By JOHN TRIA
Several economists have already opined and have begun becoming more hopeful for Mindanao’s economy.
Not just because its average growth is higher than the country’s at 7.7%, but because its own contribution to overall Gross Domestic Product (GDP) has begun to increase relative to other regions.
A look at our Gross Regional Domestic Product tables from 2016 to 2018 reveal steady increases in the overall GDP shares of key Mindanao regions relative to others. This simply means that as the country grows, Mindanao grows alongside it and may already is exceeding other regions in doing so.
This change in prespective comes to challenge long beliefs of many policymakers that dismissed Mindanao as a poor, violent backwater that will forever be a net beneficiary of limited national government budgets that can do little to improve lives.
But as attention has now been given the island’s potentials, starting with a slightly larger share of national budgets and slowly improving infrastructure, these have had a direct effect on economic numbers.
With these macroeconoic developments, people’s perceptions are changing.
Investor sentiment from Manila and key economic hubs in Asia now see Mindanao as an investment destination worth exploring.
This comes as no surprise given that the economic growth figures beat those of many ASEAN countries. This means that Mindanao’s nearly 26-million population, which is near Malaysia’s total and bigger than Laos, Cambodia, and Brunei combined is slowly becoming more affluent. With this comes a taste for new and better lifestyle choices and products.
Apart from the numbers, other signs support the view that Mindanao’s economy has become more attractive.
The increase of honorary consulates and the establishment of consuls general for China and Japan and additional direct international flights are key drivers to spur direct trade.
Property prices in key Mindanao cities have accelerated, showing robust demand for commercial properties. In key commercial districts of Davao, prices per square meter are nearing P100,000. Similar increases to a lesser degree have been observed in Cagayan de Oro and Iligan, where new commercial developments have opened to meet higher consumer demand.
Mindanao reached its highest-ever electric consumption in May 8 at 2,013 megawatts, the highest in history.
This shows that demand for property and electricity are key indicators of higher levels of economic activity.
Peace initiatives may already be bearing fruit. The absence of large encounters between government and rebel forces show a steadily improving peace and order situation.
Other recent events indicate increased interest.
The revival of the barter trade council and increased maritime security cooperation with neighboring Malaysia and Indonesia point to more harmonious relations that can spur revitalized cross border trade with Malaysia and Indonesia, which are an overnight boat ride away.
The recent signing of a memorandum of agreement between the Davao City Chamber of Commerce and the Financial Executives Association of the Philippines heralds the interest of many in Manila’s financial circles to look at Mindanao as an investment location.
In the upcoming Davao Investment Conference on June 20-21 at Davao’s SMX Convention Center, several delegations from various Asian countries are expected to arrive, a first since events such as these were organized early this decade. It positions Davao as a Southeast Asian investment destination.
These robust economic numbers position Mindanao as a key economic hub in ASEAN. As investments come in, particularly manufacturing companies, the close proximity to other fast-growing ASEAN economies allows Mindanao to easily export its excess products and import to meet supply gaps when needed to fuel tis possible surge.
This ability enables continued robust economic activity. It looks like the government’s economic team deserves credit for helping the countryside increase its economic output with policies and programs geared towards spreading wealth and opportunity.
With the positive numbers and signs mentioned, it is no surprise that Mindanao’s growth will be boosted further.
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