilarate their work

in producing more abaca finished products.

 High demand of processed products

The product is known worldwide as the “Manila Hemp”, with the Philippines as the

top producer and exporter. Demand for processed product are in demand not only

in domestic but also abroad. The cordage and craft or yarn are in demand in

Germany.

THREATS

 Presence of abaca substitute

Available cheaper substitutes (e.g., sisal, Ecuadorian abaca) and other

products that are mainly came from China.

 Production of cheaper products in/of China

Technological advances and breakthroughs which make possible production

of cheaper substitutes whether from natural or synthetic based materials

processed products.
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D. MARKETING SUBSYSTEM

STRENGTHS WEAKNESSES OPPORTUNITIES THREATS

 Lack of market  Demand for abaca  Dominance of spot


 Internationally known
insurance fiber for pulp transactions
 World Supplier
 Poor quality of abaca production exceeds  Chinese imitation of
 Stable Marketing
fiber among small- supply. the abaca product
Flow
scale farmers  Increasing the world  Ecuador

 Environmental-  Assembly/ Marketing price of Abaca competitiveness

friendly
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D. MARKETING SUBSYSTEM

STRENGTHS

 Huge demand for local and export market for abaca fiber

Because of its many uses and fiber, Abaca is the most exported fiber of the

Philippines, with its rate of 80%.

 Accessibility of farm to market road

Republic Act 8435 or the Agriculture and Fisheries Act of 1997 mandates the DA

to be on top of FMR projects. The DA leads the “construction, restoration, and

rehabilitation of infrastructures like irrigation systems, post-harvest facilities, and

farm-to-market roads (FMRs),” in partnership with the Department of Public Works

and Highways (DPWH) and local government units (LGUs).

 Internationally known

Abaca, known internationally as Manila hemp, is grown primarily for its fibers. One

major factor that makes the commodity highly competitive in the market compared

to other natural hard fibers is its quality. The fibers of Abaca are utilized as raw

materials in the pulp and paper, cordage and twine, yarns and threads, and

fibercraft business.

 World Supplier

The Philippines provides 83.4% of the world supply of fiber. The Abaca industry

contributes US$80.6 million every year to the Philippine economy (Biolife, 2005),

making it one of the major source of income for Filipinos.


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 Stable Marketing Flow

The production and collection process of abaca fiber is being organized. As the

market chain maps shows in the marketing subsystem, the region’s abaca chain

routes leading to top abaca fiber users. These are the abaca pulp mills which

consumes 89% of the region’s abaca fiber production, the cordage manufacturer

which consumes 10% and fibercraft processor which consume 1%. Abaca farmers

in the region have several channels where they can sell their products to. There

are abaca farmers who sell directly to abaca fibercraft processor. However, most

of the farmers abaca produced are sold via abaca traders operating within their

localities.

 Environmental-friendly

The very durable nature of abaca is not the only quality of this natural fiber that

makes it in demand in the market. Its environment-friendly, biodegradable nature

makes manufacturers, especially those in Europe, to use abaca over synthetic

fibers. Coffee cups and tea bags are among the products that make use of abaca.

These food containers highlights abaca fiber’s sanitary nature. Many European

institutions had already adopted a policy of turning away from non-biodegradables

like plastics.

WEAKNESSES

 Lack of market infrastructure

Government price and trade policies have distorted economic incentives, and the

choice of policy instruments used have promoted rent seeking and raised the

economic cost of government interventions. The lack of market infrastructure,


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underinvestment in agricultural research, distortions in land markets due to the

agrarian reform program, and other weaknesses in governance have all

contributed to the poor performance of the sector.

 Poor quality of abaca fiber among small-scale farmers

Because of some farmers’ lack technology, they produced fibers that are poor

quality and some of the problem they encountered is the limited supply of desired

quality fibers that are demand of some countries. The low productivity of abaca

farms in the Philippines has been attributed to use of poor quality of planting

materials and disease incidence. Viruses such abaca bunchy top, abaca mosaic,

and abaca bract mosaic are the top three diseases affecting abaca farms.

