2. NATIONAL SITUATION
 7.7% or 2.9 million of 37.3 million in the labor force
were unemployed as of Jan. 2012
 30.3% or 11.3 million were under-employed during that
year

3. Mass Poverty
•24.9% of Filipinos were considered poor in 2013
•Over 70% of poor families are in rural areas.
•Coconut-producing provinces are where poverty
incidence is high.

4. Exodus to urban centers &
overseas in search of jobs
• Urban congestion
• Traffic problem
• Mounting garbage
• “Squatter” housing problem
• Criminality, etc.
• Loss of farm hands=farm labor
scarcity=high rural labor costs=high
production costs=low farm revenues


5. Prognosis
If unemployment and under-employment in the rural areas are not
effectively addressed,
 purchasing power of majority is bound to get lower and lower in view of
inflation, resulting in declining capacity to buy basic consumer items.
 with low purchasing power of the majority, the economy is bound to
contract, resulting in contractions of company operations and, thus,
labor downsizing.
 poverty incidence and exodus to urban centers and overseas (and to
CPP-NPA folds) are bound to intensify, resulting in continuing urban
problems, rural insurgency, and loss of farm hands, thus endangering
national food security.

6. What Can Be Done?
Our alternative:
SUNRISE PROGRAM
(SOLVING UNEMPLOYMENT & UNDER-
EMPLOYMENT THRU RURAL
INDUSTRIALIZATION & SOCIAL
ENTERPRISES)

7. Focal resource: Coconut
 It is our most abundant resource
 68 of our 81 provinces are major coconut producers
 3.5 million hectares are planted to coconut across the country (BAS,
2010p)
 There are 341 million fruit-bearing trees nationwide (UCAP, 2010)
 The country produces more than 14 billion nuts per year (BAS).
 Over 20 million people depend on coconut directly and indirectly for a
living
 The country remains a top supplier of coconut products to the world
market
 Coconut is a versatile resource that can be processed into an array of
highly marketable products

8. Brief Industry Situationer
 Rural markets for raw coconut is dominated by monopsonists (single
buyers) and oligopsonists (few buyers) who control prices.
 Small coconut farmers share the least in value chain: 40% of CNO;
11% of VCO; no wonder then that small coco farmers rank among the
poorest in Philippine society.
 Coconut oil into which copra is principally processed faces stiff
competition from cheaper palm oil.
 But coconut can be processed into highly marketable products into
which palm oil can never be converted: VCO, skim milk, coco flour,
coco sugar, coco coir/geotextile, coco water energy drink,
oleochemical.

9. Focal Coconut Products:
• VCO
• Skim milk
• Coco flour
• Biodiesel Coco juice/energy drink
• Coco vinegar
• Coco coir
• Coco peat
• Geo-textile
• Granulated charcoal
• Coco gas

10. Our Program Proposal
Program Objectives
 Improved rural employment and income opportunities;
 Increased household incomes for coconut farmers; and
 Reduced rural poverty incidence.

11. Program Strategy:
Reengineer the Philippine Coconut Industry
such that:
 A shift in raw material trade from copra to whole nut occurs, thereby enabling
farmers to production costs associated with copra-making, in effect raising their
revenues through a pricing scheme for whole nuts equivalent to copra (i.e.,
prevailing copra price/4).
 An integrated processing system capable of producing the target products under
one roof is adopted, thereby attaining economies of scale and allowing the small
coco farmers to sell direct to the processing plant.
 Social enterprises, so-called as these are co-owned by farmers and eventually
operated by them thru their coop or federation, are established around the
processing of coconut by-products as husks, coco shells, coco water, coconut
toddy or sap, enabling them to share in the profits.

12. Program Components
This strategy shapes the following components of SUNRISE:
1) Rural Industrialization
 Set up integrated coconut processing plants across 68 major coconut
producing provinces to serve as direct buyers of whole nuts and to
process the meat into VCO, skimmed milk, coconut flour; the water into
energy drink; and coco shells into granulated charcoal and coco gas to
energize the main processing plants.
 Set up social enterprises, co-owned and eventually operated by farmers
through their coop or federation, to process the husks into coir fiber, coco
peat, and geo-textile/coconets, thereby creating rural employment and
income opportunities.

13. Program Components…
2) Farm Management
 To secure the supply base of main processing plant, enter into Farm
Management Agreements (FMAs) with participating coconut farmers thru
their coop or federation, allowing the SUNRISE project to:
 co-manage the farms according to recommended cultural practices;
 implement necessary applied technological trainings for
participating farmers.
3) Interim Project Management
 Integrated coco processing is relatively a new system. To raise the
chances of SUNRISE projects to survive, stabilize and grow, there is a
need for professional management in the interim of no more than 5 years.

