GROWTH PAINS

By: Jose Santino S. Bunachita, Victor Anthony V. Silva February 22,2017 - 10:49 PM
The baywalk area at the South Road Properties (SRP) is among the early structures built within the 300-hectare property originally envisioned to be Cebu City’s economic power house. (CDN PHOTO/TONEE DESPOJO))

The baywalk area at the South Road Properties (SRP) is among the early structures built within the 300-hectare property originally envisioned to be Cebu City’s economic power house. (CDN PHOTO/TONEE DESPOJO))

Officials say conflicts surrounding Cebu City’s new economic zone, the South Road Properties, can spur development in other growth areas outside Cebu City

While recent developments at the South Road Properties (SRP) could spell possible repercussions for Cebu City, other prime locations in Metropolitan Cebu, as well as the rest of the Visayas, may look at this as an opportunity for growth. And Cebu City’s loss could be their gain.

President Rodrigo Duterte’s assistant for the Visayas, Michael Dino, has told investors, now having second thoughts about pouring their money into Cebu City, to take a look at other areas in the Visayas like Mandaue City.

The Cebu Provincial Capitol, meanwhile, is open to dialogue with potential investors to convince them to bring their business to other growth areas in the province, instead of dropping their plans to invest.

“Maybe we can convince them to visit and possibly consider bringing their businesses to other growth centers in Cebu province such as Danao and Bogo up north, Minglanilla down south, Consolacion in the eastern side, and Tuburan in the west,” Cebu Provincial Board Member Miguel Antonio Magpale, head of the committee on trade and commerce, said.

Magpale added that there are several types of businesses that can be placed in different parts of the province.

Magpale said he would even recommend that businesses, such as a steel plant in Compostela, should be placed in the countryside to decongest traffic in the city.

MICHAEL DINO/JUNE 25, 2016 Interview with Michael Dino, presidential assistant for Visayas. (CDN PHOTO/CHRISTIAN MANINGO)

DINO

As for Dino, Mandaue City, he said, was showing “very positive” signs of being ready for business.

“I told them to take a look at other areas in the Visayas. Well, Mandaue is very positive. Mayor Luigi Quisumbing is definitely showing to the world that Mandaue is ready for business,” Dino told Cebu Daily News in a text message on Wednesday.

Dino earlier said that about seven businesses involved in tourism, real estate, and retail have expressed fears on investing in Cebu City after what happened with Filinvest Land, Inc. (FLI) this week.

Last Monday, FLI announced that it was going to cancel its purchase agreement with the Cebu City government for a 19.2-hectare lot at the SRP after the city failed to comply with many covenants and obligations under the contract.

Cebu City Mayor Tomas Osmeña, who earlier questioned the deal entered into during the incumbency of then mayor Michael Rama, welcomed FLI’s move.

Osmeña has also been very vocal in his plan to rescind not just FLI’s contract but also that entered into by the consortium of SM Prime Holdings Inc. and Ayala Land Inc. which purchased a 26-hectare lot in the SRP back in 2015.

In November last year, Osmeña filed a case against the management of SM Seaside City Cebu, another SRP locator, for alleged tax fraud.

Business leaders in Cebu, Dino included, said all these may affect Cebu’s image to prospective investors, with some businessmen already putting on hold plans to set up shop here.

Dino said that although he told these prospective investors to take a look at other thriving areas in the region, he still encouraged them to invest in Cebu City.

Dino, however, maintained that Osmeña was being a “bully”, “anti-business” and “anti-poor”.

OSMEÑA

OSMEÑA

In a talk with reporters yesterday, Osmeña strongly took exception to Dino’s claims.

“Anti-business? It is being anti-corruption. It’s not anti-business. Anti-corruption means I am protecting the businessmen here who are not corrupt.

These people who try to be corrupt, they say I am anti-business. Well, I am anti-corruption. I am anti-crime. I am anti-tax evasion,” Osmeña said.

“When I took my oath of office, I promised to enforce the law without mental reservations or purpose of evasion. I didn’t know SM and Ayala are exempted. Parehas gyud ang (It’s the same) treatment. I don’t care who you are. If they don’t like that, let them change the law,” added Osmeña.

“If you commit crime, Dino, you are not exempted. Neither is anyone else,” warned the mayor.

