What is so special about the Davao region?
THIS ARTICLE is about the rise of Davao as a regional economy. It has nothing to do with the current political campaign. (Disclosure: I am a Dabawenyo and proud to be part of a diverse community of immigrants and natives).
The Davao region (formerly Southern Mindanao) had a population of about 4.6 million in 2010, and may have reached five million in 2015.
It has a land area of over two million hectares. It used to be only one province until 1967 and the last string of governors were Alejandro Almendras, Vicente Duterte and Paciano Bangoy, in that order.
The area has five provinces and six cities: Davao del Norte, Compostela Valley, Davao Oriental, Davao del Sur, and most recent, Davao Occidental.
The cities: Davao City (the premier city), Tagum, Mati, Digos (provincial capitals), Samal Island, and Panabo (my hometown).
Some 1.5 million people reside in Davao City.
My family from North Cotabato settled in 1950 in Barrio Little Panay, Panabo as the government distributed former Japanese-run abaca plantations under the then National Fiber Company.
My wife’s family from Cabugao, Ilocos Sur settled in Davao City to manage a business.
Panabo, not Davao City, is the Cavendish banana capital of Asia.
Davao region has the largest gross domestic product (GDP) among the seven regions in Mindanao.
Its GDP accounted for about four percent of the nation. It is dwarfed by National Capital Region’s 36.3 percent, Calabarzon’s 17.2 percent, and Central Luzon’s 9.3 percent in 2014. Its regional GDP growth averaged over seven percent in 2012 and 2013. It recorded the fastest growth in 2014 at 9.4 percent.
Its ports, Sasa port and 18 private ports such as main ports, Davao International Container Terminal in Panabo and Tefasco, are the major agri-food export outbounds in the nation.
Davao City is the main financial, education, medical and trade hub of the Island.
As an educational center: establishment of Mapua institute soon; influx of medical school students from India on the rise, and higher education attracting North Sulawesi (eastern Indonesia) students.
It is also a leading convention destination. There is also a growing call center sector in the region, mostly in Davao City. The region is a vital link to markets in other parts of Mindanao.
The region’s role in Asia include: leading exporter of banana in Asia, and second or third in the world after Ecuador and Costa Rica; leading exporter of coconut products in the country, e.g., coconut oil and desiccated coconut; and leading exporter of banana chips.
How did these arise?
The industry clusters are relatively developed: Cavendish banana, banana chips, coconut products, and cacao tablea.
The leading companies include Dole, Tadeco, Sumitomo Fruits, Unifrutti, Lapanday (Cavendish banana), Legazpi Oil, New Davao Coconut Oil Mill, Davao Bay Coconut Oil Mill (oil milling), Franklin Baker (dessicated coconut), Dacon (fruits), Sagrex (frozen saba), Profood (dried fruits) and others.
Internal Analysis: An export culture, entrepreneurial class, and educated people area mong the strengths of the region.
Generally, local governance is good. But progress is threatened by insurgents’ taxation on mines, especially in Compostela Valley.
External Analysis: Opportunities beckon in the growing food market in Asia. At the same time, competitors in Asean countries are lurking in the horizon.
The Asean Economic Community is a double-edged sword. It is a highly competitive market. The increasing frequency of extreme climate change events is a threat.
Typhoon Pablo in 2012 destroyed farms and infrastructure.
With all these factors, what about inclusive growth?
There were 1.41 million poor in 2012, up from 1.36 million in 2009, and 1.27 million in 2006, a steady climb. This meant that poverty incidence barely changed to 30.7 percent in 2012, 31.4 percent in 2009, and 30.6 percent in 2006, higher than national average of 25.2 percent.
This is the ultimate Davao challenge: how to reduce poverty by generating jobs and higher income jobs.
There are still idle lands to develop, farm productivity to be raised, infrastructure to be built, and investors to be attracted, among others.
The thought leaders of Davao know these. A middle class society must be built for social cohesion.
(The article reflects the personal opinion of the author and does not reflect the official stand of the Management Association of the Philippines or MAP. The author is the vice chair of the MAP AgriBusiness and Countryside Development Committee, and the execuitve director of the Center for Food and AgriBusiness of the University of Asia & the Pacific. Feedback at [email protected] and [email protected]. For previous articles, please visit map.org.ph.)
