‘Fire-breathing’ economy in the Year of the Dragon

Aerial shot of Davao City as seen from a plane.
Aerial shot of Davao City as seen from a plane.Ralph Llemit/SunStar Photo

DAVAO Region’s unique geographic position and diverse community contribute a significant strategic role to its accelerating and robust-expanding economic landscape.

In fact, foreign businesses, particularly East Asia and first-world nations such as the United States of America, invest their interest in all pillars that shaped the positive foundation of the jurisdiction today.

Based on the 2024 Socioeconomic Performance and Development Outlook in line with the performance and inflation report provided by the National Economic Development Authority - Davao Region (Neda-Davao), the Philippines’ top-performing region and the industry hub of Mindanao is forecasted to have competitive changes in the economic development, social development, environmental management, institutional development, and peace and security.

This, as strategically curated under the Davao Regional Development Plan (DRDP) blueprint for 2023 to 2028 of the Regional Development Council (RDC), anchored on the Philippine Development Plan (PDP) and on the eight-point socio-economic development agenda of the Marcos Administration to further alleviates the life of every Dabawenyos.

2024 Davao Region Economic Outlook 

Over the years, agriculture accounts for the majority of the region's Gross Domestic Product (GDP). However, the area has also increasingly become a hub for commerce, business, and tourism. Its exports of papayas, mangoes, bananas, pineapples, fresh asparagus, flowers, and fish goods give it a competitive edge in agribusiness. The area serves as a gateway to markets in other regions of Mindanao, Brunei Darussalam, and some sections of Malaysia and Indonesia.

Ramcez Villegas/SunStar File Photo

Inflation

In 2022, the average inflation in Davao Region was recorded at 7.2 percent compared to 6.3 percent in 2023 as reported by the Philippine Statistics Authority (PSA) wherein the increase is primarily attributed to the acceleration in the Food and Non-Alcoholic Beverages sector.

However, Neda-Davao’s recent data showed that in 2024, prices of basic commodities are poised to remain at manageable and moderate levels and that several factors to be considered in determining and achieving low inflation are: Reduced tariff rates; mitigate the impacts of El Niño; intensive social assistance via subsidies; stable global oil prices; sustained remittance flows; higher employment; and increasing the value of the country’s currency.

Labor and Employment 

The region for the past three years has tallied a high employment rate. In 2021, it recorded 94.5 percent, 96.5 percent in 2022, and 97.1 percent in 2023.

In the Year of the Dragon, the regional economic agency aims to have stronger employment facilitation through the Philippine Employment Services Office (PESO) Employment Information System and PhilJobnet, implement and maintain a more user-friendly job-search database; consistency of implementing programs aimed at assisting the vulnerable sectors and individuals across all walks of life; following the labor law; and enhancing the role of Regional Tripartite Industrial Peace Council (RTIPC) in advancing social dialogue and raising awareness about its services.

Investments

Currently, the Neda-Davao supports the programs of the Department of Trade and Industry in the region in strengthening the condition of the micro, small, and medium enterprises (MSME) through innovation and technological advancement. 

The collaboration of the two agencies is also anchored on the National Innovation Agenda and Strategy Document (NIASD) which contains the country’s vision and long-term goals for innovation or to transform the country into a Smart and Innovative Philippines that is productive, resilient, sustainable, and inclusive. 

As the Year of the Dragon unfolds, the Philippines is developing a strategy to turn Mindanao's Davao Region into a premier logistics hub, first as a substitute for Singapore.

It is anticipated that the creation of an international logistics center in the Davao Region will draw in more capital, strengthen the region's economy, promote trade, and enhance connectivity.

However, the initiative has two significant obstacles to overcome. The facilities at seaports and airports fall short of international standards, and there is little integration of the transportation networks. Sasa Port features a small port as well as a tiny dry dock. The airports in Davao and Mati are outdated. The land transportation terminals, seaports, and airports are not connected. Additionally, the area needs a productive urban mass transit system.

To carry out the project, the regional development plan is using a three-pronged approach. It entails enhancing the system of multimodal freight transportation, quickening the construction of logistics system infrastructure along the Davao Gulf, and harmonizing land use plans, ports, and logistics operations.

Foreign Trade

Neda-Davao revealed that foreign trade in the region may be affected due to the unpredictability of the global economy and constraints in terms of exportation and importation.

In the third quarter of 2023, the export value of the Davao Region amounted to USD 1.67 billion with top exports in Banana, Coconut Oil, Other Fruits and Vegetables, Processed Food, and and Gold. 

Ramcez Villegas/SunStar File Photo

Tourism

Davao Region has been an attractive destination for investment, more particularly in tourism and one of the major programs that Davao region has been preparing for is the expansion of outbound and inbound flights.

In line with this, the Department of Tourism-Davao Region (DOT-Davao) Regional Director Tanya Rabat wants Davao City, the business capital of the region, to have more international flights linking the city to different parts of the globe

These international flights will help in Davao Region’s goal of positioning itself as a premiere adventure destination not just in the country but also in the Asean region. Among its major programs is the Davao Adventure Challenge, a year-long campaign of DOT-Davao Region that will introduce Davao’s unique natural attractions and eco-adventure escapades, especially from beaches to mountains. 

