Circular

^ <; ■^- • 1908

\l-^^

Government of the Philippine Islands.
Department of the Interior.

BUREAU OF FORESTRY— CIRCULAR NO. 2.
Manila, P. I., May 28, 1908.

USEFUL INFORMATION CONCERNING PHILIPPINE

PUBLIC FORESTS AND POSSIBILITIES FOR

THEIR EXPLOITATION.

Although the future prosperity of the Philippine Islands depends
mainly on their agricultural development, yet it is generally recognized
that the proper exploitation of the extensive Philippine forests will add
exceedingly to the future prosperity and also aid greatly in agricultural
development.

More than one-half of the land area of 120,000 square miles in the
Islands is forested; that is, covered with a tree growth. Of the 60,000
square miles of forest, 40,000 square miles are in the more thinly settled
Islands of Mindoro, Samar, Palaw^an, and Mindanao, or about 80 per
cent of their total area.

It must be admitted, however, that large parts of this timbered area
can not be considered commercial forest by lumbermen. Scattered stands
of small unmerchantable trees and inaccessible mountain forests cover
considerable areas. Estimating conservatively, there are 25,000 square
miles, or 16 million acres, of timber which can and will be exploited on
a reasonably large scale. An average yield of 2,500 l)oard feet of mer-
chantable timber per acre on this area is a conservative estimate, giving a
total supply of 40 billion board feet. The total annual cut in the Islands
is now less than 50 million feet or only about one-eight of 1 per cent of the
probable supply. This cut is an insignificant item of the annual growth
in these forests. The forests under conservative treatment should furnish
an annual supply of at least 400 million feet of mature timber and be
improved by so doing.

The timbers in the Islands include a great variety ranging from
Pine and Calantas, or soft tropical cedar, to the extremely heavy
and hard Dungon and Mancono. In general, Philippine woods are
hard and heavy, yet there are not lacking abundant supplies of
light and strong construction timbers which can well be substituted for

70580

the White Pine, Oregon Pine^ and California Redwood, which are im-
ported. Lauan is a fairly soft, strong wood and can well take the place
of Oregon Pine and California Redwood. Apitong, harder, heavier, and
stronger than Lanan, is equal to Oregon Pine and Longleaf Pine for gen-
eral construction. Lauan and Apitong and the other species of the
same family, Dipterocarpaceae, are not only the most abundant timber
occurring in the Archipelago but they are very large trees. Timber up
to 90 feet in length can be secured from them. They are also excellent
finishing woods, equal to most American woods used for interior finish.
The following comparative figures of weight and strength are taken
from Bulletin No. 4, Bureau of Forestry, ' 'Mechanical Tests, Properties,
and Uses of Thirty- Four Philippine Woods:"

Name.

Lauan

Oregon Pine „

California Redwood .

Apitong

Longleaf Pine

Giiijo

White Oak

Pignut Hickory

Dongon.

Yacal

Molave

Locality.

Philippine Islands .

United States

do

Philippine Islands .

United States

Philippine Islands .

United States

do

Philippine Islands .

do

do.„

Compression

along the

grain.

12.4

12

13.3

14.4

15

14.6

12

12

10.7

13.4

12.7

S o o

6,180
5,700
5, 560
7,250
6,900
7,940
8, 500
10, 900
9,420
9,220
8, 330

Cross-bending.

10.4

12

12.3

14

15

13.7

12

12

11.6

15. 6

10.4

bo O
03 <D.f3

9,760

7,900

9, 110

11,620

10,900

15, 150

13, 100

18, 700

17, 110

15, 690

8,580

o a

m

1,663
1,680
1,320
2,144
1,890
2, 158
2,090
2, 730
2,209
2, 583
1,614

Pu^-t

0.446
.51
.445
.645
.61
.708
.80
.78
.857,
.843
.785

Some of the finest cabinet woods in the world are found in the Phil-
ippines. Ebony, Acle, Narra, Camagon, and Tindalo give the greatest
choice in beautiful color and grain. These and others would make
superior substitutes for the American cabinet woods which are so rapidly
disappearing. For Cherry and Mahogany, Narra, Tanguile, Balacbacan,
Calantas, and Lumbayao, though diffeiing somewhat in grain and hard-
ness, can be used; for Black Walnut, Acle and Banuyo can be used; and
so on, every American furniture wood having numerous Philippine
substitutes. Besides there are valuable woods, such as Ebony, Camagon,
and Tindalo, which have no counterparts in the United States.

