The Economy of Davao City

Like the rest of the country, Davao City operates on an economic system that is market-oriented, although pricing mechanisms remain regulated in a few sectors (particularly on basic commodities) to protect consumers.

The competitiveness of the market has been enhanced through the dismantling of protection for "infant industries" and the breakdown of industries with monopolistic or cartel tendencies.

On the international front, the economy has been opened up to global competition, through a tariff reduction program and the loosening of restrictions on inward foreign investment.

The result is a diverse economy, featuring a sound mix between the agricultural (roughly 45%), industrial (15%) and service (at around 35%) industries.

Poverty reduction has become the main goal of the local government which is being addressed through programs and projects one of which is the encouragement of inward investments to industries that are labor-intensive.

Fortunately for Davao, private investments has Davao City’s economy is steadily growing in the last two decades. The City has shifted counting investments from millions in the 80s to billions in the 90s and up to the present millennium.

Among Asian cities, Davao has maintained its competitive position in attracting investments and in penetrating new foreign markets owing to its resilient exports base, peaceful business climate, better quality of life, and rich pool of skilled workforce.

With over 1.2-Million people as primary market base, the city is conducive to business as evidenced by the presence of the country’s top 200 companies.

Inflow of investments has been remarkable in the last ten years. Export in the City is now billion dollar industry with a growing niche market for its products.

The stable banana and flourishing pineapple industries are among the country’s leading export commodities. A net exporter since 1987, Davao City largely contributed in making the Philippines as the world’s top 3 banana exporter.

Primarily an agricultural area, almost all kinds of fruits thrive in Davao including the exotic Durian. Other major agriculture-based exports are pomelo, mango, coconut, papaya, mangoosten, and even flowers.

The productive linkages between established businesses and Davao City community reinforced the competitive quality of life in a city that has consistently maintained single digit inflation rate since 1993.

Along with flourishing investments and exports, the low inflation rate serve as concrete illustration of the remarkable gains from Davao City’s sustained competitiveness nurtured by high level of responsiveness of the local government which put priority focus in facilitating business-friendly initiatives and in ensuring a peaceful and prosperous environment.



Source : Davao City

Davao has pool of workforce ready for BPO sector

DAVAO City is not only flying high with the growth of business processes outsourcing (BPO) companies but it also has a pool of workforce ready for the booming sector.

Based on the assessment of Concentrix, one of the largest BPO companies operating in the city, the labor pool at hand is one of the best in the country.

"The absorption rate of applicants is at seven percent, the highest in the country. Metro Manila and Cebu has an average of only three to four percent," Gerardo Dumael, Concentrix manager, told reporters on Wednesday.

On a larger scale, Dumael said similar figures can be applied with the BPO sector as a whole in Davao City.

"With such large pool, covering up to Digos and Kidapawan in the South and as far as Tagum and Davao Oriental, Davao City has big potential for the BPO sector," Dumael said.

Concentrix started operations in Davao City in 2006 with an initial workforce of 60. This ballooned to 280 by 2007, 490 in 2008.

"At present we have 900 workers as of 2009," Dumael said.

On Wednesday, President Gloria Macapagal-Arroyo expressed optimism over the growth of the business processes outsourcing companies in Davao City, one of the "Next Wave Cities" in the country's information and communications technology sector.

Arroyo visited the Concentrix business processes outsourcing office at Damosa IT Park in Lanang.

The cyber corridor is one of the five development areas mapped out by the Arroyo administration in 2006 to spur economic growth and regional productivity.

Official data showed that there are more than 446,000 IT-BPO workers, from what started with only 2,400 employees in 2000 nationwide.

Revenues generated by the BPO industry in 2001 was pegged at only $0.02 billion, a far cry from last year's $7.3 billion earnings posted.

Published in the Sun.Star Davao newspaper on February 8, 2010.

Green tourism making inroads in Davao City

You just arrived at your hotel and after switching on the light, which you will later find out is a CFL or Compact Fluorescent Lamp, you then proceed to the bathroom for a leisurely warm shower without knowing that the heat that warmed the water could have come from a pump that collects heat from other sources which is then converted into reusable heat. Those are just a few of the many characteristics that would make a hotel environment-friendly.

The foregoing is not a make-believe scenario but what is actually being practised by The Marco Polo Davao. The hotel also segregates its waste to limit its carbon footprint to a minimum. With these green practices, it should not come as a surprise that The Marco Polo Davao was one of Philippine hotels that received the Asean Green Hotel Recognition Award.

The Marco Polo Davao experience should be an eye opener to other tourism establishments in Davao City that are still pussy-footing over the practice of green tourism.

“There are numerous tourism establishments, and to many of them sustainability is costly,” said Dr. Stefanos Fotiou, regional coordinator of the Resource Efficiency United Nations Environmental Programme. Fotiou flew all the way from Thailand to Davao City to talk on “Greening the Tourism Industry: The Role of Standards and Certification” during the Green Tourism Forum held at The Marco Polo last week.
Marco Polo general manager Nigel Fisher said the tourism sector is such a major player in the world economy that there is no place or continent in the world without any tourism activity.

