USDA: Davao, Cebu are new growth hubs as Manila overheats
Davao and Cebu are seen as the next drivers of the country’s consumer growth especially in the food sector, according to a report.
The Philippines should look for alternatives as Manila could eventually reach the limit of its potential due to the city’s rapid population growth resulting to congestion, a yearlong review of the United States’ Department of Agriculture (USDA) read. “As the city of Manila faces limits to growth imposed by traffic, congestion and other urban planning issues, the cities of Davao and Cebu are expected to pick up a substantial portion of that growth.”
The report noted Davao City alone can generate an increased sales of $630,000 over the following year given the right marketing promotions. “Food service proved to be a particularly strong channel for product sales in Davao,” it added.
Aside from frozen and processed meats, other products seen to be profitable for both cities included frozen potatoes, fruit juices, snacks, dried fruits and nuts, and bakery ingredients.
In addition, the presence of port facilities in both Cebu and Davao that allow direct shipment would also support growth, USDA said. As direct shipment in these cities becomes more common, USDA is expecting the cost of imported products to drop significantly through the years.
President Duterte, the longest serving mayor of Davao City, has helped put the city in the spotlight by bringing international leaders to its shores, including Japan Prime Minister Shinzo Abe and Indonesian President Joko Widodo.
Earlier this year, a new sea route connecting Davao City, General Santos City and the port city of Bitung in East Indonesia was launched for roll-on, roll-off vessels.
Currently, over 85 percent of cargoes pass through the Manila port, including those shipped onward to other destinations in the Philippines.
“Although both cities have long lagged behind the national capitol, Manila, in size and income, it is growing more rapidly, and is expected to become an important center for demand in the near future,” USDA said.
The city of Davao, known as the urban center of the country’s second largest island Mindanao, is home to over 1.6 million. Cebu, a major hub in the Visayas region, houses a population of 2.9 million. —KARL R. OCAMPO