At present Philippine lumber is produced almost exclusively for the
local demands. In the fiscal year 1904-5 the Islands used about 75
million board feet of lumber, of which they produced about 40 million
feet The remainder was imported from the Pacific coast. It seems

anomalous that a country so rich in timber should not produce more
than one-half of the supply necessary for its own people. The reasons
are that lumbering is generally on such a small scale and with such
inefficient methods and facilities for transportation of timber in the
islands at present so poor that Oregon Pine is sold, in Manila and other
large cities, cheaper than most native lumber.

Conditions demand the development of a modern lumber industry
and the installation of large sawmills and suitable transportation facil-
ities so that Philippine lumber can dominate in the Philippine Islands
and penetrate to foreign markets. Large operations, well capitalized and
efficiently managed are necessary if tlie Philippine people are to receive
a proper economic benefit from the possession of their valuable forests.

The company desiring to establish a large lumbering operation in the
Philippines can not study too carefully the factors governing the lumber
industry here. These factors are the character of the forests, the acces-
sibility of the timber, transportation facilities, labor conditions, stumpage
prices, and market conditions.

CHARACTER OF PHILIPPINE FORESTS.

A lumberman desiring to operate on a large scale demands in a com-
mercial forest accessibility, comparatively few species per acre, most of
which are merchantable, and enough merchantable timber per acre to
permit the use of modern logging methods. Large areas of Phi]ip})ine
forest although containing valuable timber fail to answer these
requirements.

In Benguet and neighboring provinces at an altitude of more than
2,000 feet are the open pine forests. Along the coasts, especially at the
mouths of the rivers, are extensive salt-water or tidal swamps known as
^ ^manglares, ' ' from which come firewood, tanbark, and dyebark. The low
coast fiat is another forest type, characterized by scattered trees of I])il
and a few other valuable species. The tangled forests of the deltas and
river bottoms present the greatest variety in species but are not satisfac-
tory for extensive lumbering. Finally there is the extensive hill or up-
land type of forest which is the most suitable for lumbering operations.

The upland forests are the most extensive and are the ones in which
the lumberman will be most interested in the future. There are two
general classes of upland fore^st depending generally on soil conditions.

On rocky, exposed and thin-soiled uplands the forest is thinner and is
characterized by a smaller proportion of commercial species. Here Mo-
lave, Narra, Tindalo, Acle, and other of the most valuable trees are found
scattered through a stand composed largely of small unmerchantable
trees. The other type of upland forest grows on the better, deeper soils.
Here is generally found a fairly dense stand of large trees principally
members of one family, Dipterocarpacea3. The best example of this type

is the forest in northern Negros where a lumber company is now oper-
ating. Here Balacbacan, Red Lauan, Almon, White Lauan, and Api-
tong make up a stand of 32,000 feet board measure of merchantable
timber per acre. This type of forest naturally answers best the require-
ments of modern logging, and upon it will largely depend the develop-
ment of an extensive lumber industry. Both classes of hill forests are
found throughout the Islands.

The Bureau of Forestry is gradually locating and roughly mapping
the best commercial forests of all these types. The information thus
collected is available to all interested parties.

ACCESSIBILITY OF COMMERCIAL FORESTS AND
TRANSPORTATION.

The commercial forests are found either along the coast where the tim-
ber can be skidded directly to the beach and loaded in suitable harbors,
along navigable and floatable rivers where it is skidded directly to the
rivers and floated or rafted dow^n them, or at some distance inland so far
from deep water that short railroads are advisable or necessary. As long
as timber remains close to the beach and large rivers, logging is easy and
cheap, requiring but little capital. In such forests there are a large num-
ber of operators, cutting small quantities of timber. But these forests are
being fast destroyed by the farmer. Lumbering in the future will be in
the extensive forests some distance from the coast, where carabao will
not serve for hauling.

