High cost of land in Davao seen to limit ecozone investments

DAVAO CITY — The high cost of land in the city is seen as a factor that will limit investments in economic zones, particularly the business process outsourcing (BPO) sector.

“The cost of land here is limiting. In Davao, the cost of land is very expensive, even in agricultural areas,” said Malou G. Monteverde, Chamber of Real Estate and Builder Associations ( CREBA) national committee chairperson for economic zone development. In Luzon, she said, there are areas where properties are still less than P500 per square meter (sq.m.). The cost of land means a lot for BPO companies in terms of competitiveness, she added. She said economic zones should be close to ports and airports, and have very good road networks.

Ms. Monteverde said the city has up to four economic zones focused on manufacturing and logistics, but needs more of those focused on BPOs with at least a 25- hectare area. However, she noted ecozones accredited by the Philippine Economic Zone Authority ( PEZA) need to have at least 5,000 sq. m. in floor area. Right now, she added, there is very limited land for ecozones that follow these requirements. Ms. Monteverde said several investors recently visited Davao but found there were not enough areas to locate. “We have very few ecozones that are PEZA- accredited that offer sales and tax perks,” she added. At present, there are 80 economic zones in Mindanao that cater to manufacturing, information technology, agro- industry, medical facilities and tourism. Meanwhile, Ms. Monteverde said the Philippines is also looking to establish an economic zone for manufacturers of defense materials such as bullets.

“Before bullets were only manufactured in Bataan but now the Philippines should be ready with its own defense so we will have a defense economic zone,” she said.

She said there is a proposal that each region should have its own ecozone committee to propose or identify areas for development.

“The new director-general for the PEZA, Charito Plaza, is from Mindanao so she knows the needs of Mindanaoans,” she said. The focus areas for now are Caraga and Davao regions.

CREBA National, along with PEZA, the Mindanao Development Authority (MinDA) and the Board of Investments, held the first Mindanao Ecozone Convergence forum in the fourth quarter of 2016.

“As an offshoot, we will have the first Philippines Ecozone Convergence to showcase the Philippines as an ecozone hub for the ASEAN in the last quarter of next year,” she said.

While the government considers the development of ecozones as a strategy to promote countryside development, it has to address the security, and peace and order concerns that seem to scare away locators.

Heidi Villanueva, investments planning officer of MinDA’s Ecozone Planning Group, said consultation with some sectors in Soccsksargen showed problems in finding locators for ecozones. She noted there are some empty ecozones, with no investors.

Ms. Monteverde said most of the ecozones experiencing problems in getting locators are located in the Autonomous Region in Muslim Mindanao.