All eyes on Davao
“DAVAO HAS in effect become the capital of the Philippines in the South,” businessman and incoming Davao City Chamber of Commerce and Industry, Inc. (DCCCII) president Ronald Go said. He notes that the city has become a place of interest after Rodrigo Roa Duterte, who was mayor of Davao City for 22 years, won the presidential race by a landslide in May 2016.
The City of Davao, showcased as “Exhibit A” of the Duterte administration, has grown by leaps and bounds after the historic win of then-mayor Rodrigo Roa Duterte as the 15th President of the country. He is the first from Mindanao to hold such office.
The Davao City Investment Promotions Center (DCIPC) officer-in-charge (OIC) Lemuel G. Ortonio told The Manila Bulletin that his office has seen growing interest in the city as a preferred area for new investments in the country since Duterte came into office.
The official pointed to the city’s available vast area for development, cheap labor, and the ease of doing business as the main factors that have attracted businesses, making the city the most promising area for investments.
“In investment potential, Davao City is very competitive. Cost of labor is cheap, yet the workforce is highly skilled and trainable; utility cost is cheap; and there is convenient accessibility of goods and people. Also, our city still has a vast area for development. There is also ease in doing business here, like faster transactions in securing business permit,” said Ortonio.
He added that it helped that the city was being managed by presidential daughter, Mayor Sara “Inday” Duterte-Carpio, who is as capable as her father and with the same tenacity to run Davao, the largest city in the country in terms of land area.
A taste of the Duterte brand of leadership
President Duterte, of course, has become the major draw for investments. According to Ortonio, he is “the perfect marketing ambassador for the city’s investment and tourism potentials.”
He noted that Duterte’s credibility as leader of the city, and now the country, had created the much-needed buzz to boost the city’s bid as a key investment destination in the Philippines.
Duterte has experience in key branches of government while serving the city.
He was a prosecutor for 10 years before he entered politics. He served as mayor of Davao from 1988 to 1998 and as representative of the first district from 1998 to 2001, before returning as mayor from 2001 to 2010.
He slid down to vice mayor when DuterteCarpio debuted as chief executive of the city from 2010 to 2013, was then elected as mayor anew in 2013 before his spectacular rise to the presidency in 2016.
Ortonio disclosed that his office has been receiving numerous inquiries from potential foreign investors in China, Japan, South Korea, Taiwan, and Malaysia, with most of them saying that they took interest in Davao City after it was placed on centerstage by Duterte’s assumption as President.
“Most of them knew nothing about Davao City before, and would only often hear of Manila and Cebu every time the Philippines was mentioned. With the increased awareness came increased interest in Davao City for foreign investors to pour in new potential developments,” he said.
By leaps and bounds
Citing a report from the Davao’s Business Bureau, the investment official said that the city grew by seven percent in terms of new and renewed businesses that totaled 39,887, with capitalization of P232.886 billion as of third quarter in 2016. It was higher compared to 37,094 recorded in the same period in 2015.
While Ortonio said that his office has yet to determine which particular industry has benefitted from this upswing, he nevertheless noted that “it can be assumed that the retail business still remains to be the top industry in the city.”
“This is consistent with the trend in the previous years. It can also be observed that more new investments have been poured into agribusiness, property development, and information and communications technology in the last five years,” he said.
Go agrees. According to him, the city’s top business leaders believe that the spike in the number of real estate investments was brought about by an increasing demand for housing and office spaces over the next few years.
Go said that the increased interest in the city was brought about by their curiosity on how the longtime mayor was able to transform the city into what it is today.
“Since then mayor Rody Duterte became President, the interest to know where Davao City is, what Davao City is like, and how Davao City was transformed under his administration has sparked the interest of practically everybody who is not from this city. And that has opened doors to opportunities for the business community of Davao,” he said.
More tools for business
To help ease the potential investors’ entry into Davao, Ortonio said that they were starting to improve the city government’s information management, and databanking services to provide the investors not just with raw economic data, but also with industry-specific analytics that will help them predict the viability and the return of their investments.
“With this, we want investors to know that their businesses or investments will flourish in Davao City,” he said.
But he emphasized that even as investments have started to flow into the city, the city government will continue to push the premier city of Mindanao as an investment haven by becoming more aggressive in its marketing promotion.
According to Ortonio, plans are afoot to organize more trade promotion activities, such as investment and tourism roadshows with different business organizations and outbound business missions.
He said this is also in line with the thrust of Duterte-Carpio in the next three years. She has identified the following as her top priority projects: poverty alleviation, infrastructure, development, solid waste management, health, education, agriculture, tourism, transportation planning and traffic management, peace and order, and disaster risk reduction and mitigation.
“The city government must not simply rely on receiving investment inquiries that are pouring in. It needs to be more proactive and take advantage of the spotlight the city has been receiving,” Ortonio underscored.
