Davao City: PH Next Investment Destination

Can Davao City Become The Philippines' Next Investment Destination?



Annalisa Burgos, Contributor
Forbes.com
31 July 2019

Perhaps the Philippines' most underrated investment destination is its largest city in terms of area. Davao City has long attracted adventurous entrepreneurs and businesses for its rich natural resources and opportunities for economic growth, and yet, security issues in the southern region of Mindanao continue to deter many investors.

Victoria Plaza Mall on J.P. Laurel Avenue. Getty

Drive through Davao City and you’ll see the tell-tale signs of a growing metropolis–high-end condos and malls, construction sites and traffic congestion. Philippine President Rodrigo Duterte is credited with bringing progress to the hometown he led as mayor for more than two decades before moving to Malacañang Palace. Today, his children are following in his footsteps: daughter Sara Duterte-Carpio is the current mayor and his son Paolo is a congressman and other son Sebastian is city vice mayor.

In the private sector, wealth and power remain mostly in the hands of the homegrown elite: pioneer families unfazed by global stigma who invested in the city’s agribusiness, real estate, logistics and infrastructure thought too risky by their counterparts in the north. Meantime, bold foreign investors saw profit potential in this “Wild West” and blazed a trail–like Lars Wittig, country manager of Regus & SPACES by IWG Philippines.

Wittig began seeking new markets in Mindanao some 30 years ago, first for tobacco giant Philip Morris, then Dole’s plantation empire, and now for a leading operator of flexible workspaces. He says one of the biggest indicators that Davao was the place for Regus to invest was the number of gas stations, McDonalds and even the Starbucks he saw in 2012.

“This is really becoming a ground zero for all types of industries to venture into,” Wittig explained, noting the need to alleviate the burden on Metro Manila and shift operations to tier two cities like Davao. “We all know how difficult it is to maintain productivity [in Manila] and meanwhile down here, there’s less competition for a very young and IT-savvy population.”