 Assembly/ Marketing

Limited marketing support for abaca-based semi or finished products in the

Philippines are so poor, people nowadays preferred the product outside because

it much cheaper than the processed product of Abaca.

OPPORTUNITIES

 Demand for abaca fiber for pulp production exceeds supply.

Despite the “global supplier of abaca” title, 80% of the country’s security/specialty

paper requirement is imported. Demand for abaca pulp, in particular, is expected

to rise further as more manufacturers shift to more sustainable raw materials for

their products. Exports of abaca pulp, the biggest gainer, surged 131.1 percent to

7,862 metric tons in January to March 2014 from last year’s 3,689 MT. Top

importers during the period include the US, Germany, the UK and Japan.
87

Abaca pulp shipments were valued at about $25.81 million, up by more than 80

percent from the $14.18 million in the comparative period.

Abaca fiber exports soared 87.7 percent to 15,130 bales in the first quarter from

8,062 bales a year earlier. Top importers of Philippine-grown abaca fiber were the

UK, Japan, China, Indonesia and India.

 Increasing the world price of Abaca

The value of abaca pulp shipped out to other countries also rose by 64% to $51.1

million from $34.8 million recorded in January to August 2013. Earnings from

cordage and fabrics also went up by 18 percent and 21 percent, respectively.

Abaca products exported to the country’s major markets in Asia reached 24,574

bales in January to August 2014, a whopping 428-percent improvement from 4,654

bales recorded in 2013.

THREATS

 Dominance of spot transactions

Formation of market linkages that does not permit close collaboration between

players contributes little to systemic upgrading of the chain. Dominance of spot

transactions stifles innovation and results to weak supply chain governance

 Chinese imitation of the abaca product

Although the Philippines was fortunately able to maintain its lead in raw abaca

exports, China’s tweaking of Filipino designs of abaca designs have become a

headache for handicraft exporters. According to a trade player, the Chinese were

able to imitate and mass-produce the once expensive Filipino abaca-made

handiworks that flooded big US stores such as Macy’s. The insider also revealed
88

that China doesn’t just “pirate” the designs but they pirate the Filipino designers

and with their cheap labor and inexpensive production costs, Philippine abaca

made items are now rendered uncompetitive.

 Ecuador competitiveness

Despite the very bright prospects, the Philippine abaca—who once dominated the

global fiber world in the early 1900s to 1970s—found itself stalled from stiff

competition waged by Ecuador for raw materials and China for abaca-based

products. According to the Philippine Council for Agriculture, Forestry and Natural

Resources Research and Development (PCARRD) Ecuador almost stole the

export market in 2000 as it accounted for 40 per cent of the shipments while the

remaining 60% came from the Philippines. These figures are not too narrow which

showed the local abaca’s vulnerability. Moreover, the country’s export rate at that

time was 0.2 per cent while Ecuador is already enjoying a 2.3 per cent rate. FIDA

shares that the country’s low yields was the foremost problem of the sector due to

use of mixed varieties, lack of disease-resistant planting materials and postharvest

facilities and fragmented research and development. Oddly, Ecuador sources its

plants or abaca raw materials from the Philippines.


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E. SUPPORT SUBSYSTEM

STRENGTHS WEAKNESSES OPPORTUNITIES THREATS

 Foreign groups  Lack of credit for the  Free trainings and  Corruption

interest in supporting small farmers programs  Poverty

abaca  Higher interest of


 Global Market
 Presence of borrowing

Research Institution  Limited access to

 Availability of long term financing in

Government small farmer

Assistance  Technology requires

 Availability of credits special processing

for large scale farmer


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E. SUPPORTSUBSYSTEM

STRENGTHS

 Foreign groups that are supporting abaca

Interest of corporate investors in abaca outside the Philippines are calling or

helping the farmers anywhere in this world to engage in producing Abaca fiber.

 Presence of Research Institution

PhilFIDA is known for its support to fiber together with Philippine Textile Research

Institute and Department of Science and Technology (DOST), they are giving a

different free-disease varieties of Abaca to the farmers, and training them to

attained competitiveness to the market world and helping them understand the

different technological development.

