Bacolod embarks on mission to become a ‘super city’

(Editor’s note: The Philippine Daily Inquirer begins with this Spotlight issue on Bacolod City a new series highlighting cities and provinces that showcase urban dynamism and economic vitality in a post-pandemic world.)

Negros Occidental, dubbed the “Sugar Bowl of the Philippines,” has retained much of its rustic charm with its colonial-era mansions and vast sugarcane plantations.

But these days, its vibrant capital city of Bacolod, populated by around 625,000 mostly young people, has become highly urbanized, riding high on the business process outsourcing (BPO) boom.

Led by a business-savvy mayor who had made his billions long before entering politics, Bacolod is positioning itself to be a “super city.”

But what exactly is a “super city?” Bacolod City Mayor Alfredo “Albee” Benitez, 56, defines it as a place where people can “live comfortably, have decent jobs, have a playground.”

“Housing, peace and order and everything from waste management to proper urban development, all of that will come into play. There are many pillars,” he says in an interview with the Inquirer.

Based on the report delivered to his constituents after his first 100 days in office, Benitez envisions a “global city with a diversified economy and skilled human resource, and a model of innovation and good governance.”

His first executive order after winning the 2022 elections was to create a good governance committee, citing the need to ensure prudence and proper documentation of transactions particularly in the disbursement and liquidation of public funds.

Benitez has also set the road map for a “greener” Bacolod—one that is able to recycle 80 percent of its waste, generate most of its energy requirements from renewable energy, deploy electric jeepneys and build more public parks.

Raising the bar

The mayor—who had lived and studied in the United States, built thriving gaming businesses in Metro Manila and Cagayan Valley (The company he founded, DigiPlus Interactive Corp., formerly Leisure and Resorts World Corp., is currently valued by the stock market at around P12 billion) and served three consecutive terms in Congress representing Negros Occidental’s third district from 2010 to 2019—is also raising the bar for aesthetics and e-governance.

He renovated the mayor’s office using his own money. He is especially riled by the unsightly “spaghetti” electric wires in the city and resolved to untangle them and put all those cables underground moving forward.

Benitez is also a digitalization advocate. Just recently, the city partnered with GCash to enable digital payments for more transactions, not just property and business taxes. Amusement taxes or even marriage license fees, public market rentals and other fees can now go cashless.

“Lately, I’ve been seeing a spike in business. I checked the regional BIR (Bureau of Internal Revenue) records and we have surpassed 2019. We’re doing well in terms of tax collection,” says Benitez.

Bacolod City produced P120.9 billion worth of goods and services in 2021, based on the latest data available at the Philippine Statistics Authority. Its economy rebounded by 4.9 percent that year, recovering from the 13.9-percent economic recession seen in 2020, when the COVID-19 pandemic prompted tough lockdowns.

The city accounted for 52 percent of the economy of Negros Occidental and nearly 14 percent of the entire Western Visayas.

“Housing, peace and order, waste management and proper urban development— all of that will come into play” – Alfredo Benitez Mayor of Bacolod City

Services, led by business process outsourcing, accounted for 74.6 percent of Bacolod’s economy in 2021. Industry and agriculture comprised 19.9 percent and 5.5 percent, respectively.

“We’re still the recipient of the sugar industry because Negros Occidental province is mainly monocrop [system]. If sugar prices are good, it trickles down to the consumers here,” he says.

To diversify the economy, Benitez wants to develop the industrial segment and bring in manufacturing investments. Tourism is also a key priority as he wants the city to corner a bigger share of the meetings, incentives, conferences and exhibitions (MICE) segment with a maximum of 3,000 participants. (See related story on B4-1.)

Biggest growth driver

Bacolod currently has about 35,000 BPO workers, Benitez says, a number he intends to double in the coming years.

“We’ve been focusing on them, trying to determine their needs, so hopefully they will expand and bring more business,” he says.

Benitez reckons that about 40 percent of Bacolod’s economy is driven by BPOs. All the big names in Metro Manila have a footprint in the city.