Currently, Qatar Airways only runs one weekly flight from Davao to Doha, Qatar. There are three weekly flights from Davao to Singapore on low-cost carrier Scoot, and two weekly flights from Hong Kong to Davao on Royal Air.

The Davao to Manado route will also be opening this year.

Agriculture

This Year of the Dragon, the Department of Agriculture-Davao Region (DA-Davao), will put up major policies into place, the region will be able to maintain the increase of its agricultural output in major Agriculture, Fisheries and Forestry (AFF) sub-sectors such as fisheries, livestock, and palay. This means that the agency will integrate climate change into plans, projects, and programs related to agriculture (such as Climate Risk Vulnerability Assessment); prioritize research and development (R&D) programs and investments; make investments in and improvements to logistics, transportation, storage, and postharvest facilities; and lastly, improve facilities for the identification, diagnosis, and management of pests and diseases affecting plants and animals. 

Education

With the newly introduced education reform system - the MATATAG Curriculum of the Department of Education (DepEd) which was launched last August 2023, aims to provide every Filipino learner, even in far-flung areas, the quality of basic education they deserve and decongest the debatable K-12 curriculum of former President Benigno "Noynoy" Aquino to 70 percent.

In order to expedite the delivery of services and educational materials, the agency has established a Procurement Strand as part of the reforms. On the other hand, the School and Infrastructure Facilities Strand was also created to focus on addressing classroom backlogs and other facilities.

For the year 2024, DepEd-Davao will be funding a total of P1.18 billion for the 301 new classrooms from every division of the region.

In fact, it has been constructing 16 classrooms in the last mile schools, 270 are currently being repaired by the Department of Public Works and Highways (DPWH), and 270 new classrooms are under development.

MATATAG stands as, “Make the curriculum relevant to produce job-ready, Active and responsible citizens; TAke steps to accelerate the delivery of basic education services and provision facilities; TAke good care of learners by promoting learner well-being, inclusiveness learning, and positive learning environment; and, Give support for teachers to teach better.”

Health

For the year 2024-2025, the Neda-Davao plans to implement Phase 4 of Tutok Kainan Dietary Supplementation Program and water safety plan in all water service providers.

The agency is also eyeing to finalize the full operation of the Regional Plan of 2024-2025 Action For Nutrition (RPLAN), craft a more comprehensive supply chain management of health commodities under the Universal Health Care (UHC), establish a provincial health facility development plans for 2026-2030, and conduct mandatory referral system workshops for all the employees of the Local Government Unit (LGU) within the whole timeline of 2024.

Public Order and Security

The Philippine Army (PA) affirmed to continue their insurgency-free campaign in the whole jurisdiction of Davao Region by weakening and destabilizing the decade-reign of communist atrocities, particularly in the hinterlands of the area.

Moreover, the Police Regional Office-Davao (PRO-Davao) plans to establish its Regional Integrated Command Center (RICC), assured the implementation of Metro Davao Public Safety and Security Master Plan, preventing the resurgence of the Communist Terrorist Groups (CTGs) and rehabilitation under the Joint Task Force Agila in their area of responsibility (AOR), deployment of more Revitalized-Pulis sa Barangay and the strengthening of Barangay-based institutions with the collective help of all local government units (LGUs) and government agencies. 

President Ferdinand "Bongbong" Marcos Jr. witnessed the signing of contracts for the Davao Public Transport Modernization Project (DPTMP) on Wednesday, Feburary 7, in conjunction with the celebration of the 125th anniversary of the Department of Transportation (DOTr).
President Ferdinand "Bongbong" Marcos Jr. witnessed the signing of contracts for the Davao Public Transport Modernization Project (DPTMP) on Wednesday, Feburary 7, in conjunction with the celebration of the 125th anniversary of the Department of Transportation (DOTr).Presidential Communications Office

Transportation, Communications, and Energy

At least 76 high-impact infrastructure flagship projects amounting to PHP2.4 billion will be pursued in Mindanao to boost economic development in the region as introduced during the first Philippine Economic Briefing in Davao City last year which aims to ease congestion and improve connectivity in Mindanao.

These include Davao Public Transport Modernization Project, Mindanao Railway Project, Davao City Expressway, Samal Island-Davao City Connector Bridge, and construction of the newly-improved Sasa Port.

Mindanao Railway Project
Mindanao Railway ProjectDOTr
Mindanao Railway Project
Mindanao Railway ProjectDOTr
Mindanao Railway Project Tagum-Davao-Digos Segment

In its current configuration, the system will be built as a network that is 1,544 km (959 mi) long and 2,278 km (1,415 mi) long. 

A circumferential mainline that links several of the island's largest cities will serve as the system's focal point. In addition, a mainline radial running east-west will be constructed to the Zamboanga Peninsula, with several branch lines acting as additional radial lines. 

