DBP extends credit line to seaweed firm

The Development Bank of the Philippines (DBP) has extended an initial P5-million revolving credit line to Sitangkai-based exporter Sitexports, giving the seaweed industry of Tawi-Tawi a needed boost.

Extended under the One Town One Product (OTP) window, Sitexports will use the DBP credit line to boost its working capital and increase trade with importers from France in behalf of the seaweed farmers of Sitangkai, Tawi-Tawi.

Sitangkai, one of the poorest towns in the Philippines, is the single biggest source of seaweeds in the country, accounting for half of the country’s total production.

Sitexports is bullish on growth prospects of the industry considering the growing demand for seaweed in the world market.

Seaweed is processed to produce carageenan, a major component in the manufacture of food products such as gelatin.

Carageenan is also used in the manufacture of toothpaste and in the pharmaceutical industry for coating medicine.

Because seaweed can only grow in clean water, Sitangkai enjoys a comparative advantage over other areas in the Philippines,  and is in a unique position to take advantage of the growing global demand for carageenan.

Due to growing demand, Sitexports’ deliveries to France have recently increased from 80 metric tons a month to 120 metric tons despite the doubling in the farmgate price per kilo of raw, dried seaweeds.

These developments augur well for the people of Sitangkai and the rest of Tawi-Tawi who rely heavily on seaweeds for their livelihood.

The loan signing and check release with Sitexports is scheduled for June 12 in Zamboanga City as part of the festivities marking Independence Day.

In addition to the DBP credit line, Sitexports has also availed  of guarantee financing worth P4.5 million through the Promoting Rural Industries and Market Enhancement program of the Philippine Development Assistance Program which is supported by the Canadian International Development Agency (CIDA).

The guarantee financing for Sitexports is administered by MASS-SPECC, a Mindanao-wide secondary cooperative federation.

“The check turnover of both DBP and PDAP is a symbolic gesture of Philippines — Canada development cooperation for the development of Mindanao, particularly for the Autonomous Region of Muslim Mindanao,” said PDAP executive director Jerry Pacturan.

He added, “it will also manifest PDAP’s role in facilitating the access of rural industries to mainstream financing institutions like DBP.”

Pacturan noted that when PDAP started to assist Sitexports in 2006, the price per kilo of raw, dried seaweeds was about P25. Now it sells at between P40 and P50 a kilo, thus increasing the income of seaweed farmers.

PDAP has also been instrumental in the formulation of the Sitangkai Seaweeds Industry Master Plan, a medium-term development plan that will increase the income of seaweed farmers and improve their standard of living.

The master plan calls for the increase in the seaweed production area in Sitangkai, dubbed the Seaweed Capital of the Philippines, from 2,500 hectares to as much as 10,000 hectares by 2010.

It also envisions an increase in total seaweed production from 3,000 metric tons a month to 27,000 metric tons, resulting in an increase in average farm income from P60,000 to P300,000 a year.