Davao 4 Expats . com

This is Part Two of a series of articles on The Cost of Doing Business in Davao.

Hotel Rates

Many business owners in the city are residing outside of it in the nearby cities and towns. Most of them opt to stay at hotels and other accommodation facilities. Those who have higher accommodation budget can stay at deluxe hotels which have the following rates in Philippine Peso: 6,800 for superior rooms; 8,400 for deluxe rooms; 10,000 for cabana; and 16,800- 53,200 for suites. First class hotels are also best for non-resident business owners. These hotels have the finest facilities and most of them are within the city’s commercial districts. First class hotel rates are as follows; Standard, 3,340- 3, 720; Superior, costs 3,340- 4, 270; deluxe, 5,800; executive suite, 6,100-16,600; and presidential suite, 12,000-20,000. Standard hotel rates are; standard, 600- 2,000; deluxe, 1,099- 2,600; and suite, 1, 898- 4, 000. There are also inns which charge lower compared to others. Inns charge as follows: 405- 600 for standard rooms; 504- 849 for superior room; 849- 2, 200 pesos for deluxe rooms; and 1,200-3, 150 for suites.

Other accommodation centers include apartelles and pension houses. Apartelles charge 500 -1,800 pesos for standard rooms while they charge 700 – 2,160 pesos for double rooms. Pension houses on the other hand charge 500 – 750 pesos for standard rooms, 800 -1,200 for superior rooms and 1,360 – 1,700 for suites.

Power rates

The Davao Light and Power Company is the sole provider of electric power in the city. It charges according to the type of establishment that avails of its service. As of February 2006, residential establishments are charged 5.6460 pesos for every kilowatt hour. Commercial establishments, on the other hand, are charged depending on its size. Power charge for these kinds of establishments ranges from 5.4885- 5.5199 pesos per kilowatt-hour. A 5.0560 pesos per kilowatt-hour is charged on industrial establishments, while establishment which does not fall in any of the mentioned categories are charged 4.9628 pesos per kilowatt-hour.

Commercial Space Rental Rates

Finding an ideal location and space for your business would not be hard in Davao City. However, you should also anticipate bigger rents on spaces especially in areas around the city’s commercial district. Office spaces and small commercial buildings cost roughly from 180.00-332.00 per square meters. Spaces in shopping malls cost higher. It ranges from 500.00-1,500.00 pesos per square meters.

Real Estate Prices

For some businesses, owning a land on which to construct a building for use in conducting their business is a way to go. If you are considering this route, consider the following real estate data.

Residential lands are priced between P 800.00 – P 6,000.00 for every square meter. Commercial ones are roughly from 2, 500.00- 35,000.00 per sq. m.; industrial, 150.00-500.00 per sq. m.; and agricultural lands from 50.00-250.00 per sq. m.

This is according to the Davao Board of Realtors last updated in 2007. These days, it is not uncommon to find land prices sour up to 50% of their value in the span of three years. Soaring of land prices are to be expected especially today that the city’s development is in its fastest.

Transportation Costs

To those who don’t have their own business vehicles, going around the city for business purposes are not that costly. The most common means of transportation is through jeeps since it costs way lesser compared to taxi cabs. Jeep fares start at Php 7.00 up to as much as Php 30.00. Non-airconditioned taxi cabs’ flag down rate is 26.00 while airconditioned ones start metering at 30 pesos.

Car rental is another alternative. There are a lot of car rental services offered around the city. When renting a car, expect a rate of 650.00- 4,100 pesos for no more than 24 hours. Vans can be rented from 800.00-4, 600 pesos while coasters can be rented from 2, 500- 15,000 pesos.

Of course, starting up a business in the city requires initial capital and expenses. For one, there are compliance certificates and other requirements that needed to be accomplished to acquire legal rights on the business venture.

Nonetheless, despite the business expenses, almost any type of business can thrive in the city. All that is needed is wise management and smart handling of investments.

~~~

This article is written by Matt Regis.

Davao City is a growing metropolis that holds good promises for commercial establishments and business enterprises. At the turn of the millennium, thousands of businesses started to flourish in the city. The commercial advancement of the Davao region continues to soar high today as more and more infrastructures are being constructed for the convenience of the people and the business sector.

A business venture in the city of Davao is a wise investment. Compared to other places, the cost of doing business in Davao is considerably cheaper and very cost-effective. Other necessary expenditures such as public utilities and transportation means costs lesser as compared to other major cities in the Philippines.

The peaceful environment provides security for establishments as well as the businessmen who transact and do business here. Despite the negative image of the Southern Philippine Region as a whole, Davao City takes pride in being one of the most peaceful cities in the Philippines. To add up, it has the most commendable Police Force and the city itself is in fact one of the most livable cities in Asia.

Government agencies regulating and assisting commercial and industrial concerns in the city and business organizations are collaborating to maintain the ideal business atmosphere of the city. City Laws and Ordinances are also provided to assist businessmen within the region in their different concerns and issues.

The sub-urban mode of the metropolis and the fast-paced advancement of modern living give good grounds for healthy business market and dynamics. Though competitions are stiff among business of the same kind, the growing population continues to provide enough market demand for products to be purchased and consumed. The competition also results to high-quality products and services that are delivered to the people.

The Davao Work Force

Another thing that makes business venture favorable in the city is its work force. Davao City is a pool of talented men and women—both in the fields of professional and manual labor.

Colleges and universities in the city boast of quality education and their highly-skilled graduates. Those in skilled-jobs and manual labor were also proven effective and their population continues to rise as more training centers and schools are being erected. In fact, the city is cited as the one of the next BPO industry hubs in the country and has generated thousands of jobs from the locals for many years now.

For people, especially foreigners and expats who are planning to have a business venture here in the city of Davao, here are some information that you might find useful.

(This is the first part of a two-part series of articles on the Cost of Doing Business in Davao.)

Minimum Wage and Cost of Living Allowance (COLA)

Davao City’s minimum wage with Cost of Living Allowance (COLA) rate for non agricultural businesses ranges from Php 248.00 to Php 250.00. For agricultural businesses: plantations no more than 24 hectares wide with a maximum of 20 workers pays from Php 238- Php 240.00, while non-plantation agricultural businesses pay ranges from Php 219- Php 217.00. Those who are employed in the retail/service business (with an employment population of more than 10 employees) receives a daily pay of Php 248.00- Php 250.00 Those who are employed in the same industry whose enterprise employs less than 10 people receives Php 217- 219.00.

Watch out for the Part 2 of this series. In the next part, we’ll discuss Power Rates, Hotel Rate, Commercial Spaces Rental, Transport Cost and others.

~~~

This article on The Cost Of Doing Business in Davao is written by Matt Regis.