BASCO—In 2006, Batanes was able to achieve what most local government units in the country aspire—the absence of poverty among its citizens.

Official poverty statistics for 2006 released this year reveal this archipelagic province in the northernmost part of the country registered a zero percent poverty incidence. Poverty statistics for the years 2000 and 2003 showed that Batanes consistently landed on the ten least poor provinces.

Batanes, the country’s smallest province in terms of population and land area, registered a 10.4 percent and 6.3 percent poverty incidence among families during 2000 and 2003, respectively.

Batanes governor Telesforo Castillejos said the zero poverty incidence could be attributed to the fact that almost all Ivatan families engaged in farming, and therefore has assured source of food. “Almost all the families have a piece of land to till.”

Difficulties of linking with neighboring provinces and the unpredictable weather, said the governor, have taught the Ivatans to be self-reliant. “Our mentality is we cannot always depend on the outside [mainland] especially when the seas are unnavigable so we have to go farming,”

“Even government officials and employees here are involved in farming,” the governor added.

Despite a huge number of families involved in farming, the province's agriculture sector was not able to take off and maximize its potential due to weather and transportation problems. Tess Castilejos, provincial trade and industry official, said that these problems have discouraged the farmers from planting more crops so they can trade with other provinces.

“They only produce [agricultural products] to be self-sufficient,” DTI’s Castillejos told abs-cbnNews.com/Newsbreak. The DTI official also said that lack of access to market has hampered the growth in agricultural production.

Cottage industries dominate

Like agriculture, the business sector in the province remains small and is limited to cottage industries and micro-enterprises. Most of the thriving businesses in the province are cottage industries and they have accounted for almost 50 percent of the registered business for the past three years. (See table)

    *Figures represent new businesses and renewals    Source: DTI-Batanes

“Local demand is small because of the small population,” said Milagros Rimando, National Economic and Development Authority (NEDA) director for Region 2. Batanes has 15,974 inhabitants as of August 2007.

Small local revenues

Meanwhile, Rimando said the province’s finances are heavily dependent on its share in the national taxes or the internal revenue allotment (IRA). According to Governor Castillejos, Batanes has a budget of P153 million for 2008. Of this amount, P147 million comes from the IRA allotment while P6 million will come from local revenues.

The small amount of local income may be traced to the fact that local government units in Batanes have little capacity to generate revenues due to absence of big businesses and industries.

Batanes has six municipalities; all of them belong to low income brackets. The capital Basco, and the island municipalities of Itbayat and Sabtang are fifth class municipalities, which means their average annual income ranges from P10 million to less than P20 million. Three other towns—Mahatao, Ivana and Uyugan—are sixth class municipalities and have an average annual income of less than P10 million.

Few job opportunities
 
Lack of big businesses also resulted in limited employment opportunities for the Ivatans. Data from the provincial social welfare and development office showed that the government is the biggest employer in the province, next to agriculture and fisheries. As of February 2007, 2.182 or 70% of the 7,151 income earners are employed by the government.

This lack of employment opportunities, however, is driving most of the educated Ivatans to look for greener pastures elsewhere. Governor Castillejos added that a lot of the Ivatans have gone into the mainland. “We are suffering from brain drain.”

“Around 60-70 percent of the graduates leave the province and most of them do not come back anymore,” the governor said adding that they hope that some BPO companies would locate in Batanes to help stop the exodus of their educated people. (See Sidebar: BPOs in Batanes?)

Flagship products

Some Ivatans who stay in the province complement their income from by making the province’s export and flagship products. Among these products are turmeric or yellow ginger powder, mineovaheng or blackened sugar came juice, garlic chips and bits and handicrafts.

Some of these products are identified as one-town-one-product (OTOP) of the Batanes municipalities. Mineovaheng, which has been a commercial product since 1980s, is the OTOP of Uyugan. Turmeric is the flagship OTOP of Mahatao. Ivana, meanwhile, pins it hope in marketing its garlic chips and garlic bits. DTI’s Castillejos said these products have become popular among people who have high blood pressure.

DTI’s Castillejos said that these products are of export quality but they were not able to bring it to other countries because of the lack of clearance from the Bureau of Food and Drugs. “BFAD analysis costs around P30, 000 and that’s a big amount to small entrepreneurs in the province.”

The DTI official also said the local government units in the province should consider earmarking funds that would help boost the potential of most of these products.

Handicrafts, too

Another small but thriving business in the province is the handicrafts industry. Irene Gonzales, the pioneer in the handicrafts industry in the province told abs-cbnNews.com/Newsbreak that this business started in the 1970S but became stronger in the 1980s.

“The tourists are our major market but we have been receiving orders from Metro Manila,” Gonzales said adding that small fans and hats made of nito and native raw material bayasbas are among the best sellers.

“In the products of Batanes, you can see the passion for perfection,” said DTI’s Castillejos.

The industry, however, cannot meet the demand of some companies because of lack of workers. DTI’s Castillejos said some handicraft maker turned down the request of a German in 2001 to produce 5,000 hats a month because they could not meet it. Gonzales said that a worker can only finish 2-3 hats a day.

The DTI official said most handicrafts businesses are family-owned and have around 3-5 workers. She added that Ivatans considered handicrafts as a hobby and a way to augment their income since their main concern is farming to have a stable supply of food. “People must have a fallback when the seas are unnavigable.”

This is the second of  a three-part series on the province of Batanes.

(Disclosure: The author is among the journalists who visited Batanes during a media appreciation seminar sponsored by NEDA.)