Bernardo M. Villegas
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Rebalancing Strategy
published: Mar 31, 2017



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CDO Gateway to Southern Philippines

           As the hapless Metro Manila residents will suffer a "traffic hell" in at least the next three years with the implementation of 15 construction projects, the younger generation should do everything possible to move economic activity away from the imperial Capitol to alternative metropolitan regions.  My number one candidate is Cagayan de Oro, adjudged as the Philippines' most competitive city today.  Last February 12, more than 300 investors, national and local officials, members of the academe and NGOs congregated at the Intercon Hotel to listen to speakers describing the bright future of CDO as a strategic choice to do business.

          I was the first speaker and I told the audience that the sources of growth now and for the coming five to ten years are OFW remittances (about $25 billion annually); revenues from BPO/KPO companies (about $12 billion now and ballooning to more than $20 billion in the next five years); about 20 million domestic tourists and more than 5 million foreign visitors; increasing infrastructure spending by the Government; and the renaissance of manufacturing as more and more Japanese and Korean industrial firms relocate their operations from China.  These developments will generate a great deal of consumer spending among the middle class, increasing the demand for high-value food products, like fruits, vegetables and livestock.  This explosion in demand will be good for the agribusiness hub that is developing around CDO, especially in such areas as Bukidnon that is already a top producer of such high-value crops as pineapple, coffee, and livestock. As all the speakers agreed, Metro CDO is an agribusiness hub which provides direct access to rich agricultural areas of Mindanao:  a source of 40% of the country's food and livestock.  This strategic position will be especially advantageous in the coming years when food will take the place of energy as the most critical resource in the global economy, especially as China significantly increases its demand for high-value food products.    Metro CDO is already the top cattle--and third largest poultry--producing region.  It also has significant production of oleochemical and other coconut products such as bananas, as well as fresh and canned pineapples for export.  As sugar is phased out in Luzon, Bukidnon and the surrounding areas will become one of the most competitive regions in the production of sugar as the country is opened to cheaper imports from Thailand and Vietnam with the dawning of the ASEAN Economic Community.

          Metro CDO will play a major role in this AEC market because of its endowments as a logistics hub.  Its international port facilitates direct and cost-efficient movement of containerized cargoes to Manila, Cebu and international shipping centers.  Multi-berth baseport handles inter-island passenger travel with connectivity to the country's nautical highway and the logistics corridors of Mindanao.  The newly opened Laguindingan Airport, built to international standards, services air logistics requirements.  An extensive road network leads to and from the major production areas and markets of Mindanao. CDO will surely attract a good number of the Japanese and other foreign manufacturing firms relocating to the Philippines from China because of the easy access to materials and markets.  The region, having some high-quality educational institutions, also boasts of a rich pool of human resource that can supply the needs of both manufacturing and service establishments, including the fast growing  BPO/KPO sector.

          Finally, the Metro CDO has a most diverse set of tourist attractions, ranging from agritourism in Bukidnon, white water rafting, pristine beaches in Camiguin Island, mountain resorts in Dahilayan and Malaybalay, and a very dynamic art and culture calendar.  Domestic and foreign tourists can spend a whole week in the region without getting bored because of the variety of sights and activities that are offered in this gateway to Southern Philippines.  In time, Metro CDO will be one of the expanding "rurban" metropolis that can significantly decongest the National Capital Region that is already suffocating from overpopulation.  The case of CDO illustrates that while the national capital is overpopulated, the whole country is terribly underpopulated.  Population management should be focused, not on limiting the number of births, but in redistributing the households away from Manila to such promising regions as CDO.  For comments, my email address is bernardo.villegas@uap.asia