Transforming the Cagayan Freeport
Transforming the Cagayan Freeport
By: Bernie Cahiles-Magkilat - Manila Bulletin
I do think that Atty. Raul L. Lambino is a full-blooded politician, but no, he is not. He is just working in politics all the time and behind every big politician either as the technical or tactical legal person.
Last year, Lambino finally got an official government position as the administrator and CEO of Cagayan Economic Zone Authority, operator of the Cagayan Special Economic Zone and Freeport.
Early on, Lambino implemented drastic reforms at CEZA and at the Freeport as he pushed his ambitious innovations to make this remote and poor region, but home to some of the finest unspoiled natural beauties of Luzon’s extreme northeast, to become the country’s most modern at par with the world’s best cities.
It may take decades to accomplish his vision, but this voracious reader and a one-time golf junkie is paving the way for a sustainable high-tech Cagayan.
“I am more of a technical and legal person,” says Lambino, who drafted several bills and legislations in both Senate and the House.
Lambino started joining political sorties in 1984 when as a student leader at the College of Law at the University of Pangasinan, where he graduated magna cum laude, he was asked by Fabian Sison to help in his political campaign. “Prior to that, I was just a fence-sitter,” says Lambino, who considers Sison his first real mentor.
What followed was a series of engagements in the realm of politics.
The snap elections in 1986 found him involved with then President Cory Aquino’s camp. In 1987 he was appointed officer-in-charge of the provincial board making him one of the youngest youth leaders of his time at the age of 28.
He served as chief of staff and legal counsel of former House Speaker Joe De Venecia. He also worked with the PDP Laban and was very active in the Lakas NUCD’s party during the campaign for then presidential candidate Fidel V. Ramos.
He also served as consultant and drafted the ecological bill of Sen. Loren Legarda. In 2005, he was asked by then President Gloria Arroyo to become a member of the Constitutional Consultative Commission.
The only time he ran for public office was in 2010 as a filler candidate to the senatorial line-up under then presidential candidate Gilberto Teodoro.
Lambino seemed to enjoy the company of politicians from both camps or it is the other way around.
He has always been behind GMA, describing her as “really capable, competent and soft-hearted person.”
“In 2010, when she was no longer in power and no one wants to be associated with her, I was asked to join her legal team,” says Lambino. He served as a spokesman of GMA’s legal team, earning him more than 5 years of media exposure, answering all sort of questions.
“We stood our ground,” says Lambino citing the cases they won in favor of the former lady president.
Two years before the 2016 presidential election, he was among the so-called Rody’s “Champs”, the group who convinced the Davao City mayor to run for the highest office of the land.
He never had any direct official government position ever until he was appointed as chief of President Duterte, who was looking for a leader who can run and stop the corruption at the freeport.
When he consulted former President Arroyo on his appointment, he was advised, “It is not wise to refuse the President.”
The position comes with the rank of a cabinet. Last year, Duterte appointed him as presidential adviser for northern Luzon.
“I was really honored,” said Lambino.
The task of rebuilding CEZA is a difficult one, but given his wide experience of dealing with the bureaucracy, he was confident, “I could possibly go my way through the maze and labyrinth and obstacles across my way.”
With him at the helm, the freeport bounced back mightily. From a negative P80 million when he came in, they registered P800 million after a year and able to collect P100 million from taxes and P30 million from Customs duties. They are about to remit P150 million in income dividends to the government.
CEZA is now ISO-certified. “There is no red tape, we work faster and all processes transparent,” he declares.
Lambino made clear his resolve to give the agency a clean, squeaky image — that “CEZA does not, and will never tolerate, condone or encourage smuggling or wrongdoing of any kind at the Freeport.”
First, he transformed the landscape of online gaming. Where before only two firms had the immense power of playing god — being the Cagayan Freeport’s master licensors for online gaming — Lambino dismantled the duopoly with one masterstroke: He changed the rules.
Online gaming became a rules-based operation.
He led CEZA in cracking down on illegal online gaming, cancelling the registration of 58 Inter-Active Gaming Licensees as well as those of 77 Business Process Outsourcing firms that served as their back offices.
