Economic Dynamism drives CdO as Vismin’s Most Competitive City
CAGAYAN DE ORO CITY – The City of Golden Friendship celebrates this Fiesta Month its citation as the Philippines Most Competitive City outside Metro Manila and Numero Uno in the Visayas and Mindanao.
Cagayan de Oro has been ranked by the National Competitiveness Council (NCC) as the second most competitive city in the Philippines in 2014 after Makati City, the country’s premier financial district. It also ranked second in infrastructure, fifth in government efficiency, and ninth in economic dynamism.
Although it only ranks 9th in the country’s Top 10 cities in economic dynamism, it is the lynchpin which drives Region X as the fastest growing region in Mindanao with an average annual growth rate of 5.8 percent over the last 1o years, figures from the National Economic Development Authority (NEDA) Region X office shows.
The NCC’s “Economic Dynamism” scores were based on data on the size and growth of the local economy as measured by business registrations, capital, revenues, and occupancy permits; capacity to generate employment; cost of living; cost of doing business; financial deepening; productivity; and presence of business and professional organizations.
With its sustained economic growth and the leveling up of its competitiveness recently, the possibility of Cagayan de Oro becoming Mindanao’s new business and financial center is no longer remote, according to
Cayetano Paderanga Jr., former NEDA director-general and a noted economist, referring to the city’s possible status as Mindanao’s new economic leader in the near future.
He said things are looking good for the city, as it is experiencing positive growth.
Paderanga added that with a local economy that keeps on growing, “the prospects for the next three years looks promising, it could extend to five or even seven years. And if we improve the governance, then the growth rate can even go higher.”
“Cagayan de Oro is a very thriving regional economy,” he said, adding that the city has most of the fundamentals covered: peace and order, stable power, very good human resource and enough investors to keep the local economy afloat.
Led by Cagayan de Oro, Northern Mindanao is the runaway domestic trade leader in Mindanao, its PhP 57.9-billion (2010) accounting for 11.3 percent contribution to the Philippines (Commodity Flow, NSO) and the leading agriculture producer in Mindanao for the period 2010-2012 (National Accounts, NSCB).
“It is the largest producer of pineapple in the country, the second largest producer of bananas and corn, the third largest producer of coconut and chicken, its fourth largest producer of cattle, its fifth largest producer of swine and the ninth largest producer of palay,” noted NEDA Region X Dir. Leon Dacanay, Jr.
Northern Mindanao also has the biggest industrial sector among Mindanao’s regions for the period 2010-2012 as well as the highest manufacturing output over the same period. Consequently, it was also the top revenue producer in electricity and water over the same period. (National Accounts, NSCB), he added.
Not surprisingly, Mr. Dacanay said the region is now at the threshold of full employment with a 94.9 percent employment rate over the last three years (Labor Force Survey, NSO).
“Cagayan de Oro is the best place I’ve invested in. Though I have investments in other countries and in Cebu and Davao, I saw a very strong middle class in CdO more than anything else,” A Brown Co. Inc. Executive Chairman Walter W. Brown said during the “Connect and Do Business in Cagayan de Oro” forum held 12 February 2014 at the Grand Ballroom of the Intercontinental Manila.
A Brown has signed a memorandum of understanding with the city government to build in Barangay Tignapoloan a 1,300-hectare oil palm plantation, 50-metric ton per day capacity oil refinery and provide technology, seedlings and training.
Guillermo D. Luchangco, Chairman and CEO of the ICCP Group, said its overall competitiveness was what swayed the group to locate its Pueblo de Oro Township in the city.
“Pueblo de Oro Development Corporation (PODC) did not just throw a dart at the board when selecting Cagayan de Oro as an investment site; we actually did a thorough study,” Mr. Luchangco said during his testimony at the same forum.
“This study showed that Cagayan de Oro offers many attractions to businesses in terms of economic prospects, availability of quality human resources ready and willing to work, infrastructure and accessibility. It is, pardon my English, a damn nice place to visit or to invest in or to live and work in.”
But it was the “hard numbers” which convinced the ICCP Group to locate its largest real estate project in Cagayan de Oro.
He cited the 7.4 percent growth rate in 2012, higher than the national average of 6.8 percent, with higher average annual family income and expenditures (as of 2000 the latest year for such information was available for Philippine cities), both higher than those of Davao, Cebu or the entire country’s average.
As a developer of residential and mixed –use properties, Mr. Luchangco said PODC also found the higher than average concentration of middle income people in the city’s overall population as another plus factor due to the substantial share of trade and commerce in the local economy. This, on top of its agricultural production in its hinterlands and proliferation of fast growing tourism destinations.
