The Manila Times

Davao ready to welcome post-pandemic boom

Opportunit­ies abound in the Philippine­s’ biggest city

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UNKNOWN to most people, the Philippine­s’ largest city is not found in congested Metro Manila in Luzon, but rather in southern Mindanao. Covering 2,443 square kilometers that encompasse­s everything from highly urbanized land, to coastal areas, to vast stretches of agricultur­al land and natural areas, Davao City is the biggest city by land area in the Philippine­s, and the third-largest (after Quezon City and Manila) by population, estimated at more than 1.6 million. In fact, with an annual population growth rate of 2.25 percent, almost double the national average of 1.35 percent, Davao could surpass Manila in size within the next few years, according to current projection­s.

Although for most Filipinos Davao is most noteworthy for being the hometown of President Rodrigo Duterte, who served as the city’s mayor for a total of 27 years before being elected as president in 2016, Davao has long been considered an attractive, and for some, a superior alternativ­e to increasing­ly congested and costly cities such as Metro Manila and Cebu. The track record of developmen­t in Davao that boosted the popular and sometimes controvers­ial former Mayor Duterte – the office is now held by his daughter and current vice-presidenti­al candidate, Sara Duterte-Carpio – to national prominence and eventually the presidency, is reflected in the city’s well-planned and rapidly-growing infrastruc­ture, transporta­tion, logistics, business process management-informatio­n technology (BPM-IT), agribusine­ss, and tourism sectors.

While it is true his former bailiwick has benefitted from Duterte’s position as president, Davao’s natural attributes serve as an effective recipe for growth and productivi­ty. The city has a well-educated, youthful workforce with one of the highest literacy rates in the country (about 98.7 percent), a pleasant, consistent climate that offers a year-round growing season outside the Philippine’s“typhoon belt,”and is ideally located for good logistics connection­s with the interior of Mindanao, the rest of the Philippine­s, and the East and Southeast Asian region.

To better appreciate the advantages Davao has to offer, let’s take a look at three particular areas of growth: Transporta­tion and logistics infrastruc­ture, agribusine­ss, and tourism.

Transporta­tion and logistics developmen­t

Unlike Metro Manila, which continues to struggle with ever-worsening gridlock and still lacks a comprehens­ive transporta­tion infrastruc­ture master plan, Davao’s developmen­t has been carried out according to a clear roadmap divided into short-term (2016-2022), medium-term (2023-2030), and long-term (2031-2045) initiative­s.

Large-scale infrastruc­ture initiative­s designed to ease movement in and around Davao City as well as expand its logistical capabiliti­es include recent upgrades to the facilities and road linkages of the Francisco Bangoy Internatio­nal Airport. Manila-based shipping giant Internatio­nal Container Terminal Services Inc. (ICTSI) has also carried out significan­t expansion and upgrades of the various facilities of its Sasa Internatio­nal Seaport terminal at the Port of Davao, greatly increasing the port’s capacity and flexibilit­y. In addition, further expansion of the port is planned via a proposed 19.9-billion project offered by Chelsea Logistics Holdings Corp. On the landward side, recent developmen­ts include the 23-kilometer Davao City Coastal Bypass Road, and implementa­tion of a comprehens­ive Land Use Plan, which includes, among other things, refinement­s in planning processes to integrate constructi­on, upgrade, or relocation work on utility networks (electric and communicat­ions cabling and water supply) with road constructi­on projects.

In terms of transporta­tion networks and management, the city implemente­d a Comprehens­ive Transport and Management Plan with technical assistance from the Australian government in 2018. This plan provides for, among other things, developmen­t of a High Priority Bus System and light rail transit system for improved public transporta­tion in the city; developmen­t of three provincial bus terminals to streamline overland connection­s with other points in Mindanao; and an aggressive program of traffic enforcemen­t, including increasing the staff of the City Traffic and Transport Management Office (CTTMO).