 Availability of Government Assistance

Because of its unique and strong fiber, the government are funding the abaca

research and development to further in planting or in processed. The Unlad MPC

(Multi-Purpose Cooperative) also plans to increase skilled abaca strippers, provide

more livelihood for the members, and develop consumer products from abaca

fiber.

 Availability of credits for large scale farmer

Government Institution like Landbank are giving a credit to farmers and some

private institutions, this will help the farmer to have an initial input to their business

or farm in abaca production or plantation.


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WEAKNESSES

 Lack of credit for small farmers

Not all farmers can afford to have a credits because of their qualifications.

Individual farmers lack of access to credit, which restricts their ability to purchase

the mechanical fibre stripping machines that would allow them to sell their fibres

for a higher price. And lack of access to credits often forces farmers to sell their

fibres ungraded in order to obtain cash to cover their immediate living expenses.

 Higher interest of borrowing

Some institution are offering for loan or credits but only some can afford it because

of its higher rate of interest.

 Limited access to long term financing in small farmer

Only big holders of Abaca can enjoy the financial access because some

smallholder farmers can’t afford to pay the interest in the future

 Technology requires special processing

Some technology requires a bigger machine to be processed which worry the of

the processors to engage in this industry

OPPORTUNITIES

 Free trainings and programs

Government institution like the PhilFIDA are supporting farmers through training

them and giving them a machine that can enhance their ability in production and

processing.
92

 Global Market

As competition for leadership in abaca production tightens, the government takes

on the challenge of stepping up the game in the global market and keeping pace

with other rising abaca producing countries. PCAARRD’s commitment to

agriculture will be showcased by the Council when it participates in the National

Science and Technology Week with the theme, “Philippines: A Science Nation

Innovating for Global Competitiveness,” from July 24-28 at SMX Convention

Center, Mall of Asia, Pasay City. PCAARRD adopts the theme Strategic Industry

Program for Agricultural Growth (SIPAG) ni Juan to bolster PCAARRD’s

commitment to agriculture, the first of eight outcomes which DOST focuses on to

help achieve sustainable national development via science and technology.

THREATS

 Corruption

Corruption are widespread disease of the people, and because of that mostly all

people are affected. The fund that are for the farmers are being corrupted by some

of the officials. Governments’ agencies who distributed free-disease hybrid Abaca

are instead of giving them free, the officials who hold that projects are selling them

to the farmers.

 Poverty

Poverty is the result of the corruption, this happen to the farmers who work hard in

make a honest life but their money (or income) are being corrupted and this threats

should be gone or minimize as far as possible for us to participate in world market.


93

CONCLUSION AND RECOMMENDATION

Conclusion

Based on the study conducted, we can clearly say that the abaca is one of the

important commodity playing in the industry. It will not only provided the basic necessity

of the human but also give an identity of the country in the market world.

As a major staple not only in the country but in the whole world make this a great

opportunity of those who want to undergo business in particular agricultural commodity.

The rapid demand and supply of the abaca products is the indication that abaca business

would be successful in the long run. Giving all the uses and products processed it will

give as an insight how abaca is important and study this can strengthen the production of

our current abaca production.

Recommendation

After analysing the abaca commodity system some strategies have been derived based

on the SWOT analysis. The researcher recommend the following:

In Input subsystem, the PhilFIDA must enlarged their attention in providing support

for the production and distribution of disease free high-yielding abaca planting materials

The price of fertilizer should be address also, but when the farmer use the tissue culture

abaca, the uses of fertilizer and pest will be lessen to impossible. And to keep up the

strength, the farmers, technological innovators and researcher should produce more

inputs and improvise it to be a better output of abaca, tissue culture should be practiced

in every region to minimize the cost of fertilizer or pesticide/diseases used. Input supplier

should grab the opportunity to produce more inputs especially when the price for abaca
94

is still increasing, they should also developed more disease free high yielding materials

to conquer the possible disease that will attack the abaca. The pest and disease

infestation of abaca farms in the region which significantly affected fiber production, this

will give an opportunity to the supplier of inputs (i.e. fertilizer, pesticide, herbicide and etc.)

to produce more because of increasing numbers of farmers engaging Abacas’ production.