In addition, the group’s study revealed that Cagayan de Oro also enjoys lower labor costs, power costs with electricity charges lower than neighboring cities or the national capital region, on top of a similarly low crime rate.
“Cagayan de Oro has since developed into a city which offers many beautiful, comfortable and modern villages for an expatriate, or a Filipino from another part of the country, to live in with his family should his work take him there.
Launched 07 August 2014 at the 2nd Regional Competitiveness Summit, the Cities and Municipalities Competitiveness Index (CMCI) measures competitiveness at the local government level using 28 indicators grouped into three equally-weighted pillars: Economic Dynamism, Government Efficiency, and Infrastructure. Scores on each pillar were combined to form the overall score used to rank cities and municipalities.
“The award brings more inspiration and courage to pursue to their logical conclusions the reform programs that have been initiated, particularly on government efficiency, infrastructure and investment attractiveness,” Cagayan de Oro City Mayor Oscar S. Moreno said upon receiving the citation at the PICC. “Cagayan de Oro’s enhanced competitiveness not only benefits our people and the region, but the entire Mindanao as well!”
Makati topped the overall rankings with an overall score of 53.242174, followed by Cagayan de Oro (49.363393), Naga City (49.075166), Davao (47.16761) and Marikina City (45.465443).
The CMCI 2014 featured a record number of 136 cities and 399 municipalities, up from 122 cities and 163 municipalities in the pilot run in 2013 which was topped by Cagayan de Oro.
The results highlight the importance of being competitive in several factors, especially those which are closely examined by potential investors. It should be noted that the top three cities and municipalities for overall competitiveness also received at least one award in a category.
In addition to pursuing across-the-board competitiveness, NCC Private Sector Co-Chairman Guillermo M. Luz advised stakeholders at the Regional Competitiveness Summit to work together in building cities and municipalities which are affordable, accessible, socially-acceptable, environmentally-friendly, economically-viable, and climate-resilient. The CMCI was designed to encourage local governments to regularly track data and eventually benchmark performance against other cities in the ASEAN to better manage their regions.
The CMCI was developed by the NCC through the Regional Competitiveness Committees (RCCs) with the assistance of the INVEST Project of USAID. City and municipality data used in the CMCI were voluntarily submitted by the RCCs.
For the third straight year, Northern Mindanao has the highest Gross Regional Domestic Product (GRDP) per capita among Mindanao’s regions and maintains its rank as the 6th highest among the country’s 17 regions in per capita GRDP. The per capita GRDP of Northern Mindanao increased by 3.6 percent in 2013, that is, from PhP 53,122 in 2012 to PhP 55,060 in 2013.
With Cagayan de Oro city as its economic driver, Northern Mindanao was identified by the Philippine Statistics Authority (formerly National Statistics Office or NSO) as the most labor productive and profitable region in Mindanao in the 2010 Annual Survey of Philippine Business and Industry (ASPBI).
Northern Mindanao recorded the highest in revenue per worker, value added per worker, average revenue per establishment, and average profit per establishment among the Mindanao regions
Workers from Northern Mindanao are more productive far ahead from other regions, recording P2.18 million revenue per worker in 2010. Region 11only posted P1.52 million per worker at second, followed by Region 12 with P1.48 million per worker.
Region 10 was also the most productive in 2010 in terms of value-added per worker posting P593, 000 per worker, followed by Region 11 and CARAGA Region with P493, 000 and P392, 000 per worker, respectively.
Northern Mindanao also posted an average revenue of P265 million per establishment for the period, surpassing Region 12 which ranked first among Mindanao regions in 2009. Region 10 further recorded the highest average profit per establishment at P34.9 million followed by Region 11 at P32.9 million.
The ASPBI is a nationwide undertaking of the NSO which aims to provide key measures on the performance level, structures and trends of economic activities in the entire country. The annual survey is confined to the formal sector of the economy, such as the corporations and partnerships, cooperatives and foundations, single proprietorships with employment of 10 or more and single proprietorship with branches.
According to the NSO, a total of 23,630 establishments were selected for the 2010 ASPBI with an overall response rate of 95 percent.
In the latest recognition of the city’s economic dynamism, it was selected as a pilot area for the implementation of Republic Act (RA) No. 10644 (Go Negosyo Act) which was signed into law by the president last July 15, 2014. The “Go Negosyo Act” seeks to strengthen micro, small and medium enterprises (MSMEs) to create more job opportunities in the country, encourage individuals to start micro-businesses and eventually allow MSMEs to create local jobs, production and trade in the Philippines.
DTI-10 will establish a Business Resource and Innovation Center for SMEs (BRICS) towards this purpose by the end of the month.
(with a report from the National Competitiveness Council)