A vibrant city-A A +A
Thursday, March 13, 2014
IN the past couple of years, Davao City has been enjoying a strong economic boom. This is evident with the construction going around the city, from high-rise condominiums to new commercial complexes. In the coming years, Davao's skyline will be dominated by high-rise buildings, a visual representation of the city's strong economic growth.
Based on the 2013 Economic Situationer and 2014 Outlook of Davao City of the Davao City Investment Promotion Center (DCIPC), the city posted a 3.3 percent increase in total investments in 2013 as compared to the previous year.
The situationer showed that total registered capital of the businesses in Davao City grew from P196.408 billion in 2012 to P203.04 billion in 2013, breaching the P200-billion mark.
DCIPC officer-in-charge Ivan C. Cortez said growth in investments showed the business environment in the city is getting stronger and becoming more conducive to businesses. He also said the city's competitive cost of doing business and its stable inflation rate makes the city an attractive investment destination to many.
Last year was also the banner year of the in terms of business renewals as it breached the 30,000 marked. Total business renewals last year was at 30,339, this is a 3.14% increase from the 29,415 business renewals in 2013.
A survival rate of 84.68% was also recorded among the businesses in the city for 2013. Data shows that of the 35,826 registered businesses in 2012, 30,339 have renewed in 2013.
The situationer said that the "survival rate in 2013 is within the norm for the past five years and is a reflection too of stable business environment."
Data showed that from 2008 to 2012, business survival rate remained above 80%. In 2008 the survival rate was at 90.41%, in 2009 at 82.48%, in 2010 at 82.73%, in 2011 84.22%, and in 2012 85.09%.
"Our survival rate is comparatively higher than other cities. Usually the survival rate is around 65 percent to 75 percent," Cortez said.
Exports also rose by almost 8.85% from $1.465 billion in 2011 to $1.6 billion in 2012. The situationer states that Banana remains as the top dollar earner for the city. Coconut oil, rubber, desiccated coconut, and fresh and canned pineapples were also other export commodities of the city.
Japan remains as Davao's top importer of products for two decades. Also part of the top five importers of Davao products are China, Netherlands, Korea, and the United States.
Top import commodities include: mineral fuels or oils, fertilizers, cereals, miscellaneous chemical products, and plastics.
The tourism industry in the city also continues to grow. 2013, recorded a 32.93% increase in tourist arrivals, from 1.075 million in 2012 to 1.429 million in 2013. Estimated tourist receipts also increased from P12.81 billion in 2012 to P17.02 billion in 2013.
For 2014, a boost in the business process outsourcing is seen after Cushman & Wakefield Philippines, a branch of the New York-based commercial real estate services firm Cushman & Wakefield, cited Davao City as the best alternative location for BPO activities in the country.
The study said that Davao City makes a viable alternative city for BPO companies because it has relatively low climate and geophysical risk and relatively high results in the NWC scorecards for presence of relevant infrastructure and business environment and risk management, solidifying itself as a good alternative to Metro Manila and Metro Cebu for occupiers and tenants.
According to the firm's research publication, this is based on the 2012 Business Process Association of the Philippines' Next Wave Cities (NWC) and the geohazard maps produced by the Ateneo de Manila University's Mapping Philippine Vulnerability to Environmental Disasters project.
"With these assessments, foreign property consultants are expected to lay down some of the ground works for BPOs and other related companies to start locating operations in the city to join a considerable number of big players which have already established their presence," said Cortez.
He also said the BPO industry is not only exclusive anymore to the voice-market but also in other areas like applications and software development, analytics, big data, and mobile.
However, Cortez said there will be challenges in the service sector on how to continually serve and attract a huge market "given the uniqueness of the city with due consideration to the restrictions being imposed (smoking ordinance, time limits, restrictions for serving liquor, and operating videoke and similar sing-along facilities)."
Investment opportunities are huge in agribusiness, tourism and recreation, light manufacturing and assembly, property development, health and wellness, education and sports, green projects, information and communications technology, power, transportation and infrastructure, and public-private partnership projects.
"The role of Davao City as a convergence place in Mindanao for business, tourism, finance, transportation, education, and medical activities, among others, can only mean more opportunities for cashing in on the economic vibrancy that has been enjoyed by business players in at least the last 10 years," Cortez said.
Published in the Sun.Star Davao newspaper on March 14, 2014.