(Editor’s Note: As a fitting gift to Dabawenyos and others who care to know, Edge Davao presents this incisive and factual article by Antonio V. Figueroa, researcher, historian and author, on the saga of Davao as Mindanao’s premier city.)
Before Davao’s elevation to cityhood, it had 88 years (1848-1936) of experience made complicated by two colonial periods with conflicting views of the region’s potentials. The Spaniards, focusing mainly on proselytization and Catholic catechism, left little in terms of developing administrative skills in running the pueblo. Piety, more than management ability, was priorityzed. In education, memorization was more prepared than critical thinking.
Though the Americans introduced secular education and Protestantism, the United States and Spain’s perspective on the Moro and tribal opposition to foreign domination was similar. Without enough superior firepower, Spain failed to control the Moros while the US was unable to contain the struggle for self-autonomy of the Moros, which resulted in genocide and mayhem. The same colonial perspectives were also introduced in Davao town, differing only in their approaches.
Under US rule, the city’s economy was under foreign control. This was so because the colonists adopted a capitalist policy that allowed any enterprise with money to invest. With the creation of the Commonwealth preparatory to the granting of Philippines independence, power, transport, pier, and communication became tools of progress that hastened the city’s growth.
What triggered the creation of Davao into a city was attributed to the increasing Japanese influence in the local economy. As the world demand for abaca grew, so were the profits of the Japanese who held lands through dummies. Conscious the trend would make Davao the milking cow of aliens, Davao Rep. Romualdo C. Quimpo, on March 16, 1936, filed House Bill No. 609, which sought the creation of Davao as a chartered city. It was later passed and signed into law by President Manuel L. Quezon as Commonwealth Act No. 51.
Ruins and liberation (1937-1947)
Though the first mining venture in Davao started as early as 1933, Mineral Exploration and Development, a pioneering firm, launched its initial exploration a year earlier. This was followed by Davao Gold Mine, with original claims of the Hijo area, which started gold production in 1940, a year before World War II broke out.
The arrival of war negated the city’s improvements. Commercial areas were flattened, roads linking to interior regions were eviscerated by aerial bombs, power supply was totally wiped out, population centers devastated, and nearly every trace of a city on its way to becoming an economic leader in Mindanao disappeared.
With the last smoke of conflict gone, Davao Light and Power Company, Inc., despite its flattened structures and damaged machinery and equipment, was revived in 1946. The Aboitiz family took over as new owner from its American investors. This was the first positive sign the city was slowly dusting off itself from the nightmare of war that literally destroyed its central business district as well as the population centers in the countryside.
Rise from the ashes (1948-1957)
In the next few years, the national government, in an effort to bring back normalcy to the lives of veterans and those who lost their loved ones in the conflict, opened Davao region, in particular, to migrants, and allowed logging, which was instrumental in opening jobs and increasing tax revenue for the local government. On the side, the distribution of alienable and disposable lands saw the influx of migrants and, by extension, the strengthening of the informal business sector which catered to the manpower sector.
Mining did not return until 1955 with the operation of Samar Mining Company, which harvested gold from its Masara mines. Later, North Davao Mining Corporation joined the Hijo exploration. More ventures later participated in the mining industry, capped by the future discovery of the Diwalwal gold rush. The rise of mining was significant on two points: first, the companies sourced for their industrial needs from suppliers in Davao City; and (ii) the gold rush that affected Compostela Valley encouraged the Bangko Sentral to open a branch in the city.
During this period, the revival of the abaca plantation also took a positive turn. Demand for the hemp cord in the world market was on the rise, especially for maritime and naval uses. To consolidate his interests, Don Antonio Floirendo Sr. founded the Tagum Development Corp. on December 20, 1950. Two years earlier, on April 14, 1948, he established the Davao Motor Sales to address the automotive needs of the city.
Also in 1948, the San Pedro Hospital was opened under the management of nuns. Five years later, Apo View Hotel, owned by the Pamintuans, became the first high-rise billeting facility in the city. Indonesia, on December 17, 1953, opened its consular mission in Davao City, focusing mainly on trade and economic engagements.