The difficulties and expense in transporting lumber to the markets
are great. A lumberman who does not own his own boats is handi-
capped. Few of the interisland steamers are adapted for carrying lum-
ber, and freight rs^tes are high "and sometimes prohibitive. From the
Island of Palawan to Manila, a distance of about 300 miles, the freight rate
for logs is about $30, gold, per 1,000 feet board measure. Such rates are
manifestly absurd. Only the good prices in Manila make it possible to
ship native lumber under such conditions.

A company operating on a large scale should own its own means of
transportation from the woods to the market. One lumber company
which is operating more extensively than any other in the Islands has
a fleet of steamers and barges to transport the sawn lumber to the mar-
kets of Cebu, Iloilo, and Manila. Freight from its mill in the Island of
Negros to Manila costs them less than $5 per 1,000 feet board measure.
It is reasonable to expect that lumber can be shipped between most
points in the Islands at a cost not exceeding this figure.

Freight rates from Manila to the Pacific coast amount to $7, United
States currency, per ton (logs), al)Out 40 cubic feet, or $12 to S14 per
thousand feet board measure. Freight rates from Manila to the Atlantic
coast of the United States are $14 to $15, United St^ites currency, per
thousand feet board measure, or $8 per ton of 40 cubic feet; Ught-weight
material, 15 per 40 cubic feet.

TARIFF RATES.

There are no export duties on timber or on the manufactured product.
Logs imported into the United States are admitted free. The import
duty at Manila on sawmill and logging machinery is 5 per cent ad
valorem.

LABOR CONDITIONS.

The oft-repeated saying that Filipino labor is inefficient does not
apply in the lumber industry. Dollar for dollar of outlay, much better
results will be secured both in the woods and in the sawmill from
Filipino labor tlian from American labor. The Filipino has a natural
aptitude for running machines and is easily tauglit. Given a good
American foreman it is surprising how well a Filipino crew can handle
a saw^mill. They work for small wages — $0.25 to $0.75, gold, per day—
and given fair treatment make fairly steady and permanent workmen.

In the thinly settled forest regions it is necessary to import labor from
the more thickly settled districts. Yet there are tracts of commercial
forest so located that there is an abundant and good supply of labor
available in tlie regions themselves. One lumber company is located in
the sugar-growing district of Negros where labor is abundant and cheap.
It has found no difficulty in securing a force of several hundred men,
to most of whom it pays $0.25 per day. The lal)orers are satisiied and
w^ork well.

A lumberman will not find tlie labor problem a dilHcult one. lie
will find tliat he has escaped many of the vexatious labor difficulties of
the United States to meet comparatively few in the Fhili))pine Islands.
I^atience and fairness in treating the Filipinos will secure most excellent
results.

STUMPAGE PRICES.

The Philippine Government sells its timber clieap. The (lovernment
charges range from $0. 25 to SI. 25, gold, per cul)ic meter, or approximately
$1 to $5 per 1,000 board feet. One dollar per 1,000 board feet is charged
for I^auan Avhich sells in Manila for $85 per 1,000 board feet. Similar
grades of California Redwood for export are worth S20 to $25 in San
Francisco and stumpage at present can not l)e stH'ured for less tlian S2,
gold, per 1,000 feet. The cheap Philii)pine stumi)age is still more
marked in the fine cabinet woods. For Narra and tlie oilier most valu-
al)]e woods, it is but S5, gold, per 1,000 l)oard feet. less than |)ine
stumpage in many parts of the United States.

MARKETS.

The lumberman, however, is not satisfied alone Avith a satisfactory
forest, cheap labor and stumpage, and good transportation, l)ut prol)al)ly
wants to know first what the market is for Philippine timber.

Approximately 80 to 90 million feet board measure of lumber are used
each year in the Philippines; of this a large amount is imported, being

mostly Oregon Pine and California Redwood. The imported timber is
being driven out of the Islands' market by the cheaper and more abund-
ant kinds of native timbers. About 5 million board feet has recently
been added to the consumption of native timber by the decision to use
native lumber almost exclusively in construction for the United States
Army in the Philippines. China and Australia used of American pine
during the past year 86 million and 63 million board feet, respectively,
a large part of which can be furnished by the Philippine Islands when
their lumber has been introduced in those markets by large lumber
companies properly equipped and capitalized.