In 2018, the President and several ranking government officials watched a bulldozer and backhoe rolled over several rows of Porsches, BMWs, and Benzes plus a collector’s Maserati, GT3, Alpina B12, Opel Manta, Renault R5 and an entire fleet of Hummers, and Lamborghinis, Land Cruisers, and Harley Davidson big bikes that had passed through Port Irene illegally and impounded in Sta. Ana, a grim reminder of the Freeport’s past as the entry-port for high-duty contraband items.
CEZA also cracked down on illegal online “sabong” operations and Fintech firms found to be offering and trading cryptocurrencies without a CEZA license.
Lambino ordered check on the financial probity and integrity of Fintech firms that initially applied as Principal Licensees for blockchain and virtual currency trading.
The route to recovery and his formula to perk up growth at the economic enclave in Sta. Ana could not be less than pioneering.
Lambino unveiled the cryptocurrency initiative that he fittingly christened “Crypto Valley in Asia.” It was a low-profile move, but the innovation set off a rush of cryptocurrency and fintech firms, applying with CEZA as Principal Licensees for blockchain and virtual currency trading.
This despite CEZA’s high ceiling for the initial investment to be made by the licensed exchanges just to locate their permanent offices in Santa Ana: $1 million in investment, $100,000 in application fees and $150,000 in license fees plus $50,000 in probity checks and another $50,000 in integration costs.
At the end of 2018, a total of 25 offshore fintech (financial technology) firms were given Principal Licenses by CEZA. Every exchange, once given the license to operate, had to put up a minimum of P2 billion in investment.
“What these licensed exchanges will find at the Freeport is a haven where they can design and gestate their financial technology innovations — and we are going to be partners in building the future of Fintech,” says Lambino
“CEZA is creating an ideal atmosphere that will inspire the best minds of the young generation and the world’s leading cryptocurrency companies to engage in the development of the next wave of technological breakthroughs.”
The most ambitious project Lambino is implementing and one that perhaps would firmly cement his legacy in this emerging major growth enclave in Northern Luzon is a $4.5 billion new satellite city encompassing 500-hectares southwest of Sta. Ana dubbed “City Polaris”.
It is a proposed joint venture between LongRunn Capital Pte. Ltd., a Singapore-based real estate investor and developer, and a leading local property development and global entertainment firm — First Cagayan Leisure Resorts Corporation, Asia’s online gaming industry pioneer.
“City Polaris” is a master-planned city by a well-known Italian company Mercurio Design Lab” and financed by LongRunn Capital. The modern city will be built to compete with the best in Asia and the world, with six-star hotels, iconic architecture, competition golf courses, water theme parks, movie theme parks, cyberparks and the latest amenities and innovations.
Construction of the 500-hectare mega project will begin this year and barring any delays, inauguration is slated sometime in early 2021.
“We have never imagined in our lifetime a project of this magnitude and scale,” says Lambino.
LongRunn Capital has lined up other major investments in the Freeport in joint venture with Cagayan Premium to develop, expand and modernize the Cagayan North International Airport (CNIA) with a multi-story passenger terminal, modern facilities and MRO services, a power and water plants and a new regional airline company.
In mid-2018, CNIA received the long-awaited International Civil Aviation Organization certification and accreditation by the International Association of Travel Agencies, clearing the last hurdle for it to go into full commercial operation.
“With an airport code and a spot in the global travel map. CNIA can now operate international flights. Cagayan province, not only CEZA, is entering a new age,” says Lambino.
Sta. Ana itself is poised to become the country’s next major beach destination. Shanghai’s Juncheng Supply Management Group is pouring $100 million into the municipality to put up an integrated resort.
“This is one of the few unspoiled spots in Luzon that will cater to the sun worshipper, the nature lover, and the adventurer,” says Lambino.
Juncheng Group, which counts among its varied operations the production of high-performance lithium batteries, also wants to go into local steel production.
China’s Zhejiang Guannan Group, the world’s leading apparel manufacturer, is set to break new ground this year for “green” textile production and real estate development in the zone with $100 million initial investment.