Based on the mayor’s estimate that about 40 percent of the city’s economy is driven by BPOs, this segment delivered P48.4 billion worth of services in 2021.

“Bacolod is among the top choice of IT-BPM (information technology-business process management) companies due to improved infrastructure, availability of talent pool, and cost effectivity,” says real estate veteran David Leechiu, founder and CEO of Leechiu Property Consultants (LPC).

Leechiu says it is “the most bustling and progressive city in Western Visayas and the second most popular city in Visayas next to Cebu City.”

The pipeline of infrastructure developments has helped the city “sustain its viability as an investment site and retain its stature as a competitive city,” Leechiu adds.

In school year 2018 to 2019, the city produced 7,833 college graduates, based on a research by LPC. Assuming that at least half of the graduates opt to join the IT-BPM field, Benitez’s goal to double the BPO workforce is doable in 10 years.

There are 24 colleges and universities in Bacolod, 19 of which are privately run while five are state-owned, based on data provided by the city government.

“With Mayor Albee’s leadership, I am hopeful that Bacolod will continue to live up to its ranking as Center of Excellence in IT-BPM,” says Department of Information and Communications Technology (DICT) Undersecretary Jocelle Batapa-Sigue, who had served as city councilor of Bacolod for nine years and helped promote Bacolod as a destination for ICT-enabled jobs and investments.

She chaired Bacolod IT Focus Team, which worked on strategies and programs to develop Bacolod City and Negros Occidental as one the growing centers of innovation in the country.

Sigue notes that Bacolod is already among the “top 100 Super Cities” identified by Tholons International in its latest ranking for 2022, where there is a higher premium placed on the level of innovation of a city.

“I am optimistic that this uptrend will continue with more locators for high-value and complex IT niches will consider Bacolod,” she says.

“One biggest mark of Bacolod, which I think we have shown as an example to the whole country, is the level of collaboration between government, national and local, the industry or private sector and the academe or the talent development sector. There is no substitute for stakeholders’ collaboration in driving innovation and generating jobs and investments. Creating an ideal ecosystem for the IT-BPM industry requires for government to undertake the role of a catalyst and an enabler and for academe and industry to closely collaborate to constantly calibrate competencies,” Sigue adds.

Among the programs that have helped catalyze the BPO industry in Bacolod are the Technical Education and Skills Development Authority IT-BPM Vouchers for Work, the Negros Occidental Language and IT Center project of the province, the Negros Occidental Technology Business Incubator Program (supported by the Department of Science and Technology and Department of Trade and Industry) and the yearly ICT- BPM caravan (supported by DICT and industry associations), says the DICT official.

Sigue also cites the presence of more than 25 Philippine Economic Zone Authority-registered IT Zones in Negros Occidental and one public IT zone, Negros First CyberCentre.

“We are heavy on training. We’re heavy on our academic institutions to be a place [to inculcate] the work ethics and [develop] their skills to meet demand,” Mayor Benitez says.

“In any business enterprise. manpower is the most precious component. Infrastructure you can build. So we have to start from there.”

Robust property market

Like in the National Capital Region, the BPO boom has benefited Bacolod real estate.

“Bacolod is attracting national property players and we see this resulting in the development of more master-planned communities,” property consulting firm Colliers says in a research note.

“Bacolod currently hosts some of the major outsourcing companies that have expanded outside of Metro Manila. In our view, the entry of national developers led to the expansion of Bacolod’s condominium stock, particularly those in the mid-income to upscale segments (P3.2 million to P8 million). Colliers encourages developers to implement strategic landbanking to take advantage of the city’s stature as a growing residential and outsourcing hub in the Visayas-Mindanao area. National players should also consider partnering with local or homegrown players or local governments with sizable landbank,” Colliers adds.

Leechiu says the highest commercial land values in Metro Bacolod are seen along Lacson Street at P111,000 per square meter (sq m), but average values range between P10,000 and P80,000/sq m.

Residential real estate values range from P7,500 to P17,000/sq m, with the highest product selling at P35,000/sq m.

“Residential condominium values in Bacolod are steadily increasing at a compounded annual growth rate of 5 percent to 23 percent,” Leechiu says.

