Is Davao Growing Faster Than The City Can Handle?News!

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Categories: News,
March 21, 2018, 9:46 a.m.

DAVAO CITY—Manila’s congestion and Cebu’s saturating business panorama are turning opportunities over to this city, whose snowballing attraction for business and investment started way before President Duterte became the country’s 16th Chief Executive.


But when Duterte became President, what used to be a convention destination for years also saw a steady influx of relocating or expanding corporate operations.


This city is now experiencing a sudden swell in inquiries and actual corporate and business operations, and tourism and housing. Naturally, concerns over sustainability and its ability to continue absorbing the robust growth have been raised.


As of last year alone, it breached the 2-million mark in tourist arrivals. “This, as travel advisories have come in succession in the last two years for foreign nationals visiting Mindanao.”


“Now, hotels are reporting overflowing guests and could not accommodate any more guests if national conventions or national gatherings are held simultaneously,” Arturo Milan, president of the Davao City Chamber of Commerce and Industry, told
the BusinessMirror.


Milan brushed off the explanation that the trend was due to the usual convergence of business and politics into the hometown of any incumbent President to seek favor and political clout.


Rather, it is the attraction and the emerging potential of places to turn in real production and income numbers that has magnetized business, investment and tourism. “Businessmen and investors don’t just rush in to places without actual potentials for a return in their investment.”


The Davao region is actually turning in good production statistics for investors in the several years that they were here, Milan said. “With the President pouring in the much-needed support not given before by other presidents, the attraction has become much publicized now and is more attractive to do business in.”


Investment swell


THE City Investment and Promotion Center said the city has now more than 40,000 new and renewed businesses, with a total aggregate capitalization of P270 billion, or more than $5 billion. The total number of businesses was an 18-percent increase from the previous year.


This year the total number of businesses would likely surge by another 6 percent. Tourism had also another great year, breaking the 2-million mark by the end of last year. It was double what the Chinese ambassador promised last year, that he would be bringing in 1 million Chinese visitors to the country.


Tourism arrivals are likely to get another boost, as Qatar Airways announced it would mount direct flights to Davao City any time this year. It officially announced its new route during the opening of the ITB Berlin Convention in Germany, Milan said.


Not only local businesses were agog with the swelling inquiries and actual investments but foreigners, as well.

Japan, China and Malaysia were the top-3 countries where their investors have been frequenting the city for local partnering and site inspection.


One Japanese businessman would be coming over by the end of the month to finalize his plan to put up a chocolate-processing business here. Cacao production here and the rest of the region accounts for more than 80 percent of total national cacao production.


Next week, the Taiwan International Trade Development would pack 25 businesses in food processing, fishery and equipment to a business match with local businesses.


Last week Chinese businessmen in agriculture, medical supply and water distribution also went around for prospective partners and

location finding.


Canadian businessman Asaad Qureshi, president and CEO of Skynora Premium Offices, opened early this month his business-process outsourcing seat-leasing office at the fourth floor of Robinson’s Cybergate Delta building along Bajada Avenue here.


“It’s the peace and secured feeling to be here that convinced me to establish my first business venture,” he told the BusinessMirror.


“It’s an exciting time for Davao City,” Milan said.


Absorptive capacity


MILAN expressed his concern, though, with the absorptive capacity of local businesses.  “Foreign business and investment operations need local partners because of the constitutional prohibition of foreigners to own wholly their business here.”


Many local businesses continue to hesitate in going big time, he said, as he corroborated the earlier observation of the regional Department of Science and Technology, which disclosed that few avail themselves of the department training and acquiring of new gadgets, technology and machines that would have improved processing, production and efficiency.


“There are many who remained contented with the current small magnitude of their businesses,” he said.


Not only Davao City, but the composition of the businesses in the country was still accounted by the micro, small and medium enterprises.  “There are some who already graduated to become big. Unfortunately, many are still MSMEs [micro, small and medium enterprises].”


Preparation under way


“THE city, and many other cities, should now have taken the posture of investment capture, not only investment promotion,” he added.  He said there should be already export processing zones, not only accreditation of buildings as economic zones.


It was laudable though, he said, that City Mayor Sara Duterte has ordered the discussion of the Davao City and the Davao region master planning, “enlarging the horizon of development so that not one city or province would be congested.”


For example, he warned, the concentration of condominiums, offices and malls along the stretch of Bajada highway here has posed serious congestion in this northern approach to the city.


“We are creating an Edsa here,” Milan said. “It’s good that Mayor Duterte foresaw the traffic situation in the city and prepared a plan,” he added.