To boost health care not just for tourists and locators but also for the entire Northern Luzon population, a Slovak firm is stepping in to build a modern hospital.
Two Chinese companies, one engaged in train technology and the other in global finance, entered into agreements with CEZA to establish a hub in the Zone dedicated for the development and production of Maglev (magnetic levitation) trains, the world’s fastest floating trains. For the initial R&D effort, Hunan Goke Maglev Technology Development Ltd. of Changsa City and Hong Kong-based Eminova Asset Management Ltd. are putting up $1.5 billion in investment.
A $30-million investment made by the Taiwan Electronic Company-EV will usher in the production of electric vehicles in support of the agency’s advocacy of green technology.
CEZA gave Converge Information and Communications Technology Solutions the green light to install underground fiber optic cable and an aerial distribution network to secure a digitally enabled special economic zone.
Port Irene will undergo a major facelift and dredging of its navigational canal and mooring waters. San Vicente port will also be rehabilitated to allow cruise vessels to berth while also boosting facilities for inter-island services.
These will benefit Palaui Island, one of Top Ten best beaches in the world by CNN Travel, and Nangaramoan beach.
From the scraps CEZA will build, in Lambino’s term, a “Memorial of Transformation.”
It was a year of a moral rebirth in the agency and a turnaround in its revenues — a dramatic, but hardly surprising development.
His “Crypto Valley in Asia” project launched only in May with little fanfare has caught on. Within six months, it generated the bulk of CEZA’s revenues for the year, contributing P456.347 million to its coffers. This time, CEZA was able to pay its corporate tax to the Bureau of Internal Revenue in the amount of P83.317 million and from a measly collection in 2017, the Bureau of Customs got a hefty share of P31.482 million in 2018.
CEZA doubled its previous output beyond the 179 percent mark, registering P636.296 million, a new agency record in total revenues.
This year, CEZA’s shares from the daily transactions of 23 Offshore Virtual Currency Exchange Principal Licensees and two Regular Licensees are expected to overflow its coffers.
Admirably, Lambino has provided the right stimulus package to attract foreign investors to the zone.
CEZA is not only attracting hard investments, but it also hosted various events in Sta. Ana. When Typhoon Ompong cut a trail of devastation across Cagayan, CEZA deployed a quick-response team that lost no time attending to the needs of calamity victims.
“We stopped online gaming but we do some innovative approaches on the investments,” adds Lambino.
He listens to his staff, saying, “There is no such thing as monopoly of knowledge, I have imperfections.”
“I don’t need to be micro-manager. I give full trust and confidence to my senior managers and staff,” says Lambino, who learned from his MBA that getting competent people is the best way to do the job. CEZA people work as a team, considering that most of his staff are in Cagayan province and they operate 24 hours a day, seven days a week.
“I treat all my staff as member of the CEZA family,” he adds.
“Every day is a learning experience there are pressures from within and outside and expectation is very high and detractors are very active so you should know how to watch your side, front and back,” says Lambino.
A voracious reader, Lambino reads all kinds of books. He tries to finish two books a week, one fiction and one on international politics and economics.
“I am old fashioned, I buy books in bookstore,” says Lambino, who always value books as the most precious gifts.
Among his idols, he looks up to President Duterte.
“Don’t just believe… I know him to be a very decent person with flowery words. I know he respects our religion so much,” adds Lambino, who as a boy, served as a sacristan.
“I have a very strong faith,” says the devout Catholic.
He also considers FVR, GMA, Mahatma Gandhi, Dalai Lama and the Pope as very good inspiration and great leaders of the world.
Despite his sterling achievements in just one year at CEZA, Lambino says he has yet a long way to go.
But yes, he dreams to transform the skyline of Cagayan to make it into something modern like Tokyo or Shanghai.
“It would be impossible to accomplish this dream even in a decade or two, but we have started planting the seed for tomorrow,” he adds.
No lofty goals for himself, “I would just like to be remembered as a person who tried my best to raise my family and be the best father to my kids.”
It is his fervent hope that the Philippines and Filipinos will have a brighter future.
“This is the only place we can call our own so we have to help, share and sacrifice,” he concludes.
Photo by: ManilaBulletin