And because of widespread demand for Abaca, price of input also increased, this threat

discouraged some farmers to engage in this production –and mostly of them are small

scale farmers. To address this problem, the government should put a price margin, this

will limit the supplier to put their price above the price’s margin, and the industry will work

with service providers (enablers) to improve the delivery of agriculture extension services

that will trained the farmers to practice the pest management to minimize the usage of

chemicals to the plants.

In Farm subsystem, to adopt the recommended technology, the Development of

community-based should providers/ trainers on sustainable farming practices and

enterprise management including delivery and financial sustainability schemes that focus

on training the farmer of the new technology and strategic method this will help the

farmers to use the technology to achieve a best quality fiber and better management. For

the lack of cooperation and collaboration among individual smallholders they should form

a union like the coconut plantation, this will the help farmers and strippers to overcome

high transaction costs and better negotiate with buyers. Because buyers generally prefer

to source from organized groups. The farmers’ lack of knowledge of modern technology

should be address to the agricultural extension to pay attention to some areas that

modern civilization is not introduce, this will help the production of Abaca in its high quality
95

yielding breeds. The best strength of the abaca is the superiority of it to others fiber, this

give a famous identity that abaca fiber should be reproduced more and must be improve,

this will also help the Filipinos to have a maintained employment because the abaca will

be successful in a long run. And because of its demand status, and the active presence

and participation of the processors of abaca, the producers or supplier should grab the

opportunities to engage in this business, especially when it is increased in demand all

over the world. To cope up the threat that were cited by PCARRD that hinder the

development of abaca include the use of outdated planting techniques instead of the new

technologies, peace and order situation in some areas, stronger typhoons and the rapid

expansion of abaca production in neighbouring countries. They should be a monthly or

quarterly seminar that should be held in every region for the farmers to be aware of the

new technology, new strategies in minimizing pest and disease and how to cope up with

the calamities and typhoon.

In Processing subsystem, the lack of marketing promotional support, the

government should provide marketing / promotional support through sponsoring fibercraft

operators in regional, national and international trade exhibits and support marketing

through the use of social media (internet websites, facebook and etc.,) and also upgrading

or improving products designs and packaging. And some processed product required a

special technology, this give the role of DOST in providing the latest and updated

technology for the farmers and processors. The people involved in processing should

take advantage of the abaca commodity, this will give them an innovative ideas in how to

compete with other latest product that are not made from abaca, the abaca –as the

strongest fiber –overpass all of the existing fiber in the world. They should grab the
96

opportunities of the existing abaca’s technological development and other finished

product of abaca that are in demand domestically and globally. To cope up with the

threats of other substitute fiber that cheapest and available in the market especially the

imitations product of China’s Abaca, the government should put fund in improvising the

abaca products by way of advertising and research and development.

In Marketing subsystem, the government should give an incentives to the farmers

or producers of abaca in term of underinvestment agricultural research and market

infrastructures because Abaca boost our marketing identity to the market world, they

should give incentives for the farmers to be motivated –especially the small farmers. As

the abaca was internationally known as Manila Hemp, this will give an opportunities for

the producers or suppliers to put their products to the nest level –that is exportation, this

will give them opportunities to be players in the market world as this abaca commodity is

increasing the demand in pulp and other processed product. This will give the producers

or supplier to generate higher income because of its demand status, environmental-

friendly fiber and stable marketing flow. The government and the abaca players should

watch out the threats that will greatly affect them in business, to solve this issue, the

Department of Trade Industry should limit the imported products from different country

because this will result to decreasing demand for local products, not only abaca but some

of the Filipino’s products.

