DAVAO City closed 2025 reaffirming its standing as Mindanao’s premier business and commercial hub, backed by sustained investor confidence, major real estate developments, expanding mall projects, and a retail sector that continued to adapt to changing consumer behavior. Businesses faced cost pressures and price shifts during the year, yet many pushed through with investments, innovation, and expansion.
Inflation trends shaped spending patterns across the Davao Region in 2025. After two months of deflation mid-year, inflation rebounded to 0.6 percent in September, driven largely by rising costs for housing, utilities, fuel, and transportation. Food inflation remained mixed. Some staple prices softened, but vegetables, oils, and fats increased sharply, pushing up certain household expenses and tightening budgets for low-income families.
Compared with 2024, when inflation stayed more persistent, the 2025 price environment was more stable. Business groups said the predictable inflation trend eased operational planning, reduced uncertainty in procurement and logistics, and allowed enterprises to move into 2026 with greater confidence.
Investment activity continued to signal trust in Davao’s growth story. Data from the Davao City Investment Promotions Center showed that after logging more than P3.4 billion in investments in 2024, the city recorded P237 million in approved investments in early 2025. Manufacturing and industrial firms — including Aerwall Philippines and Nakashin Davao International — led the new commitments. These projects strengthened logistics-linked activity, highlighted workforce readiness, and reinforced Davao’s appeal to export-driven and processing industries. Business chambers credited streamlined permitting and investor engagement, while Davao City’s recognition as one of the Most Business-Friendly Local Government Units by the Philippine Chamber of Commerce and Industry affirmed those gains.
Growth drivers
Real estate remained one of the city’s strongest economic pillars. Developers continued to expand toward Tugbok, Toril, and Mintal, where condominium launches stayed active. The Chamber of Real Estate Builders Association reported that despite a steady supply, the market showed no oversupply signals in 2025, reflecting sustained population and housing demand.
Master-planned communities gained traction, with projects such as One Lakeshore Drive in the Davao Park District integrating residential, commercial, and leisure spaces — a growing preference among professionals and young families.
Damosa Land Inc. figured prominently again in 2025, rolling out developments across residential, commercial, and industrial segments under a P850-million development budget. The Damosa IT Park retained high occupancy levels driven by BPO and office locators, reinforcing Davao’s position as an alternative outsourcing hub outside Metro Manila. In Panabo, agri-residential projects such as Agriya Gardens and Kahi Estates reflected growing demand for lifestyle and suburban living communities. The company’s partnership with Davao Light and Power Co. for a new substation at the Anflo Industrial Estate supported expanding industrial activity. At the same time, preparations for the TRYP by Wyndham Samal hotel highlighted confidence in tourism-linked real estate.
Retail expansion and mall redevelopment
One of 2025’s most symbolic milestones was the closure of Victoria Plaza Mall — the city’s first full-scale shopping mall. Robinsons Land Corporation has taken over the 9.6-hectare property for redevelopment into a modern mixed-use business hub anchored by office towers and commercial components, marking a shift from traditional mall retail toward corporate and service-oriented districts.
Retail and mall expansion remained a major economic driver. SM Lanang Premier sustained high foot traffic and hosted trade fairs and expos that supported local entrepreneurs, while SM City Davao expanded its tenant mix to meet value-conscious but experience-seeking consumers. Abreeza Mall held its position as the city’s premium lifestyle destination with healthy leasing activity from international brands and specialty dining concepts.
In southern Davao, NCCC Mall Maa emerged as one of the most anticipated developments of the year along MacArthur Highway. Business groups projected that the project would create thousands of jobs, stimulate economic activity in Maa, Talomo, and Matina, and open new leasing opportunities for small and medium enterprises.
Tourism provided strong spillover effects across hospitality, food service, retail, and transport. Davao’s recognition as the Best City to Visit in the Philippines lifted visitor arrivals, while the rollout of the Davao Tourism Passport encouraged travelers to explore more destinations, community enterprises, and local food hubs — spreading gains to small businesses and local guides.
The European Chamber of Commerce of the Philippines–Southern Mindanao Business Council projected Mindanao’s economy to grow 6 to 7 percent in 2025, outpacing the national GDP forecast of about five percent, citing strong performance in tourism, ICT, BPO, and real estate.
As 2025 ended, Davao City entered 2026 with cautious optimism — supported by sustained investments, an active real estate pipeline, major redevelopment projects, and a resilient retail and tourism economy that continues to anchor its role as Mindanao’s strategic growth center. DEF