“Tourism has a significant impact in the world economy,” he said, “but consumption and the residual products left behind should be a cause for concern.”

Mary Anne Montemayor, convenor of the Green Alliance for Davao which organized the event, said green tourism is nothing new, but the sector should be encouraged to go for environmentally-friendly practices within their establishments if only to minimize the effects of climate change.


“The green tourism idea has become exponential in view of calamities like typhoons Ondoy and Pepeng, the El Nino phenomenon and the Haiti earthquake,” Montemayor said. All these calamities make climate change real for all of us, she said, and it is time to take collective action and make a difference.

“It may be too far out for the ordinary citizen to relate tourism with climate change. But take note that the moment a tourist books his flight and gets his ticket for a certain tourism destination, it is already equal to a significant carbon footprint that can contribute to global warming.”

As Fotiou put it, “A typical tourist will consume three to eight times more water than a local in the destination.” It is thus important that tourism facilities lessen their carbon footprint as much as possible to help in the campaign against global warming, Montemayor added.


“Green tourism is the only way for the future; it has to be a movement and with its growth it can result to a more affordable way of doing things the green way,” Marco Polo Davao executive assistant manager Art Boncato said.

UN campaign for Green Tourism
Fotiou said 83% of the world’s tourism industry is dominated by small and medium enterprises who find sustainability costly. Despite this, he said, tourism has a great potential to contribute to sustainable development.
Among the United Nations initiatives to promote sustainable development is the green passport campaign and the sustainable coastal tourism campaign. It has also established the Global Sustainable Tourism Criteria (GSTC) and the Tourism Sustainability Council (TSC) which will be launched this month. The TSC aims to develop GSTC, accredit certification programs and spread awareness of sustainable tourism.

He said the strategy is to encourage tourism business to voluntarily adopt the basic green guidelines so they can become more sustainable.

Fotiou said the GSTC is the minimum basis for the standards to be accredited. However, he added that global sustainable accreditation will not work because there are different situations unique to Davao and to other tourism destinations.
He suggested that the green tourism initiative should start as a local initiative to be accredited by the national organization and then the GSTC.


Fotiou also made mention of Envirotel which is one of the UN initiatives to promote green tourism. This is a simple and practical guide that will assist hotel managers and staff to incorporate environmental practices in their daily operations. The small hotels will be able to download this tool for free once it is uploaded on the UNEP website.

Local green initiatives

Marco Polo Davao is, however, not the only tourism establishment in the city that has started to go green.

“Green tourism is now practiced by some responsible resorts and tourism players and the Davao Gulf Management Council has in fact acknowledged some in the hope that others will follow,” Save Davao Gulf Foundation, Inc. president and Councillor Leo Avila III said.

Toryanos, a local native chicken house, is also keen about green tourism and has already started implementing green changes by using environmentally-friendly products for its chicken house. Used barbecue sticks have also been recycled and are now used by the chicken house to fill up its walls.

SM City Davao, another tourism establishment, has also strengthened its environmental protection advocacy by making sure that all the lights inside the mall are CFLs since they use less power and have a longer rated life. The Mall also partnered with the Davao Light and Power Company for the CFL Exchange Project. It is also involved in the “Trash to Cash” campaign. SM City regional operations manager for Mindanao Debby A. Go, said the company’s core environmental programs are in the areas of energy efficiency, water conservation, air quality efficiency and solid waste management. It has also spearheaded the green bag campaign. The World Wildlife Fund (WWF) has recognized SM City Davao for its best environmental advocacy and campaign.

Green Alliance

Montemayor said there are a lot of pressing environmental issues affecting the Davao region’s tourism industry, foremost of which is the power crisis. She said the industry is one of the major users of energy and it is important that the tourism sector start embracing an energy-saving lifestyle.

By using CFL, Department of Energy chief science and research specialist Engr. Antonio de Guzman said, the consumer could save up to five kilowatt hour which is equal to P37.50 per month. This, he added, means foregoing up to 2.1 kg of CO2 emission.
Montemayor said promoting Davao City as a major green destination will not only help the region but will also contribute to sustainable tourism. Green tourism could actually mean tourism areas that are bent in protecting their environments. These are areas that are proud of their environmentally safe practices, from resorts, restaurants and even hotels that are unpolluted and with minimal carbon footprints.

Department of Tourism-Tourism Services and Regional Offices undersecretary Oscar P. Palabyab said there is a market for green tourism and “Davao City will be the Green City of the Philippines.” He said it is all about creating communities that are clean and healthy, which will then create the tourism markets.

The world’s temperature is rising and the effects are already manifested in terms of the calamities that the whole world is experiencing. While the Philippines is not among the big league countries that pollute the environment with their carbon emissions, the country’s largest city in terms of land area can make a dent in lessening the world’s carbon footprint by going green.

Source: EDGE Davao The Business Weekly (www.edgedavao.net)

Anflocor- Ayala Center Rising in Davao City

DAVAO CITY—It is the single, largest investment ever in the city.

The construction of the P5-billion Ayala Center on a 10-hectare property along J.P. Laurel Avenue here has started and is expected to be fully operational by 2011.