Duterte magic spreads throughout davao
Data from the Department of Trade and Industry in Region 11 (DTI 11) showed that P7.684 billion worth of investments were infused in the Davao region as of third quarter of 2016, a remarkable 38.7 percent more than the entire 2015 record of P4.708 billion.
Davao City’s share of these investments was 33 percent, Davao del Sur with 29 percent, Davao del Norte with 27 percent, Compostella Valley with seven percent, Davao Oriental with four percent.
The bulk of these investments went into industries such as manufacturing with 38 percent, transportation and storage industry with 31 percent, real estate 13 percent, accommodation/food
services and power with seven percent each, and agriculture with four percent.
San Miguel Foods, Inc., which poured in P2.244 billion for the construction of a manufacturing plant in Davao del Sur, topped the investors in the Davao region.
International port-operator Anflocor’s Davao International Container Terminal, Inc. (DICT) had P1.885 billion worth of investments in Davao del Norte, while its real estate arm, Damosa Land, Inc., earmarked investments totaling P596.59 million.
The FTC Group of Companies’s invested P540.97 million in Davao City, while Euro Hydro Power (Asia) Holdings, Inc. is building a P517.77million hydropower plant in Compostela Valley province.
The PNX Chelsea Shipping Corp. came as the sixth highest investor in the Davao region with P507 million, then AVLB Asia Pacific Conglomerate, Inc., with P500 million, Grupo San Pedro Realty Corp. with P372.10 million, Anflo Banana Corp., with P342 million, and Cocohaus Corp. with P177.50 million.
The 2016 report on investments data will be out within the month.
Prepping up the big time
With the sudden rush of investments and development in the city, the administration of Duterte-Carpio is already addressing the worsening traffic condition in the city.
“It’s high time for Davao City to take centerstage. We welcome development. (And the traffic) is a good problem to solve because it is an indication that the market is coming to Davao,” Davao City Planning and Development Office (CPDO) head Ivan Cortez said.
Cortez said that they were now in talks with local consultants for the creation of “a roadmap or a bible” for handling traffic congestion and transport infrastructure that will be followed for the next 20 to 30 years.
He said that Duterte-Carpio has given clear marching orders for them “to come up with this to properly plan out what kind of development is suitable for a specific area in the city and have a better foresight of the development direction.”
Cortez rued that there may have been a lack in urban planning in the city that was originally designed to accommodate a population of only 50,000 in the 1930s, but whose residents have reached over two million.
“It’s difficult to catch up with the development when we have not prepared for the big time,” he said.
Cortez also bared that part of the plans includes a multi-modal transportation system for the city, which should allow easy access to the F. Bangoy International airport, among other things.
He also said that, to ease traffic congestion, there is a plan to transfer the Davao City Overland Transport Terminal (DCOTT) from Ecoland to three entry points of the city: Bunawan, Toril, and Calinan.
Wish list
Go said the business community in Davao City remained optimistic that Duterte will be able to stamp out corruption and weed out corrupt and dishonest personnel and officials in the government.
“Although the President has laid down his stance on this, there are those who continue to persist in their old ways for obvious reasons. Government and the private sector should work together in identifying these individuals and weeding them out of the system,” he said.
The proposed adjustment in the real property tax in the city will be one of the major issues that will be tackled this year, he added.
“There are also concerns about businessrelated taxes and the probable increase of Real Property Tax, which will surely affect everyone, most especially those with idle lands. Again government and the business community should work together to come out with a solution that effectively addresses the concerns of all parties affected,” Go said.
For his part, re-elected DCCCII executive vice president Sofronio Jucutan said he wanted Duterte to focus on addressing the worsening traffic situation in major urban centers in the country, and on improving public infrastructure, like roads, by adopting night-time shifts to fasttrack the construction period.
“If other countries can do it, why can't we? Why do we perpetuate the old style of digging roads and leaving them unrepaired for weeks or months?” he said.
Among the many other issues that the Duterte administration should focus on are a more comprehensive and stricter implementation of rules on garbage collection and manage- ment; the equal administration of justice; heavier penalty on heinous crimes; the unrelenting fight against corruption; and the rapid prosecution of those involved in economic sabotage and crimes against humanity.
“Judgment should be given before the perpetrators die of old age, or the crime committed is forgotten,” he said.
Jucutan added that there is also high expectation that the new administration will be able to grant more soft credit loans to the agricultural players.
And saying the construction of a railway in Mindanao was “long overdue,” the business leader said that much is riding on the President to make this a reality.
Jucutan said that the business community also wanted the Duterte administration to ensure that the peace talks with the rebel groups would bear fruit because improved peace and order will make the business atmosphere in the city more conducive for sustained progress.