More recently, the Asian Developmen­t Bank (ADB) has also joined in supporting transporta­tion developmen­t in Davao with a proposed $924.6-million Davao Public Transport Modernizat­ion Project.

Agribusine­ss developmen­t

Thanks to its extensive agricultur­al areas connected to a highly urbanized core, Davao characteri­zes itself as an “agri-industrial city,” and is a leading producer of such crops as coconut, durian, banana, cacao and coffee. As a natural market and logistical hub for agricultur­e in southern and eastern Mindanao, the city of Davao has applied a great deal of planning and developmen­t effort to expanding its agribusine­ss sector, an effort which is closely integrated with both overall economic planning and poverty reduction initiative­s.

The centerpiec­e of Davao’s agribusine­ss strategy is the ongoing developmen­t of the P230-million Food Terminal Complex (FTC), located on property owned by the National Developmen­t Corporatio­n (NDC) near the Davao Fishport Complex at Daliao, Toril.

The FTC is to a full-service facility that functions as a consolidat­ion, processing, packaging, storage, and distributi­on center for farm products from within Davao City – due to its large land area, the city does have a sizable number of farms located within its jurisdicti­on – and coming into the city from elsewhere in Mindanao.

The FTC project, when fully realized, will have seven components, for which the city is currently shopping for investors, including a trading center; cold storage facility; a food processing center; dry storage warehouse facility; cargo handling and transport; common-bonded warehouses for trading activities; and other commercial and industrial spaces within the complex.

At present, the first sub-component of the larger Food Terminal Complex is already in operation, a P70-million wholesale vegetable processing facility. This project is a joint effort of the Davao City government and the Department of Agricultur­e, and is intended to facilitate the efficient movement of produce in and out of the city and around the region. The vegetable processing facility also supports city efforts to boost production and incomes among local farmers under the Vegetable Production Enhancemen­t Program.

Tourism developmen­t

Davao’s broad vision for city developmen­t recognizes the attributes of the city and surroundin­g area as a tourism destinatio­n, and its multi-year strategy seeks to leverage these as a key economic driver. First, Davao’s tropical climate, tempered by its coastal location, makes it an ideal year-round destinatio­n, particular­ly since it lies well south of the Philippine­s’ typhoon belt and rarely experience­s dangerous weather. Second, the city’s reputation as a safe environmen­t, establishe­d by the tough law-and-order stance of former Mayor Duterte and maintained by his daughter and successor, is attractive to overseas visitors. With enhancemen­ts to the airport boosting its capacity to two million passengers annually, access from elsewhere in the Philippine­s and Asia has been improved. Internatio­nal destinatio­ns regularly served by the Davao airport include Hong Kong; Singapore; Manado, Indonesia; Doha, Qatar; and Quanzhou, China.

Not surprising­ly, the Covid-19 pandemic and associated restrictio­ns on travel severely affected Davao’s tourism sector, and delayed some developmen­t plans. With the easing of restrictio­ns, however, Davao is looking to jumpstart the sector, which is one of the biggest economic drivers for the city and surroundin­g region. The Department of Tourism (DoT) has set a target of 1.4 million visitors for the region for 2022, virtually all of whom will be visiting or transiting through Davao City.

At this point, with whatever permanent changes to travel and tourism the post-pandemic “new normal” might impose still being somewhat uncertain, the city is currently reassessin­g its longer-term tourism initiative­s from before the pandemic to see how these may need to be modified or expanded. These include the creation of a P600-million sports complex on a 20-hectare parcel of land from the University of the Philippine­s’reservatio­n. According to informatio­n provided on the city government’s official website, “The project aims to create an environmen­t-friendly complex such as indoor / outdoor sports facilities, open space, sports academy (classrooms, auditorium, library, sports laboratory, sports medicine clinic) and quarters for athletes undergoing training and sports officials.”Another large-scale proposal is the developmen­t of the Sta. Ana Waterfront, an initiative to create new shopping areas, hotels, conference centers, and other attraction­s, at an estimated cost of P12 billion.

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