14. Program Components…
4) Research & Development
 This component seeks to continually improve on product quality,
including improvement on the basic processing machineries and
equipment.
 This component will be coordinated principally with DOST.

15. Priority Program Areas
The Program will be implemented in all 68
coconut producing provinces.

16. Investment Areas
1) Rural Industrialization
 Main Processing Plants to process VCO, coco flour,
skimmed milk, coco water, granulated charcoal (their
number will depend on capacity design and number of
fruit-bearing coconut trees in the locality).
• Capital costs (plant sites, ite development,
machineries, plant buildings, delivery vehicles, etc.)
• Working capital (raw materials, direct labor,
operating expenses)
• Pre-operating expenses

17. Investment Areas
(continued)
2) Social enterprise development
 Primary Processing Centers to process husks into coco
coir, cocopeat, geotextile (their number will depend on
capacity design and number of fruit-bearing coconut trees
in the locality).
• Capital costs (plant sites, ite development,
machineries, plant buildings, delivery vehicles, etc.)
• Working capital (raw materials, direct labor,
operating expenses)
• Pre-operating expenses

18. Investment areas:
3) Research & Development
 Capital costs
 Meetings/conferences

19. Investment areas:
4) Farm Management & Institution-
Building
 Farmers’ trainings
 Capacity-building for partner farmers’
coop
 Salaries & benefits of Farm
Technicians

20. Investment areas:
5) Interim Project Management
 Operating expenses (salaries & benefits,
other operating expenses)

21. Mechanics of
Implementation
Piloting
• The Program is proposed for implementation
beginning with a pilot project. For this purpose,
the San Pablo plant of Mr. Ding Princena,
currently under advanced stage of completion,
is proposed as a KAANIB Coconut agro-
Industrial Hub Project under a toll processing
scheme.
• The plant will have a daily capacity of 75,000
kilonuts (kln) per day. At 45 kln/tree/year, this
would require a supply base of 500,000 fruit-
bearing coconut trees, or 5,000 hectares.

22. Mechanics of implementation:
Replication
 Should the pilot experience warrant, the project shall be
implemented on a wider scale a year after.

23. Investment Requirements of
Pilot Project
item Cost Funding Source
Princena PCA
Capital outlay- 25,890,000
Land dev’t 5,000,000
Buildings 2,490,000
Machineries & equipt. 7,100,000
Vehicles 7,100,000
Training facilities 2,000,000
Office equipt., furniture &
fixtures 550,000
Working capital (lease
deposit, direct, indirect
costs)
67,776,123
Pre-operating
Expenses
2,800,000
Total 96,466,123

24. Economic Justifications:
1) Employment Generation: Pilot Plant
 Item Direct Workers Indirect Total
 Main processing plant 96 43 139
 Coir processing 18 4 22
Total 161
Note: Figure does not include employment associated with
harvesting, gathering & transport to consolidation center which
are paid for by the central processing plant.

25. Economic justifications:
2) Projected Returns to the Social Enterprises
PRIMARY PROCESSING CENTERS: Projected Net Income
1 SOCIAL ENTERPRISE (SE)
Per day P41,159
Per month P1,028,983.05
Per year P12,347,796.61

26. Economic justifications:
3) Central Processing Plant (processor of VCO, coco water,
skimmed milk, coco flour, granulated charcoal)
Projected Net Income
Per day 4,107,946
Per month 102,698,656
Per year 1,232,383,873

27. Economic justifications:
4) Returns to the Farmers Per 100 Trees Per Year
Incremental farm family net benefit
Year 1 P6,480
Year 2 P8,480
Year 3 onwards P10,480

28. Economic justifications:
5) Multiplier Effect
The Multiplier refers to the number of times an investment is multiplied before making
its total impact on the national economy. An important element of the Multiplier is
the concept of Marginal Propensity to Consume (MPC), or the percentage of extra
income that goes to consumption expenditures. Since the national average savings
is around 20%, we can safely assume an MPC of 80%.
How the Multiplier operates is easy to understand. Assuming an 80% MPC and an extra
income of Ph1.00, 80 centavos earned by consumer A is spent on consumption and
is received by consumer-businessman B. Consumer B also spends 80% of 80
centavos and goes to consumer-businessman C. And the same process goes on
and on. To shorten this process, the Multiplier formula was devised, as follows:
 Multiplier = 1 (investment) = 1 = 5
(1-MPC) (1-0.80)
Therefore, total impact on the economy is:
Original investment of Php96,466,123 x 5= Php482,330,615

29. Conceptualized by:
PHILFARMS, Inc.
Thank you…