The positive atmosphere that followed the city’s liberation also saw the rise of new Filipino entrepreneurs who invested in schools, radio broadcasting, and newspaper publication. It was from this period that the oldest media outlets (dxAW, Mindanao Times, and Mindanao Mirror) and post-war educational institutions (Mindanao Colleges, Rizal Memorial Colleges and San Pedro College) were founded. Other economic disciplines later joined the investment bandwagon.
Rise of establishments (1958-1967)
During this period people were introduced to names like Vergara Food Products (dealer of retail monosodium glutamate or vetsin, which also excelled in repacking sundry products for distribution to rural areas), NAMARCO (National Marketing Corporation), NARIC (National Rice and Corn Administration, the forerunner of National Grains Authority), and Luc Tian Restaurant (an iconic Chinese resto at Santa Ana street).
Mall-type establishments also sprouted, which gave Davao residents stores like Me Hang Supermart (where Avon is at C. M. Recto Street), the four-story Magno’s Department Store Usa Department Store (with its iconic deer logo), Mahunit Department Store, Lima Department Store, Lila Department Store, Davao Superette, Gift Mart, Three Sisters, Tung Chong Grocery, and Farmacia Pascual, to name just a few.
Gobbled in the 1964 conflagration that reduced blocks of San Pedro street and Magallanes street into ashes, the largest fire in local history, included movie theaters Lyric, Universal and Gems, Liberty Barber Shop, Vera Cruz Hotel, Brokenshire Hospital (where new Grand Men Seng Hotel now stands), and Loleng’s Refreshment Parlor.
More significantly, the decade also saw the development of San Pedro, Claveria (now C.M. Recto), and Oyanguren (now Magsaysay) streets as an expanded central business district, including sections of Monteverde and Tomas Claudio (Quirino) streets. Adding positive impressions to the city’s growing economy were the rise of numerous hotels and new sectarian institutions managed by religious congregations.
The decade will be remembered as the time when interest in banana appreciated following the collapse of abaca hemp in the world market after the invention of plastic-based cords. Investors scoured Compostela Valley to engage private landowners to enter into long-term contract with them, triggering a rise in the cultivation of once-abandoned lands into banana plantations.
As population grew and the economy started to show positive indicators, public works and infrastructures provided an added boost to the city’s growing trade and commerce. Some of the local politicians, using their connections and clout, were also instrumental in bringing to the city a bigger share of the national budget.
The first long-haul planes did not arrive in Davao City until May 6, 1966. Philippine Airlines introduced in Davao its twin-engine BAC 111, which were also used for inter-regional flights. This was the go-signal the city was now going international.
Plantations and military rule (1968-1977)
The rise of banana plantations in Davao region also became the backbone of insurgency in some places. Although the activists focused their ideology more on socio-economic issues that dated back to the early post-war years, especially agrarian reform concerns, the abuses committed during the Marcos regime became the wick that drove anti-government sentiments in the countryside. With the involvement of student leaders from state universities, the struggle to bring down the government became emotional.
The consequence of insurgency in Davao City was devastating. Business, some of them victims of rebel extortions, transferred location, and entrepreneurs who feared for their lives resettled elsewhere. Even the usually vibrant and resilient nightclubs, had their share of deflation which, in some cases, translated into prostitution for the displaced women. Job placements were sparse, and the entry of new investors was deterred by the unsettling peace and order.
Still, Davao City’s economy survived as it remained the central warehouse for commodities needed by people coming from the provinces, especially canteens feeding the basic commodities of the laborers. Even the rebels used the city as center of procurement on top of being transformed into a hotbed of insurgency. The rise of retail stores was observable given its role in a consumerist’s society but it was only this sector that thrived mostly because they were spared from the ‘revolutionary taxes’ imposed on flourishing industrial firms.
Of course, the establishments which made Davao City their permanent hosts continued with their usual activities. Within the city proper, their stability against threats was secured by the presence of law enforcement agencies. After all, the rise of insurgency affected mostly areas known for their informal settlers and in predominantly. Things, especially in business and investment, were not steady.
