4 Reasons Why Davao is Ready for Investment
Statistics from the PSA (Philippine Statistics Authority showed a total of 381.5 billion pesos was registered by the region of Davao when it comes to foreign investments that were all approved for the first two quarters of the year 2018. This proves that Davao is ready as the next destination for investments reinforced by Republic Act No. 11032 (Ease of Doing Business and Efficient Government Service Delivery Act) for a more efficient and easier business management in the Philippines. Find out what are the city’s high economic indicators and the status of the real estate industry.
A Boost in Local Tourism
Davao City is the go-to destination when it comes to conferences, exhibitions, and meetings. The city only has 1 5-star hotel while all the rest are 3 and 4 stars and the occupancy rates have averaged to about 94 percent every year. About 2.1 million tourists were also accounted to have entered the city year 2017 which boosted the local economy.
Lower Crime Rates
Davao City’s crime rates dropped by 37.6% due to the increase in police officers from 910 (2017) to 1,310 (2018). Business expansions also mean more career opportunities that result in a lower unemployment rate. This makes the city even a safer place for investors to conduct their business transactions. Peace and order in the city are being maintained by Davao’s PNP and Task Force Davao which is a special military group. The curfew instilled by former Davao City Mayor and now President Rodrigo Duterte also reinforced safety in the city at night including the ban on clubs to sell alcoholic drinks beyond 1 am.
More Effective System When It Comes to Collection of Revenues
The local government has instilled policies that made it easier for city dwellers to live in the city and for investors to manage their businesses. This allowed the city’s economy to grow by 10.9% compared to the last 4 years. The revenues collected in 2017 tallied to 7.2 billion pesos and the collection for the first half of the year 2018 already reached 4.9 billion pesos.
High Presence of Foreign Expats and Migrants
This attracted countries such as Malaysia, China, Japan, and Indonesia in opening a Consulates-General in Davao City. The United States and Palau, meanwhile, have consular offices. This allows more opportunities for foreign investors to put up businesses that also increased the revenues of the local government. Experts are looking into foreign relations as the gateway to increased investments by foreign companies and business owners.
Real Estate Sector
As far as the real estate industry is concerned, there is still a lack of hospitality and accommodation spaces. Thus, the local government is encouraging investors to look into hotel and convention developments to address the high demand for tourist arrivals. 90% of the tourist influx can be attributed to domestic travelers followed by foreigners.
The lack of hotel accommodations is the cause of very high accommodation rates and real estate experts suggest that an increase in supply is the only solution to lower the rates down. A study has revealed that about 1,000-1,500 hotel rooms are still needed to fill in the gap caused by a lack of hotel rooms. Although these estimates are still not enough to produce the number of supply needed in the tourism sector.
Davao is the largest economy outside Metro Manila in the southern Philippines. As the main hub of Mindanao when it comes to financing, commerce, trade, and industry, Davao’s economy is expected to take a leap in the coming years. All the more that investors are urged to take part in investing in Davao’s real estate sector to accommodate the lack of hospitality rooms for the tourism industry.