A MULTIBILLION-PESO joint venture to upgrade Cebu City’s historic market has locked local officials into a rigid agreement, forcing a choice between shielding vendors from rising rents and facing severe financial penalties.
The bigger picture
The modernization of the Carbon Public Market began with an unsolicited proposal in 2019 from Megawide Construction Corp. The initial P5.5 billion joint venture agreement (JVA) was signed in early 2020 by the late Mayor Edgardo Labella. By 2022, under then-Mayor Michael Rama, a supplemental agreement was forged to “cure” perceived ambiguities in the original contract. This supplement increased the project cost to P8 billion and guaranteed the City an initial P50 million payment.
Operating under a 50-year concession, the agreement divides the downtown market into two distinct zones. The City retains authority over the public market spaces — which include Freedom Park, Warwick Barracks and Units 1, 2, and 3. In this zone, the developer’s subsidiary, Cebu2World Development Inc. (C2W), is strictly limited to maintenance, facilities management and collecting predetermined fees.
The developer holds full control over the commercial and mixed-use areas, including terminals and future commercial spaces, where it manages leasing and fee collection directly. In the public market, the developer can only intervene in stall allocation if a stall remains vacant for 15 working days and even then, existing vendors must be prioritized to prevent the displacement of registered stallholders.
Why it matters
The central conflict stems from Section 12.3 of the 2021 agreement and Annex D, which mandate a strict schedule of rental increases. Base rents in the public market rose from P16 per square meter in 2021 to P28 in 2024. A separate city regulation, Ordinance 2719, also pushes rates upward to P26 by 2026.
Vendors face compounding financial pressure from entrance fees tied to inflation, utility charges, maintenance costs and a three percent monthly penalty for late payments. Under Section 7.3, non-payment gives vendors a one-month grace period, after which the City is obligated to evict them following a seven-day notice.
If the City attempts to protect vendors by halting these rate hikes, it falls into a financial trap. Section 12.3 outlines specific scenarios that make the City liable to compensate the developer:
Failing to increase public market rental rates and entrance fees according to the mandatory schedule.
Material Adverse Government Action (Maga), such as changing laws or closing roads to the site.
Unjustified interruptions to the developer’s possession of the site for 12 months.
Delays or additional costs caused by city-requested variations.
Unjustified withholding of the Certificate of Final Acceptance once construction is complete.
Expropriation of any part of the project site by the city.
To settle these liabilities, the City would have to extend the 50-year contract term, reduce its own guaranteed revenue share, or pay the developer direct cash compensation.
Furthermore, the JVA mandates site clearance. Residents without formal market rights, such as those in Sitio Bato, are slated for relocation. Failure by the City to clear these areas constitutes an “event of default,” triggering the same financial penalties. While the 2022 supplement added language about “respecting concerns,” the binding legal framework still requires clearing the land.
What to watch
The dispute has moved beyond implementation logistics to whether the contract’s foundational terms can be altered without triggering a fiscal crisis for the local government. The Cebu City Council is preparing a resolution to formally revisit the agreement, examining fee collection boundaries, vendor protections and the City’s liabilities.
Current city leadership has already taken aggressive steps to interrupt the contract. Mayor Nestor Archival froze fee collections in February 2026 after the developer proposed to begin collecting them in March. Concurrently, Vice Mayor Tomas Osmeña petitioned the Supreme Court in January to halt construction entirely.
As the developer pushes to complete the main public market building by December 2026, the City faces a shrinking window to resolve the legal and financial contradictions affecting its 1,000 regular stallholders and 4,000 ambulant vendors. / EHP