For the Support subsystem, there should be an individual agencies for small

farmers’ loan that are scattered in every region. This will help the farmers to engage in

abaca plantation because they will have a separated credit loan to some governments’

bank. The higher interest will be minimize and the farmers will not be encourage in
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producing or engaging in abaca commodity. The government should take their full support

in improving and building and research and development institution that will help not only

the farmers but also the researchers of abaca. Credits should be maintained with a low

interest possible. Another weakness is some of the innovative ideas need special

processing technology to be made, and this required a fund or support to the government

or any sector that can help for this to be established Government and other private

institution are handling seminars in helping the producers and supplier to improve their

products in abaca, they should grab this opportunities for them to engage in this

increasing global markets of abaca. The threats should be address and cope up is the

presence of the corruption and poverty should. Government and some private investors

should be more attentive in identify the people they putting their money in abaca

commodity innovations, because nowadays the issue of corruption are widespread which

greatly affected the poverty of the people.

Overall, the government and other agencies who supported the Abaca Plantation

should focus their attention in the Support Subsystem because that is the root of all

problems and threat that should be minimize to gain a high standard and high quality of

Abaca domestically and internationally and this give us opportunity to produce different

products that will trend in the next generations.


98

REFERENCES

Books and Journal


DELA PEÑA-RODRIGUEZ, Mary Grace. “Supply Value Chain and Benchmarking
Analyses of the Coconut and Abaca Industries in Bicol Region” 2008.

PERALTA, Peralta G. Economics of Abaca Production and Symposium. 1972 pp 23.

PAHIT, Resfel Ailyn T. “Pahit’s Abaca Farm in Barangay Katugasan, Agusan del Norte,
Cabadbaran City”. A Feasibility Study 2015.

ABACA. “Improvement of Fiber Extraction and Identification of Higher Yielding Varieties”.


Technical Report. 2009.

DR. LALUSIN, Antonio. “Abaca Breeding for a More Reliable Philippine Abaca Industry.”
Annual BSP-UP Professorial Chair Lecture. 2010.

Journal of Environmental Science and Management. “Life cycle assessment of Manila


Hemp in Catanduanes, Philippines”. Edition 18(2): 53- 61(December 2015) ISSN
0119-1144.

Internet Websites

Abaca: The Philippine fiber


http://nstw.dost.gov.ph/?p=713 DR: 2/24/16

The Philippine Abaca Industry Activities


http://www.unido.org/fileadmin/import/48269_Activities_in_Philippines.pdf

Government to weave roadmap for silk production


http://www.philfida.da.gov.ph/index.php/2015-03-05-01-16-56/news-articles/archived-
articles/40-government-to-weave-roadmap-for-silk-production

The Philippine Abaca Industry: Status, Market Potential, Priority Issues and Directions
http://journals.uplb.edu.ph/index.php/AAERB/article/download/46/44
99

PCARRD-DOST Portal - Abaca, Volume of Production, 2006-2010


http://www.pcaarrd.dost.gov.ph/home/joomla/index.php?option=com_content&task=vie
w&id=2103&Itemid=748

Fiber Utilization & Technology


http://www.philfida.da.gov.ph/index.php/2015-03-25-01-35-58/2015-03-25-01-38-00

Sectoral Statistics _Agriculture


http://nap.psa.gov.ph/ru5/secstats/agri.html

Programs and Project


http://www.philfida.da.gov.ph/index.php/transparency/2015-03-05-01-21-45

ABACA Grading-Baling Establishments


http://www.philfida.da.gov.ph/index.php/2015-03-05-01-16-56/2015-05-13-01-44-
59/2015-06-23-02-53-22/2015-04-06-07-54-36

ABACA Trader-Exporters
http://www.philfida.da.gov.ph/index.php/2015-03-05-01-16-56/2015-05-13-01-44-
59/2015-06-23-02-54-57/abaca-trader-exporters

Research and Development


http://www.philfida.da.gov.ph/index.php/2015-03-25-01-35-58/2015-03-25-01-36-28

Abaca Shipment
http://www.philfida.da.gov.ph/index.php/2015-03-05-01-16-56/news-articles/archived-
articles/30-abaca-shipments-reached-47m-in-january-april
100

APPENDIX A

MALACAÑANG
Manila

PRESIDENTIAL DECREE No. 1208

CREATING THE ABACA INDUSTRY DEVELOPMENT AUTHORITY

WHEREAS, the Philippines is the leading producer and exporter of abaca fiber in the
world;

