Why business shuns the south

By Fernando Fajardo
Cebu Daily News
Last updated 05:37pm (Mla time) 07/18/2007

City Hall wants business to go south instead of the Banilad-Talamban area in the north. They will, but only if the conditions in the south are right. In business everything is about location. Put your business in a wrong place and it will not be long until you will fold up.


What is wrong in the south? Part of the answer is that what is good in the north cannot be easily found in the south.


First is the ready availability of wide tracts of open land which made it easier to undertake major development projects intended for housing, commercial, institutional, and other related land uses. Do not forget that Banilad area was once part of the friar lands that was disposed in big chunks to the city’s rich and influential or to the government during the American Occupation.


The south, with San Nicolas as the center, was the home of the poor natives who were encouraged to congregate there by the conquistadores, while they and the local elites that mostly consisted of the well-placed Filipinos, Chinese, and mestizos live near and around Fort San Pedro and nearby churches. These days, if they numerous people in the south do not own the small lots upon which they build their homes, chances are that they are renting or squatting on few rich people’s land.


The first big project in Talamban was the construction of the University of San Carlos Technological Center. Before its completion in the late 1960s or early 1970s, few would have known what Talamban was like, or even heard of it. I myself first went to Talamban only when, as a young recruit of the USC Economics Department, I was sent there to handle engineering economics. Then, the road to Talamban was very narrow and dusty. My going there was made bearable only with free ride on the school bus.


The opening of the Technological Center attracted many people to invest in real estate in Banilad and Talamban. Soon, many housing subdivisions were opened, along with the establishment of many business establishments that cater to the needs of the growing number of people living in or passing through the area.


The next surge came with the construction of new buildings in that stretch of land where many national government offices are now found close to each other, like the NMYC-TESDA, which Capitol also wants to eject.


The final push came with the sale of the province-owned lot that was once a golf course of the Ayala executives. In it now is found the biggest commercial center in Cebu.


It goes without saying that these new developments made the land in Banilad-Talamban very expensive, making them affordable only to the rich. Thus was prevented the coming of the hoi polloi, and the rise of unorganized housing or slum areas that characterized many parts of the south.


The only place that resembles a slum colony in the area is Barangay Luz – actually an organized slum colony of sorts, as it was planned and prepared for the displaced poor from the city. There was no overnight invasion of the homeless there. I supposed it was opened during the tenure of President Ramon Magsaysay, from whose first lady the barangay got its name.


With the rich and influential residing or holding business in Banilad and Talamban, it was not long when its once narrow and dusty road was widened and paved. This made making new homes or putting up new businesses in the area doubly attractive.


The south was also widened, but it was done not in response to local needs but to accommodate the increasing number of busses, trucks, cars, and jeepneys that enter the city from the south and west of the province. If ever, the road-widening and growing number of vehicles passing the south road only discouraged the moneyed class from residing or putting up new business there.


What prod businessmen to locate in an area? The availability of land is one, but in general it depends on the nature of business. If it uses raw materials that are expensive to move and do not contribute much to the weight or bulk of the final product, it is better located where the inputs are found. If they sell products or services whose supplies or inputs are found in, or can be cheaply transported to, the market area, they are better located close to the targeted market.


Many firms also congregate in an area where they get some benefits from their joint presence such as attracting a bigger number of customers who are enticed with their varied offering of products and services.


The type of business establishments that now proliferates in Banilad and Talamban mainly provide services or products directed at the local rich or highly-paid young professionals working there and nearby. These people are not found in concentrated number in the south. That explains why, no matter what City Hall says, business is slow to develop in the south.


What areas in the south could have been the equivalent to Banilad and Talamban in the north when developed? Guadalupe-Banawa and Labangon-Tisa could qualify. However, while Banawa-Guadalupe shows good potentials for new business with the road widening under the MCDP, the densely populated Labangon-Tisa does not have much room for new and bigger commercial projects to come.


Banawa-Guadalupe is fast developing but they also do not offer much open space for new development in the scale of what we see in Banilad and Talamban. Quiot beyond Labangon would have been ideal if its road were widened and had it not been invaded earlier by the hoi polloi, preempting the development of first-class housing projects or the coming of new business in the area.


What about the city’s old Central Business District. Why do new businessmen shun the area? What say you at City Hall?


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