THRIVING amid challenges, this is how Davao Region’s business and economy for the year 2016 can be best described.
Major changes and development has been noted upon entry of the Duterte administration as Davao serves the home city of the President, hence attributed by businessmen as the new “epicenter of the Philippines” following the overwhelming influx of committed and indicative investments both from local and foreign firms.
But business operations here met a major setback after a deadly blast rattled the Roxas night market last September 2 leaving millions of pesos lost from most of business establishments in the city and left prospective investors in a “wait and see” attitude as security remains their major concern.
Here’s a look back of the major economic highlights, trends, opportunities and challenges of Davao Region, one of the fastest-growing regions in the country.
Economic boom sustained
For the whole year of 2016, the Davao City Chamber of Commerce and Industry, Inc. (DCCCII) in its year-end report said the economic boom is sustained, stating real estate and business process outsourcing (BPO) investments continue to flourish in the city.
Construction and expansion of condominium properties and multi-purpose buildings had long commenced in some parts of the city which is mostly rented out by BPO firms.
“The economy of Davao City is robust. A lot of businessmen from Manila and other areas are going crazy in speculating to buy land here, even the prices had gone up so high,” Bonifacio Tan, outgoing DCCCII president said earlier.
For the first quarter of 2016, the Board of Investments-Southern Mindanao revealed that P14.7 billion worth of investments were registered from 21 projects generating 4,553 jobs.
BOI-Southern Mindanao also bared last June that investment leads in the island-region reached P886.75 billion showing an improved investors’ confidence in Mindanao after the presidential win of President Rodrigo Duterte. The investment leads are heavily contributed big ticket projects by Chinese, Taiwanese, Indian and European investors.
This year, the Commission on Audit announced that Davao City is among the 6th highest-earning local government units in the country in 2015 with total reported revenues of P6.2 billion, making the city as the only LGU in Mindanao to be included in the country’s top 10.
Employment, contractualization and wage hike
The Department of Labor and Employment Davao Region disclosed last December 18 that unemployment rate in the region for the third quarter of 2016 went down to 3.6 percent as compared to last year’s 5.6 percent in the same period. The latest jobless rate, Dole Davao Region assistant regional director Jason Balais said shows only four out of 100 people in the region are unemployed. The employment rate of the region for the third quarter was at 96.4 percent, up from the same period of last year at 94.5 percent.
For the present administration's campaign of ending contractualization, the labor department reported that some 5,700 employees were voluntarily regularized as of November this year.
Also for this year, minimum wage earners welcomed the Regional Tripartite Wages and Productivity Board’s decision that minimum wage earners shall be entitled to a wage hike of P23 basic pay per day for non-agricultural/industrial/commercial and retail/retail workers and P28 hike for workers in agriculture effective last December 16.
MSME development pushed
Last October, the Department of Trade and Industry (DTI) launched successfully its flagship program "Kapatid Angat Lahat Program" where Davao City has been identified as one of the eight pilot areas in the country.
The program, spearheaded by DTI with Philippine Center for Entrepreneurship, Inc. - Go Negosyo, is seen to capacitate and develop further the Micro, Small and Medium Enterprises (MSMEs) and become more competitive and sustainable in a bid to reduce unemployment, poverty and achieve inclusive growth.
Based on the ageny’s preliminary annual performance 2016, DTI regional director Belenda Ambi said they assisted a total of 9,835 MSMEs or 105 percent of its set target of 9,500.
Stable power supply
For the first few months of 2016, the power industry has been challenged by transmission lines-related problems including right-of-way issues, transmission lines bombings and vegetation. But developments were noted for the last six months of the year, as the power landscape in Mindanao has already entered a surplus regime making the lurking rotating brownouts before a thing of the past.
Presently, the Mindanao Development Authority reported that the island-region has a supply of some 2,300 megawatts (MW) against an average power demand of 1,600 to 1,700 MW.
With the present energy mix wherein fossil fuel is projected to overshadow renewable energy sources, the Mindanao Development Authority and the Department of Energy, and with other stakeholders, strongly push for more renewable energy investments.
Also, the establishment of a spot energy market in Mindanao, Mindanao Power Corporation and interconnection of the Visayas and Mindanao grid are now being looked at.
Upbeat tourism arrrivals
As of the latest data made available by the Department of Tourism, tourist arrivals in Davao Region reached a total of 714,887 for the first quarter of 2016, a hike of 81 percent as compared to 395,145 during the same period in 2015.
Davao City’s position as a Meeting, Incentives, Conferences and Exhibitions (Mice) destination was also strengthened this year as more national and international events were held in the city.
“Apart from the fact that President Duterte’s win, who served as a mayor for Davao for decades, lured more tourists here, the campaign of enabling Davao as a major and preferred Mice destination can be attributed to the increasing tourist arrivals here,” DOT Davao Regional Director Roberto Alabado III said.
Davao Region was also one of four Philippine’s top tourist destinations that will be showcased during the 35th Association of Southeast Asian Nations (Asean) Tourism Forum (ATF), an international tourism gab last January.
Furthermore, the tourism department continues to push for more direct flights to and from Davao City. For instance, Xiamen Air launched a test flight last September between Xiamen of China and Davao City. DOT is also eyeing more international flights within the Brunei Darussalam, Indonesia, Malaysia and Philippines - East Asean Growth Area (BIMP-Eaga) area including Manado-Sandakan-Zamboanga, Kota Kinabalu-Puerto Princesa, Palawan-Cebu and Jakarta-Manado-Davao. Direct flight to Japan is also being negotiated.
On the challenges, one of the biggest bumps in the tourism sector was the Mt. Apo fire last summer.
Better agricultural landscape
The regional office of the Department of Agriculture launched last November the P150 million Southern Mindanao Integrated Agricultural Laboratory (Sominal) which will soon to rise in the village of Manambulan, Tugbok District, Davao City.
DA secretary Emmanuel “Manny” Pinol said the integrated laboratory will revolutionize agriculture in Mindanao.
He also reported that the approval of the free irrigation program and the implementation of the Corporate Farming System are some of the major accomplishments in the agriculture sector for this year.
But it was noted that for the first half of the year, the country's agriculture sector was down following the onslaught of the prolonged El Nino phenomenon. But the agriculture department said, slowly the sector was able to recover from the wrath of the long dry spell.
Rounding up the bloom amid gloom, the business sector in Davao Region is positive that economic gains will be sustained in 2017 and threats and challenges that will come in the way will be hurdled. There's a lot more to look forward to as in 2017, the Philippines chairs the Asean economic group.