Jaime Ayala, president of Ayala Land Inc. , said it took six months of discussions to finalize a partnership deal with the Antonio Floirendo Corp. (Anflocor) for the project, known as Abreeza.

The entry of ALI here is seen as a positive indicator by the local business chamber.

“It’s a welcome development. It will bring many livelihood and business opportunities for Dabawenyos. It will complete Davao’s claim as the Philippines’ third major city and queen city of Mindanao,” said Simeon Marfori, president of the Davao City Chamber of Commerce and Industry Inc.

Ayala said the city’s stable peace and order situation and the positive performance of retail sales pushed the group to finalize the joint venture, which he called “a gargantuan project.”

Davao City is only 60 hours from Digos City, the site of a series of bus bombings, the latest one on Sept. 1, which killed six people and injured 30.

Based on the Abreeza fact sheet, ALI will invest 67 percent of the total development cost while Anflocor will contribute 33 percent.

The mall itself will occupy 61,000 square meters while a business process outsourcing (BPO) center will cover 18,000 square meters.

During a press conference at the Pearl Farm here on Tuesday, Ayala said that the first phase of the mall’s construction will be completed by 2010 but the BPO component can already operate by 2009.

“The project’s total cost is estimated at P4 billion to P5 billion,” he said.

Corporate social responsibility

Ayala vowed the company would fulfill its corporate social responsibilities.

He repeated its stance on the nondisplacement of the communities at the back of the property, saying the company would provide road access in the area.

Ayala said facilities would be open as indoor venues for various activities of the communities as other malls elsewhere.

Maria Christina Brias, Anflocor director, said that the project would employ at least 11,000 people from the construction phase until full operation.

“We are optimistic that the number will grow given the multiplier effect, which the BPO center stands to create when it fully operates,” Ayala said.

Officials of both companies said aside from jobs to be offered by Abreeza, businesses that would be put up near the mall could also generate local employment.

Residential, commercial

At least three hectares of the entire property will be sold for residential or commercial purposes.

“Both companies will also step up marketing promotions to lure both local and international investors to locate in the area,” Ayala said.

This early, local and foreign companies have started inquiring about the possibility of locating at Abreeza, according to Marivic Añonuevo, senior vice president and group head of Ayala Malls.

Good mix of companies

“The queries are indicators that the city is more than ready to host new labels, shops, and stores that have not yet located here,” Añonuevo said.

She said the interest from this “good mix” of companies that offer higher-end and quality products was very encouraging since the marketing strategies for the project was still being developed.

On concerns that traffic would worsen in the area, Emilio Tumbocon, ALI senior vice president, said the company would construct a loading and unloading bay for passengers so that the main road would not be congested and alternative routes would be opened.

Davao City -Smoke free

By official health numbers, it’s been a success. Davao City was recently awarded by the US-based Global Smokefree Partnership for its exemplary leadership and commitment to a smoke-free environment. Davao was the only city awardee along with countries Turkey, Colombia, Guatemala and India.

Since the ordinance was implemented in November 2002, Davao City has recorded a decreasing number of cases of lung cancer, said Dr. Domilyn Villareiz of the Anti-Smoking Task Force, Monday (Jan. 4) at the Kapehan sa SM.
Mortality rate from lung cancer dropped from 118 in 2008 to 38 in 2009. Ninety percent of them were heavy smokers, smoking one to two packs a day, said Villareiz, while 10 percent were non-smokers. In 2008, 153 got sick of lung cancer, while 104 were recorded in 2009.
These numbers show the direct effect of the smoking ban on improving people’s health, which, after all, is the intent of the law. The ordinance cannot be expected to stop people from smoking, but it protects non-smokers.
In seven years, 9,244 violators have been apprehended. From 1,500 in 2008, 1,193 were apprehended last year.

But as anyone who has partied in Torres St. will tell you, there are still many violators – establishments and people. This despite the required posting of restaurants of signs warning against smoking and a maximum penalty of P10,000. Establishments can apply for a smoking room, as some coffee shops and hotels have done. The task force has approved only nine smoking rooms in the city because “we discourage putting [them] up,” says Villareiz. But there have been no closures of establishments that violate the anti-smoking ordinance. “They comply if we give them the notice of violation,” she said.

Still, she admits they can’t monitor all establishments. There are only 18 of them in the task force, which is why they need the help of Davao City police. But they can only do so much.
Says Davao City Police Office chief Sr. Supt. Ramon Apolinario, “Though we have regulations on smoking, drinking, and loud noise, we still respect the rights of entrepreneurs to make money. Torres St. is the converging point of those who want to see and be seen. It is booming, especially on weekends.”
Villareiz doesn’t see a conflict between business and anti-smoking. “The ordinance is not a threat to business or tourism. It’s for public welfare,” she says.


In fact, Davao City has become a tourist destination for orientations on a smoke-free city. Villareiz says visitors from Manila, Hanoi, and Bangkok have come here to witness how a city implements the anti-smoking policy.
“It’s the in thing now for cities to be smoke-free,” she says. And Davao, as its lawmakers and people will tell you, was first.