Alsa Masa and gold rush (1978-1987)
With the fall of despotism, there were significant political events that eventually resulted in the rise of popular advocacies against the Marcos administration. Aside from convening of the regular Batasang Pambansa in 1978, the government lifted martial law in 1981, and called for a snap election in November 1985.
But there were three other important developments that impacted the social, economic, and political fortunes of the city. With the rise of Alsa Masa, an anti-communist movement, public trust on the government appreciated. Known safe houses of rebel communists were raided, and insurgent leaders involved in summary executions ended their careers fatally. In nearly every village within the city proper the rise of Alsa Masa communes became palpable.
The opening of the Diwalwal gold rush in 1983 provided a spectacular window of opportunity for Davao City and the entire region. Though the discovery had only direct impact on host communities, the influx of migrants in mining areas provoked a stronger socio-economic influence. As an outcome, the city became the indisputable source of supplies, basic commodities, equipment, and a host of other exigencies that fueled the vibrancy of mining communities.
The mining at Diwalwal also roused interest by discovering new potential gold rushes. As a result, more gold mines, developed mostly by small-scale miners, sprouted in many towns of Compostela Valley Province. This positive development, interestingly, provided the Bangko Sentral the idea to open a branch in Davao City for its gold-mining and banking initiatives. And with the rise of new lending institution outside banking, its arrival was well timed.
An incisive look into the city’s eight-decade saga
The collapse of the Marcos regime in 1986 opened the floodgates to democratic changes. High-profile Davao personalities who fought the dictatorship found themselves trashed to the limelight, appointed to national offices, providing an affirmative note to the political direction of the city. As a consequence, insurgency retreated to the mountains, giving the city a breathing room to regain what it lost in terms of peace and order.
The fall of the dictatorship also resulted in other positive results. New investments were coming in, and residents who secured shelter elsewhere when insurgency was at the height threatening even in the urban center, had started coming back. Academic population and retail business were registering good results, and business enthusiasm was visible in the expansion introduced by local establishments. Even transport traffic was slowly gaining with the rise of car acquisition.
In general, there was a dramatic improvement in way people see the city after the so-called People Power revolt. At night, there was the rise in the number of drinking pubs as there was growth in the opening of new accommodations. With optimism going up, new banks and other lending institutions made their presence felt. This was influenced in part by the gold rush affecting many towns north of the city and the strong demand for jewelry, appliances, and cars.
Going international (1988-1997)
1988 is an important year in the city’s history. Rodrigo Duterte, a former city prosecutor, was elected mayor. His elevation to the mayoralty would rewrite Davao’s socio-political direction, and with it the attendant economic uplift borne by the impressive peace and order the city leadership had strongly pursued. As the crime index nosedived, the investments registered positively on the graphs.
Davao City, in 1994, got its biggest boost when it became a central player of a geopolitical, borderless trading alliance, the BIMP-EAGA, which opened Mindanao to the world and made it the gateway to Southeast Asia. BIMP-EAGA stands for Brunei Darussalam Indonesia Malaysia and the Philippines East ASEAN (Association of Southeast Asian Nations) Growth Area.
The economic triangle, first proposed in December 1989, links three regions with coherent aspiration to promote a trade arrangement. The idea is to establish economic linkages and create an agenda of coordinated public and private development efforts that would combine industrial expertise, technology, infrastructure and services
It was President Fidel V. Ramos who proposed the idea to create an East ASEAN Growth Triangle to Brunei Sultan Hassanal Bolkiah during an official visit in January 1993. The concept proposed that the provinces in East Indonesia (east and south Kalimantan, entire Sulawesi, Manado City and Maluku), East Malaysia (states of Sabah and Sarawak), and southern Philippines (the island of Mindanao and the province of Palawan) would comprise the new economic deal.