WHEREAS, there exists an unstable world market for abaca fiber subject to volatile price
fluctuations;

WHEREAS, abaca farmers are shifting to other crops in view of an unstable market for
their products;

WHEREAS, an orderly and stable market is necessary for the maintenance and growth
of the abaca industry;

WHEREAS, it is Government policy to provide adequate assistance to the agricultural


sector in line with the national objective of increasing agricultural production and boosting
exports;

WHEREAS, the foregoing considerations make it desirable to have one agency to


regulate abaca production, processing, distribution, sale, transport and storage;

WHEREAS, since the abolition of the Abaca Corporation in 1970 and the abolition of the
Abaca and Other Fiber Development Board in 1972, there has been no single government
agency in charge of the integrated development of the abaca industry;

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue


of the powers vested in me by the Constitution, do hereby decree and order the following:

Section 1. Creation of the Abaca Industry Development Authority. The Abaca Industry
Development Authority, hereinafter referred to as the AIDA, is hereby established and
attached to the Department of Agriculture for the purpose of promoting the accelerated
growth and development of the abaca industry in all its aspects. AIDA shall rationalize the
research, production, processing, and marketing of abaca, and provide continued
leadership and support for the integrated development of the industry;

Section 2. Transfer of Functions. All functions and all powers of the Bureaus of Fiber
Development and Inspection Service (BFDIS) of the Department of Trade pertinent to the
abaca industry except for grading and inspection functions are hereby transferred to the
AIDA. Such transfer shall include the corresponding balances of appropriations, records,
101

equipment, properties and such personnel as may be necessary, Provided, That the
Bureau of Fiber Development and Inspection Service (BFDIS); shall henceforth be
renamed Bureau of Fiber and Inspection Service (BFDIS); Provided, further, That the
AIDA, through its Board, shall effect the transfer herein provided in a manner that will
ensure the least disruption of non-going programs and projects.

The Abaca Production and Development Program (APDP) is hereby transferred from the
Department of Agriculture to the AIDA, together with all corresponding balances of
appropriations, records, equipment, properties and such personnel as may be necessary;
Provided, That the AIDA through its Board, shall effect the transfer herein provided in
manner that will ensure the least disruption of ongoing programs and projects.

Section 3. Board of Directors. The powers and functions of the AIDA shall be vested in
and exercised by a Board of Directors which shall be composed of the following officials
or their representatives:

1. Secretary of Agriculture Chairman


2. Secretary of Trade Member
3. Chairman of Board of Investments Member
Secretary of Local Governments and Community
4. Member
Development
5. Governor of the Central Bank Member
6. Governor, Development Bank of the Philippines Member
7. President, Philippine National Bank Member
8. A representative of the abaca producers Member
9. A representative of the abaca traders Member

The President shall appoint the representative of the abaca producers and traders upon
recommendation of the Secretary of Agriculture and they shall hold office for a term of
three (3) years unless sooner removed for cause or until their successors shall have been
appointed and qualified.

The members of the Board from the government sector, if unable to attend a Board
meeting, may designate their respective alternates whose acts shall be considered the
acts of principals.

The members of the Board shall elect a Vice-Chairman who shall act as Chairman in case
of the absence, inability or temporary incapacity of the Chairman; Provided, That in the
102

absence of the Chairman and Vice-Chairman, the Board shall elect a temporary presiding
officer.

The members of the Board may receive per diems per meeting actually attended at such
amount to be fixed by the Board, but not to exceed one thousand pesos per month.

Section 4. Organization. The AIDA is empowered to determine and create its


organizational structure in order to achieve its objectives, including the number, positions
and salaries of its officers and employees. The Board shall create the positions of
Administrator, Deputy Administrator or Administrators, and such other subordinate
officials as may be required. The Board shall appoint all the officers of the AIDA, establish
a compensation scheme including allowances and benefits, working hours and other
conditions of employment as it may deem proper, discipline and/or remove for cause
employees, and exercise such other powers over its personnel as may be necessary for
the efficient operation of the AIDA.