Economic zones

When the 300-hectare SRP started, it was envisioned to be one of the premier economic zones in Cebu, given its short distance from the city’s central business district.

It is currently home to several big projects such as SM Seaside City Cebu as well as FLI’s 40-hectare City di Mare and Il Corso.

Other special economic zones in Cebu City are the Cebu Business Park and Asiatown IT Park.

There are also special economic zones in Mandaue City, Lapu-Lapu City, Danao City, Naga City, and Balamban town.

In an attempt to spur development in the countryside, the Board of Investments (BOI) launched a program last year to help towns in the province attract more investors to their respective localities.

Ellorence Cruz, BOI Cebu OIC chief, said that while investments continue to pour into Cebu, bringing these to the rural areas remains to be a challenge for stakeholders.

“Rural areas need infrastructure support. Infrastructure that facilitates the mobility of goods and services such as seaports and airports are all in Cebu City. Therefore, the investments are all here,” she said in an earlier interview.

The South Road Properties is considered Cebu City's single biggest growth area.

The South Road Properties is considered Cebu City’s single biggest growth area.

On the part of the BOI, Cruz said they could teach towns in Cebu how to make the most of what they have amid the lack of infrastructure support.

The BOI has partnered with the Cebu Investment Promotions Office (CIPO) in conducting capability building workshops and seminars on crafting the Local Investments Promotion Code for towns in the province.

The BOI started going around the province  in November last year, prioritizing the “less developed areas” such as Ginatilan, Malabuyoc, Pilar, Ronda, Samboan, and Tudela, among others.

Cruz earlier urged local and regional development councils to also explore ways to bring more projects to these areas, to eventually decongest Cebu and its neighboring cities.

BOI-registered projects in Cebu grew to P27.3 billion as of October 2016, around P1.7 billion more than projects logged for the whole 2015 which amounted to P25.6 billion.

As of Oct. 4, 2016, 15 projects were registered with the BOI, 13 of which are under mass housing while the other two are under renewable energy and transportation mostly based in the cities of Cebu, Lapu-Lapu, and Talisay.

Growing concern

Mandaue Chamber of Commerce and Industry (MCCI) president Glenn Soco said there is a growing concern among businessmen and investors about the issue at hand.

“Business is also about perception and it concerns any businessman or investor if there is uncertainty and volatility in the political and business landscape,” Soco said.

Soco said Mandaue, as one of the premier cities in Cebu province, has always been an attractive option for businesses and investors to locate.

SOCO

SOCO

He said MCCI is confident that the strong partnership between the Mandaue City government and the business sector, complemented by a sound business environment and friendly economic policies, will pave the way for local enterprises to grow and more investors to come.

Melanie Ng, Cebu Chamber of Commerce and Industry (CCCI) president, said the whole Cebu province has always been attractive to investors, not just Cebu City.

Development has been slowly expanding from the highly urbanized cities toward the countryside, even more so under the present administration’s thrust for regionalization.

“Not only are we located strategically, but the presence of an international airport that is expanding with more direct flights to international destinations is an added advantage,” said Ng.

She added that the presence of a strong talent pool, not only in Cebu but from around the region, will assure investors of a steady labor force.

World-class facilities with ample amenities that meet international standards are also available, Ng added.

“That is why we have to make sure we do not lose the attractiveness of Cebu for investors to come. We have to strategically work together to bring more investments to Cebu,” she said.

GARGANERA

GARGANERA

“Bad business”

Cebu City Councilor Joel Garganera also believed that the mayor’s move to rescind SRP contracts entered into at the time of former mayor Michael Rama was “bad business” and could set a bad precedent for other interested investors in the city.

“Dino has not brought in any investor, just like Garganera. Garganera has not brought in any investor to Barangay Tinago, not even a restaurant, KFC or Mang Inasal. Who are they to lecture me about bringing in or driving away investors?” Osmeña said.

As to the concern of some businesses, the mayor said only those who are corrupt will be concerned.

“He (Dino) is deeply concerned. The tax evaders and the corrupt are deeply concerned. Well, they should be deeply concerned because I’ll send them to jail,” Osmeña said.

Asked if he had any message to Dino, Osmeña simply said, “Alis d’yan (Go away).”

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TAGS: businessmen, Cebu, Cebu City, Consolacion, developer, development, investments, investors, Michael Dino, Minglanilla, South Road Properties, Tomas Osmeña

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