A month later, Davao City launched “Invest in Davao” in partnership with the financial backing of the Philippine Exporters Confederation of Region XI and the United States Agency for International Development (USAID). To add muscle to the initiative, City Ordinance No. 2269, the “Davao City Investment Incentive Code,” was approved in 1994. That same year, the city hosted its first-ever international business gathering, the East ASEAN Business Conference and Exhibits (EABCE), at the Bangko Sentral building, with over 1,000 visitors in attendance.
Two and a half years thereafter, through Executive Order No. 36, “Invest in Davao” became an investment promotion unit of the city, and in August 1999, it was renamed Investment Incentive Board. In September 2010, its jurisdiction was transferred to the city mayor.
As an offshoot, the Davao Integrated Development Program was conceived in 1994 to enhance the EAGA concept. Its formal creation, though, did not happen until January 26, 1995 when a Manifesto for Unity and Development was signed by local chief executives from Davao City and the provinces of Davao del Norte, Davao del Sur and Davao Oriental.
The first visible signs of BIMP-EAGA in Davao was the US$50-million resort investment of Samal Casino, the country’s first integrated resort development and the first blue-chip EAGA project to come out of the region. The idea was hatched in early 1993 during President Ramos’ state visit to Malaysia. As a complimentary gesture, on December 11, 1995, Malaysia became the second member of ASEAN to open a chancery in Davao City.
Going sky high (1998-2007)
Two significant events welcomed the decade. First, five-star Marco Polo Hotel inaugurated its 18-story structure in 1998, a year after the financial crisis hit Southeast Asia, making it the first skyscraper in Davao. That same year, Cebu Pacific Air, the country’s second flag carrier, made its maiden flight to Davao, which was later expanded in May 2005 with the introduction of an Airbus A320 to cater to the expanding Davao market.
The building of the tallest edifice in Mindanao created excitement and positive reviews. This was the key that led to rise of new sky-hogging achievements that were unheard of, especially from a foreign investor. Later, locally funded hotels and mixed-used structures followed suit.
As an offshoot of BIMP-EAGA, new players joined the positive economic landscape enveloping the city. Air Philippines, a subsidiary of PAL, and Asian Spirit (renamed Zest Airways, Inc.) took to the skies as budget players, followed by SeaAir and later by Mid-Sea Express.
In July 2002, Darwin, Australia-based Air Frontier announced its plan to launch passenger and cargo flights between Davao City and Darwin. On November 29, 2006, Jakarta-based Sriwijaya Air used Boeing 737-200 in opening its Davao-Manado route, then served by Merpati Airlines. Royal Brunei Airlines and Eva Air of Taiwan also made exploratory flights to Davao, but never opened regular routes. Singapore Airlines, through its Silk Air, and Malaysian Airlines also made weekly flights to and from Davao, but the returns were below expectation.
On November 17, 2001, the city got first huge mall. SM City Davao, built on 13.2 hectares of land situated at Matina area, was inaugurated.
Dizzying investments (2008-2017)
With the seed of investment safely ensconced, BIMP-EAGA earned for the city the sobriquet “the gateway to Southeast Asia.” With international accolades coming in from global publications, ratings houses, economic observers, and tourists, Davao became “one of Asia’s most livable cities,” in large part due to its impressive peace and order condition.
Homegrown New City Commercial Corp. was among the pioneers to test the waters by building its first supermall at Matina. Although the Cebu-based Gaisano firms had been in the city since the 1970’s, their contributions during this time diversified into real estate and hotel. Another Cebu outfit, Felcris, opened the first chain of convenience stores, followed by HB1 (Health and Body in 1), an NCCC subsidiary. SM (Shoemart) and Robinson’s, with no prior investments, eventually joined the economic euphoria. Later, modern billeting edifices such as Royal Mandaya, Seda, Ritz Hotel, El Bajada, Pinnacle, Tune, Felcris Centrale, and Grand Men Seng, to name a few, would forever change the landscape and skyline of burgeoning city.