The management of the AIDA shall be vested in an Administrator to be appointed by the


Board who shall have the following functions and powers:

(a) To direct and manage the affairs and business of the Authority in accordance
with policies enunciated by the Board;

(b) To establish and maintain, upon approval by the Board, an organization with
specific functions and responsibilities for each operating unit;

(c) To perform such other duties as may be assigned to him by the Board from
time to time.

Managerial and technical personnel shall be specifically exempt from OCPC and Civil
Service requirements.

Section 5. To carry out the objectives and purposes mentioned in Section 1 of this
Decree, the AIDA, through its Board, shall have the following powers and functions:

(a) Formulate and implement in cooperation with related agencies, integrated


programs and comprehensive policy guidelines for the accelerated development
of the industry as a whole;

(b) Regulate research, production, processing, and marketing of abaca in both the
domestic and the international markets when necessary;

(c) Establish a monitoring system for the assessment of the abaca supply and
demand situation, both domestic and worldwide;

(d) Negotiate and enter into contracts for the export of abaca under such terms
and conditions as it may deem reasonable when necessary;
103

(e) Negotiate and enter into contracts for shipping facilities necessary for the export
of abaca including the purchase and/or charter of vessels when necessary;

(f) Establish and maintain storage facilities for abaca in the country or in major
foreign markets whenever such facilities are deemed necessary;

(g) Establish and administer a price scheme and maintain a stockpile of abaca
when necessary to stabilize prices for the benefit of abaca farmers in the country;

(h) Promote and undertake research in abaca in coordination with the Philippine
Council for Agriculture and Resources Research and other appropriate agencies
with a view to expanding the production, utilization, processing, marketing of abaca
for domestic and foreign uses;

(i) Borrow from local and international financing institutions, and issue bonds and
other instruments of indebtedness, subject to existing rules and regulations of the
Central Bank and the Department of Finance, for the purpose of financing
programs and projects deemed vital and necessary for the early attainment of its
goals and objectives;

(j) Formulate and recommend for adoption by financial institutions, credit programs
to support research, production, processing, and marketing of abaca;

(k) Formulate and recommend for adoption by other agencies and


instrumentalities, such programs and projects as may be found necessary to
accelerate industry development;

(l) Enter into, make and execute contracts of any kind as may be necessary to
achieve the objectives of the AIDA;

(m) Receive and administer funds provided by law and draw, with the approval of
the President, funds from existing appropriations as may be necessary in support
of its programs, and to accept donations, grants, gifts and assistance from all kinds
of international and local private foundations, associations, or entities, and to
administer the same in accordance with the instructions or directions of the donor,
or in default thereof, in the manner it may, in its discretion determine;

(n) Invest and deal with the funds of the Authority, in order not to make such funds
idle and unproductive pending their full utilization for the principal objects and
purposes for which the AIDA has been organized;

(o) Obtain complete access to all pertinent information on the operations of the
industry.
104

Section 6. Power to Issue Rules and Regulations to Implement Decree. The AIDA is
hereby authorized to issue or to promulgate rules and regulations to implement and carry
out the purposes and provisions of this Decree.

Section 7. Appropriations. For the fiscal years 1977 and 1978, all unexpected and
unprogrammed appropriations out of funds already stipulated for abaca development
from the appropriations of the Bureau of Fiber and Inspection Service of the Department
of Trade and all unexpended funds, programmed and unprogrammed, appropriated for
the Abaca Production and Development Program of the Department of Agriculture are
hereby transferred to the AIDA.

Any provision of existing law to the contrary notwithstanding, AIDA may impose fees or
receive grants, subsidies, donations, or contributions from any entity and retain such
funds for its operation.

Section 8. Separability Clause. The provisions of this Decree are hereby declared to be
separable, and in the event any one or more provisions are held unconstitutional, the
validity of other provisions shall not be affected.

Section 9. Repealing Clause. All laws, decrees, acts, executive orders, ordinances, rules
and regulations which are inconsistent with the provisions of this Decree are hereby
repealed, amended or modified accordingly.

Section 10. Effectivity. This Decree shall take effect upon approval.