The following distances (in miles) to markets show the advantageous
position of the Philippine Islands in competition with the Pacific coast:

Distsinco from—

To—

Manila,
P.I.

Cebii, P. I.

Iloilo, P. I.

Hongkong.
China.

Shanghai,
China.

Sydney,
Australia.

Seattle U. S. A.

6,400
400
200

6,300
800
700

6,200
1, 300
1,200

6,800
3,370
3, 570

Cadiz, Nogros Ocei-
deiital,P. I

Borigabon, M i n d o r o,
P. I

140

70

A market for Philippine lumber should also be secured in the United
States. Most Phili|)pine timbers are unexcelled for cabinet work, in-
terior finishing, etc., where beautiful hard woods capal)le of high ]>olish
are required. Such woods are rapidly disappearing in the United States.
The difficulty has l>een that there were no lumbermen in a position to
supply a strong demand. Consecjuently the fine Philippine woods are
still unknown in the United States.

The lumberman, however, who now contemplates luml)ering in the
Philippine Islands can not figure entirely on what the market may be,
but must de])end mostly on wluit it is now. He must feel that he can
secure his share of the local trade. The following are the prevailing prices
in Manila for some of the principal native woods, Oregon Pine, and Cali-
fornia Redwood:

Price (in gold)
per 1,000 feet B. M.

Lauan $30. 00-$40. 00

Apitong 35. 00- 50. 00

Guijo „ 49.00- 70.00

Molave __,_„ 107.50-150.00

Yaeal 80. 00-100. 00

Red Narra . 125. 00-150. 00

Tanguile - .___.__ 47.50- 60.00

Ipil- 90.00-112.00

Oregon Pine 30.00

California Redwood „_ 47.00

It is evident from these prices that a lumber company properly equipped
and managed and operating on a suitable timber tract should be able to
deliver many kinds of native lumber in Manila at a cost about one-half
of these prices. Cheap labor and low stumpage ofifset the increased ex-
pense of machinery and management in the Philippines.

There should always be an opportunity for small operators in supplying
the local provincial demands^ but the growth of a lumber industry worthy of
the Islands will depend on the investment of consideral)]e capital. Such
lumbermen should be prepared to handle the lumber in all stages from
the forest to the market. In this way they can compete successfully,
not only in the Philippines but also in Chinese, Australian, and even
American markets.

PRESENT LUMBERING OPERATIONS.

Lumbering at present is mostly carried on in a crude, inefficient way
by numerous small cutters, few of which cut a significant amount.
There is also a great waste in logging. Skidding and hauling are done
with carabaos, which are poor draft animals for this purpose. Several
carabaos are needed to move an ordinary log, and much of the timber is
too large to be hauled by them. In this kind of logging the requirements
for cheap logging are lacking, and the outi)Ut is necessarily small.

Since the American occupation, the number of small sawmills has greatly
increased, yet a large part of the native timber used in the Islands is wh i]) -
sawn. In all there are thirty-one sawmills in the Phili|)pines. These
do not manufacture more than 250,000 board feet of lumber per day.
Of this, 90,000 feet can be cut by the five Manila mills. This indicates
well the condition of the lumber industry at ])rcsent. Extc^isivc lum-
bering is only beginning in thel^liilippine Islands. Yet tliere are a few
operations now l)eing successfully carried on which indicate to lunibermen
the possil)ilities in the Pnilippine forests.

LARGE OPERATIONS.

The operations of a company in Negros Occidental are morc^ extensive
than those of any other company in the Islands. It is ofx^ating on a
tract of 69 square miles, 60 square miles of which are covcr(»d with an
unusually heavy stand of timl)er averaging about 32,000 board feet of
merchantal)le lumber per acre. The mill, which has recently been com-
|)leted, is a modern band mill of the l)est typc^ with a capacity of 100,000
board feet and should manufacture at least 60,000 board feet per day
when a mill crew has been trained. This company is able to sell Lauan
and Apitong in Manila at a lower price than that prevailing for Oregon
Pine or California Red Wood. Its oi)erati()n is an examj)l(* of what can
be done in the Philippines by a well-e(jui|)ped company operating with

8

modern methods. Donkey engines are employed to skid the timber to
a logging railroad on which the logs are hauled to the mills. The com-
pany's steamers and barges carry the lumber to Manila, Iloilo, and Cebu.