But these inroads were only part of the surge of bigger investments that would flood the region. On May 12, 2011, Ayala Corp. and Davao-based Anflo Management and Investment Corp. inaugurated Abreeza Ayala Mall, a P5-billion three-story ultra-modern shopping mall sprawled on a four-hectare area within a 10-hectare commercial complex along Bajada district. In the complex, the Gokongwei-owned Robinsons Mall, costing P800 million to construct, sits on a separate four-story commercial edifice.
That same year, SM Investments Corp. announced the construction of a new 204-room hotel in Lanang, a new business district south of the city. The project, Park Inn by Radisson Hotel, a first in the Asia-Pacific region, operated by SM Hotels and Conventions Corporation; it was built within the mixed-use complex, beside SM Premier, the second SM mall in Davao, and the SMX convention center. The mall opened on September 27, 2012.
Even Sta. Lucia Realty, one of the premier and prestigious developers in the country, was not one to be left behind. Over a short period, it built middle-class and high-end subdivisions, among them the Davao Riverfront, South Pacific Golf and Leisure, Las Palmas Verdes, Valle Verde, South Grove Davao, and Ponte Verde.
The rush to join the investment mania in Davao City further escalated. On May 30, 2013, the 34-story Aeon Towers, a P3.1 billion mixed-use facility owned by FTC Group of Companies, broke grounds at Bajada. The following month, the Philippine Economic Zone Authority granted accreditation to Matina IT Park, costing P100 million for use in call center operations. It is the sixth PEZA-recognized outfit in the city after Lanang Business Park, Felcris IT Park, Pink Walters IT Building, Ambiente Teleservices, and HAI Global Services.
To address the growing demand for power supply, the Aboitiz conglomerate, a leader in energy development, jumped in to fill the vacuum. From plant-based generation, it diversified to hydroelectric projects. In 2014, it announced that Therma South Inc., a subsidiary of Aboitiz Power Corp., was building a P24-billion coal-fired power facility in Davao.
On the other hand, Vista Land & Lifescapes, Inc., an investment company, unveiled a P40-billion investment in Davao which included a low-cost housing initiatives and a Star Mall shopping complex in its 50-hectare Cerritos project in Mintal district. Not wanting to be left behind in the investment race, Megaworld, a pioneering builder of urban towns and the country’s largest office developer, announced in 2014 the building of its P15-billion Davao Park District in partnership with the Dakudao family. The undertaking, its tenth township, is now rising on an 11-hectare property at Dakudao Loop, erstwhile known as Lanang Golf and Country Club.
Torre Lorenzo Development Corp. was also bullish with the Davao’s property scene as it unveiled its multi-billion peso investment plan to invest P4 billion for three high-end projects in partnership with Thai hotel chain Dusit International, by developing the provincial Dusit Thani Residences, dusitD2 Hotel and Lubi Plantation Resort as luxury accommodations.
More airlines were also coming. Aside from the revived Bouraq Indonesia Airlines, which was already serving the Davao-Manado route, on June 7, 2012 Wings Air, a subsidiary of Lion Air, a Jakarta-based airline made its maiden flight to Davao from Manado. The following year, MASwings, a regional airline firm, made it s maiden flight to Davao via Kota Kinabalu.
Tiger Airways, a Singapore Airlines subsidiary, made an attempt to compete with the domestic low-budget players but its Philippine operation was eventually sold to Cebu Pacific. In 2012, the Filipino-Malaysian consortium Air Asia Philippines joined the expanding domestic airline industry from its base at Clark in Pampanga.
With this development came the throng of banking institutions establishing branches in the city, among them old players and newcomers that include Maybank, EastWest Bank, and Asian United Bank. This was made more evident when its former mayor, Rodrigo Duterte, became the country’s 16th president in the 2016 national elections.
In the field of foreign affairs, other friendly countries also opened their diplomatic missions, managed by honorary consuls from Davao, among them the Czech Republic, Republic of Palau, Spain, Mexico, Denmark, Kazakhstan, and the Republic of Serbia.
Today, Davao City is the heart of business process outsourcing (BPO) in Mindanao, next to Metro Manila and Cebu City.