Done in the City of Legazpi this 8th day of October in the year of our Lord nineteen
hundred and seventy-seven.
105

APPENDIX B

DETERMINING ABACA GRADES


106

APPENDIX C
ABACA PARTS DISTRIBUTED
107

APPENDIX D

PROCESSING ABACA

Fiber to Fabrics (Handloom Process)

Fiber to Fabrics (Powerloom Process)


108

Fiber to Pulp
109

Fiber to Crafts
110

APPENDIX E
INCOME GENERATE
(Refer to the Table 5)

a/ Provides P15 increase in basic pay.

b/ Granted P5 &P10 under WO No.16 & P2-P8 increase in the basic pay upon

effectivity; integration of the remaining P10 & P15 COLA effective Jan.1, 2016.

c/ Granted P14.00 increase in basic pay in the Non-Agri (micro) and Agriculture (Non-

Plantation to be given in two tranches;P7 upon effectivity & P7 on Dec. 1, 2015.

d/ Granted P9.00-17.00 increase in basic pay for retail/service establishments

employing less than 10 workers.

e/ Granted P15.00 wage increase in the basic pay for all regions in two tranches: P8

upon effectivity & P7 effective May 1, 2016. Granted P20 increase in basic pay for

retail/service establishments with less than 16 workers in Aurora province; P10 upon

effectivity & P10 effective May 1, 2016.

f/ Granted P12 increase in the basic pay for workers receiving below P267) and P13

SEA for workers receiving above P267

g/ Integrated the P5 COLA into the basic pay & granted P5-P30 increase in basic pay

to be given in four tranches

h/ Granted P5.00 and P12.00 increase in basic pay.

i/ Granted P11.50 wage increase

j/ Granted P13 increase in basic pay within Metro Cebu and P10 for all sugar mill

workers

k/ Integrated the P15 COLA under WO No. 16; P6 Increase in basic pay for R/S
111

employing 10 workers & belwo upon effectivity; and P14.50 increase in basic pay for the

Non-Plantation sector to be given in two tranches: P7.50 upon effectivity & P7 effective

May 1, 2015

l/ Granted P13 wage increase.

m/ Granted P12 wage increase

n/ Granted P11 increase in basic pay upon effectivity & P5 COLA effective Dec. 1,

2014; integrated the P15 COLA under WO No. 17 into the basic pay.

o/ Integration of P10 to P14 COLA under WO No. 17, into the basic pay and granted P5

COLA effective Jan. 1 2015 and P3-P4 basic wage increase due to simplification of

industry classification.

p/ Granted P5 incre4ase in basic pay & P5 COLA upon effectivity for workers in

Agricultural Plantation and Non-Plantation and R/S employing 10 or less; effective May

1, 2015, P5 increase in basic pay & P5 COLA for Agriculture Non-Plantation and R/S

employing P10 or less; effective September 1, 2015, P5 increase in basic pay & P5

COLA for Agriculture Non-Plantation and R/S emplying 10 or less.10

q/ Granted P5 and P15 per day wage increase for Non-Agriculture and Agriculture

sector respectively.
112

APPENDIX F
ABACA INDUSTRIAL PLAYER

FARMERS 75,000 abaca farmers

800,000 dependents

STRIPPERS 50,000 strippers/farm workers

500,000 dependents

700 traders

TRADERS 30 trader-exporters

20 Grading-Baling Establishments (GBEs)

5 pulp mills

PROCESSORS 6 cordage manufacturers various fibercraft manufacturers

Generally, the abaca industry is made up of six major groups of industry players:

farmers, strippers, classifiers, traders, fiber exporters and processors/manufacturers. All

the players, except farmers, are required to secure a permit from FIDA.
113

APPENDIX G

ABACA KEY PLAYERS


114

APPENDIX H

THE ABACA’s PRODUCT


115
116

APPENDIX I
ABACA’s FLOW OF EXPORTATION
117

This commodity study is presented by NASIBAH B. MACADATO under the supervision of DR. NIDA A. ILUPA
a faculty member of the Department of Agribusiness Management, College of Agriculture, Mindanao State
University-Main Campus.