Every month, about 69 new residential condominium units, from middle to high-end segments, are taken up in Bacolod. Leechiu thus expects the supply of upscale condo units (worth P7 to P12 million) to run out in three months, and middle-income units (P2.3 to P4 million) to be depleted in six months.

“Demand for housing comes predominantly from local residents wanting to locate near commercial districts while still being in close proximity of their families’ traditional home, and from families of overseas Filipino workers,” Leechiu says.

Capital values of residential properties are likely to increase as township developments are completed, he adds. “Market acceptance is high due to the appeal of masterplanned communities.”

In Metro Bacolod, residential condominium units are currently selling for P94,000 to P238,000 per sq m, based on LPC research. The low end of the range already approximates that of Alabang or Ortigas area, while the high-end price point is not too far from comparable products in Metro Pampanga, which are selling for P259,000. However, it still has a long way to catch up with the P420,000 top end of Metro Cebu’s residential condominium space.

In office property, LPC research as of first quarter 2023 shows that rental rates in Bacolod range between P400 and P600 per sq m (See table on Provincial Rental Range), still cheaper than Cebu’s P650 to P800 range but already compare well with market prices in Bulacan and Cavite, which are closer to the National Capital Region.

The industrial pitch

Aside from tourism, Benitez also wants to unlock Bacolod’s industrial potential.

During President Marcos’ recent trip to Beijing, Benitez, as part of the Philippine delegation, met many prospective investors. “One of them has expressed interest to put up a manufacturing plant for electric vehicles. Their sample is already here,” Benitez says.

Nanjing-based Jiangsu Fengchuen New Energy Technology Co. Ltd. is into wind, solar, biomass, geothermal and ocean energy. It also has industrial operations, which Benitez wants to bring to Bacolod.

“The purpose is for us to be able to transition public transportation to electric vehicles, and if it’s locally made here, it will be cheaper. Parts will be accessible and of course, it will create jobs,” Benitez says.

There are also investors interested to put up steel and solar battery manufacturing facilities.

“Bacolod is blessed with a lot of land. We’re twice the size of Iloilo and we have contiguous properties that are big enough to accommodate big investments,” he says.

In total, the city has 16,145 hectares in land area or about a quarter of the size of Metro Manila. In tandem with Benitez’s bid to catalyze manufacturing is his goal to shift to clean sources of energy.

Bacolod has about 200 megawatts of energy requirement. Its utility firm, Central Negros Electric Cooperative (Ceneco), has power supply contracts that are expiring soon.

“For the whole province, we have 500 MW of renewable energy. All I have to do is to get out of coal and go renewable,” he says.

The province has solar, biomass and geothermal plants. Palinpinon geothermal facility alone has 250 MW in installed capacity.

To date, 30 percent of Bacolod’s energy mix comes from renewable sources and Benitez is bent on migrating the remaining 70 percent.

“To sell Bacolod to investors, maybe manufacturers, there is a huge influence on the European market if your energy is green. So we would like to position Ceneco to be green, renewable. I think I can do that in two years’ time,” he says.

Also part of Benitez’s sustainability agenda is to boost waste management by building an integrated recycling facility using the public-private partnership (PPP) mode.

“We’re converting 80 percent of our garbage to recycled products. So if others have industrial zones, we’ll have a recycling zone. It’s a series of recycling plants. There will be ones catering to plastic or metals,” he says.

An adjacent ecopark will also be built so that “students can see how it’s done, how [garbage] is transformed” and to “increase awareness on environment protection.” Aside from waste management, he is also keen on using the PPP mode for e-government functions, such as the installation of more CCTV cameras across the city to maintain peace and order.

The PPP route will be used for housing and health-care programs, particularly the building of hospitals and health centers.

For the longest time, Benitez says Bacolod was “just coasting along”—never articulating a long-term vision.

“So, we’re trying to find ways, find our niche in terms of economic development,” he says. Building a “super city” is now his avowed mission.

“We’re trying to find ways, find our niche in terms of economic development” – Alfredo Benitez Mayor of Bacolod City