SUITABLE TIMBER TRACTS AVAILABLE.

In pursuance of its policy to do everything i)ossible to stimulate the
forest industries of the Philippine Islands, the Bureau of Forestry, during
the past two years, has located and roughly mapped timber tracts
suitable for large operations. It is now in a position to give definite
information regarding some such tracts to prospective lumbermen.

In northern Negros are 60 square miles of dense virgin forest, similar
in species and equal in yield to the forest of the Insular Lumber Com-
pany which adjoins it. This forest covers the slopes of Mount Silay,
ranging in elevation from 200 to 4,000 feet above the level of the sea.
About 40 square miles lay below 1,000 feet and are an execellent lum-
bering proposition for a company with a large capital. The new railroad
in Negros is planned to pass within 3 miles of the edge of the forest. A
company would build its sawmill on the line of this railroad, run its own
logging railroad into the forest, and ship its lumber to a port on the coast
to be loaded for Cebu, Iloilo, Manila, or Hongkong and New York. On
the 40 square miles most accessible is a total stand of about 800 million
board feet of merchantable lumber, enough to supply a mill cutting
50,000 feet per day more than fifty years. It is a Dipterocarp forest,
that is, composed mostly of Almon, Lauan, Apitong, and Tanguile.

In the well-forested region of northeastern Mindoro is another suitable
tract of some 200 square miles. It is located west of Lake Naujan and
about 13 miles from Calapan, the provincial capital. This also is a Dip-
terocarp forest comj)Osed mainly of Almon, Lavian, Tanguile, and
Apitong. A rough survey showed an average stand of about 20, 000 board
ieet per acre. Logs may be rafted across the lake and dow^n the river to
the coast or a tramway built direct to Cakpan, which is about twelve
hours by steamer to Manila.

On the northern half of the peninsula of Bataan, across the bay from
Manila, is another forest tract suitable for a large lumbering operation.
Although logging is much more difficult here than on the other tracts
mentioned, the proximity to Manila makes it a good proi)osition.

OBTAINING A TRACT OF TIMBER.

The public forests of the Philippine Islands are not sold, but are
exploited under a license system. Small cutters generally operate under
ordinary yearly licenses for definite small areas. In the case of large
operations involving the investment of considerable capital in permanent
enterprises, exclusive licenses are granted for periods up to twenty years
for definite large tracts of timber, which licenses are practically equivalent
to concessions.

9

Applications for exclusive licenses on tracts not exceeding 2, 500 acres
in area are forwarded by the Director of Forestry^ after due investigation,
to the Secretary of the Interior with recommendations. The Secretary
may then grant an exclusive license if he decides that it is in the public
interest. For an area of more than 2,500 acres when the Secretary of
the Interior is convinced that the granting of an exclusive license is in
the public interest^ proposals for bids to secure the said privilege are
published in the Official Gazette and other newspapers. Tlie license
wall then be granted to the highest and best bidder who offers to install
the most complete and efficient plant most promptly and to do the greatest
amount of annual development work and who furnislies the best bond
as a guaranty of performance.

The right to reject any and all bids is expressly reserved, and in general
it may be stated that no exclusive license will be approved except upon
a reasonable showing that the licensee will be able within the period fixed
in his license actually to exploit the resources of the forest tract covered
by it. The man who means l)usiness must show the Government that
he really intends to develop the tract for which he s(Kaires an exclusive
license and will protect the interests of the public in the concession.

The Bureau of Forestry is now in a position to assist lumbermen
desiring to locate here. Some have recently made applications for ex-
clusive licenses for large tracts and have found the maps and information
furnished them by the Bureau of great value. Trained foresters with
two or more years of experience in tlie Plulippine forests will be placed
at the service of lumbermen to assist them in finding suitable forest tracts.

The available publications of the Bureau will be sent on a})|)lication
to interested parties.

o

I