The Mindanao Railway, like other Philippine National Railways projects, will be built in stages, encompassing segments of varying lengths. Building will begin on the circumferential mainline's Tagum–Digos leg, which is the first phase.

This segment was initially set to be partially opened by 2022, with the rest of its 17 segments being completed by the 2030s.  However, financial and construction delays have plagued the project as a whole. The majority of the project was supposed to be funded by an official development assistance (ODA) loan from China; however, the Philippine government decided not to pursue it in 2023.

Davao-Samal Bridge perspective design
Davao-Samal Bridge perspective designDPWH
Samal Island-Davao Connector

Despite concerns involving right-of-way issues in Davao City, the multi-billion Samal Island-Davao bridge project will still continue to operate. 

The 3.98-kilometer bridge will get significant funding through a loan arrangement with the Chinese government. It is a major project under the “Build, Build, Build” program, which was implemented under former President Rodrigo Duterte's administration.

The bridge project will connect the Samal Circumferential Road in Caliclic, Samal to the R. Castillo–Daang Maharlika junction in Buhangin, Davao City across the Pakiputan Strait.  

Davao-Samal Bridge perspective design
Davao-Samal Bridge perspective designDPWH

This 3.98-kilometer bridge will be built in five years, with completion and operation anticipated in 2027. When finished, the estimated thirty-minute ferry ride from Davao City to Samal should barely take five minutes. A US$350 million (₱18.67 billion) financing arrangement will be used to finance the bridge's construction.

Davao City Bypass Construction Project
Davao City Bypass Construction ProjectDPWH
Davao City Bypass Construction Project
Davao City Bypass Construction ProjectMark Perandos/SunStar File Photo
Davao City Bypass Construction Project

The Department of Public Works and Highways (DPWH) longest road mountain tunnel project in Mindanao is on 40 percent steam of implementation. 

The tunnel’s two ends in the north and south portal are targeted to break through by February 2024, with a total budget of P13.23 billion as financed through the Special Terms for Economic Partnership (STEP) Loan between the Government of the Philippines and the Japan International Cooperation Agency (JICA).

Davao Public Transport Modernization Project
Davao Public Transport Modernization ProjectADB
Davao Public Transport Modernization Project

The project will create a state-of-the-art public bus transportation system in Davao City, the third-largest city in the Philippines, with Euro-5 standard diesel buses and modern electric buses, as well as standardized operations and dependable timetables, an intelligent transport system to support bus operation, and bus lanes in specific road segments. 

The initiative is a component of the Department of Transportation's (DOTr) endeavors to enhance the Philippines' public transportation system by lowering air pollution and greenhouse gas emissions while also fostering a dependable, secure, and comfortable traveler experience.

Modernization of Sasa Port

The Sasa Port Modernization Project with total cost of P6.2 billion consisting of three phases entails building a new apron, a linear quay, expanding the backup area, building warehouses and container yards, and installing new machinery such as rubber-tyred gantries and ship-to-shore cranes.

SUSTAINABLE WATER. Apo Agua’s Water Treatment Plant, located in Brgy. Gumalang along the Bukidnon-Davao Highway, uses a water-energy nexus concept, where the water used to generate power is treated and supplied to DCWD water reservoirs.
SUSTAINABLE WATER. Apo Agua’s Water Treatment Plant, located in Brgy. Gumalang along the Bukidnon-Davao Highway, uses a water-energy nexus concept, where the water used to generate power is treated and supplied to DCWD water reservoirs.Apo Agua
Water Resources

Between 2022 and 2030, the Davao City Water District (DCWD) plans to build three septage treatment plants. DCWD will be able to provide Davao City residents with septage management services after the first treatment facility is finished in 2023. 

Under the City Ordinance 0363-10, the local government is mandated to establish septage, sewerage, and sewage treatment plant or facility in partnership with the local water utility which aims to to lower down the contamination of rivers with coliform bacteria that comes from human and animal wastes that end up in the sea.

Francisco Bangoy International Airport (Davao International Airport)
Francisco Bangoy International Airport (Davao International Airport)Macky Lim/SunStar File Photo
Infrastructure Projects

The regional economic agency said that one of the major much-anticipated projects to be completed within 2024 is modernizing the state-of-the-art facilities of the Davao International Airport (DIA). 

The Civil Aviation Authority of the Philippines (CAAP) will continue to pursue the modernization of the DIA this year through the following projects: completion of the construction of a parallel taxiway; provision of taxiway lights and restoration works; and resurfacing of runway, strip grade correction, site development of the new terminal area, construction of apron and taxiway construction of vehicular parking area and access road.

Davao Region's 2024 economy

Taking pride in its vibrant business climate and good trading activities, the Davao Region's gradual shift to industrialization started in 1996. 

Considered as the greatest important region in the Philippine archipelago, the region forecasts a positive economic growth in 2024 to succeeding years by comprehensively taking the Philippine Development Plan (PDP) goal of attaining deep socioeconomic transformation not just in the economic structure of the area itself but also to the welfare of its constituents by reducing the poverty incidence from 16.8 percent in 2021 to about 9.5 percent or 9.9 percent in 2028. DEF

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