Davao City emerged as one of the Philippines’ top economic hubs in 2023, placing fifth among the nation’s highly urbanized cities. Data from the Philippine Statistics Authority (PSA) showed the city generated ₱532.54 billion, accounting for 2.5% of the country’s overall GDP.
By 2024, Davao Region’s economy had climbed to ₱1.08 trillion, up by about ₱64 billion from the previous year. Services drove the bulk of activity, accounting for just over 61%, while industry made up a quarter of the output, and agriculture, forestry, and fishing contributed the remaining share.
The region’s population reached 5.39 million in mid-2024, with Davao City accounting for nearly 1.85 million residents. Beyond its size, the city has also emerged as a leading tourism hub.
In 2024, Davao welcomed around 4.1 million visitors, generating approximately ₱34.7 billion in revenue. Landmark cultural events like Kadayawan, Duaw Davao, and Pasko Fiesta, alongside a strategic push for MICE (Meetings, Incentives, Conferences, and Exhibitions) tourism, helped fuel the surge in visitor numbers.
Eco-tourism, particularly in the Marilog and Paquibato districts, now accounts for nearly 20% of total visits, with new nature-based destinations set to open by September 2025.
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Achieving stable power
Driven by its rapid growth, Davao is now moving to strengthen its power stability.
The Mindanao-Visayas Interconnection Project (MVIP) was set for completion in December 2020 but was delayed by nearly three years due to COVID-19 disruptions, rights-of-way disputes, and submarine cable damage.
In 2023, the National Grid Corporation of the Philippines (NGCP) finally energized the ₱52-billion MVIP. NGCP noted that the project, comprising a 184-circuit-kilometer High-Voltage Direct Current (HVDC) submarine transmission line connecting Mindanao and Visayas, will significantly bolster power stability and reliability.
Additionally, Mindanao’s Wholesale Electricity Spot Market (WESM) officially went live in early 2023, marking a major shift in the island’s power sector. President Ferdinand Marcos Jr. led the ceremonial launch in Malacañang, highlighting its potential to boost investments and industry growth. Former Department of Energy (DOE) Secretary Raphael Lotilla said the spot market “translates into more reasonable prices, especially for Mindanao right now.”
Recent data shows a dramatic decline in electricity prices on the WESM in early 2025. January saw Mindanao’s average rate tumble almost 32% to ₱2.65 per kilowatt-hour (kWh), while the national average reached its lowest level in two years. By mid-2025, system-wide WESM prices were down 26% from the previous year to an average ₱4.14/kWh, the lowest price level recorded since 2020.
A major policy shift is also set to reshape Davao’s power landscape after House Bill 11072 quietly lapsed into law on April 6, 2025. The measure expands Davao Light and Power Co.’s franchise area beyond its current coverage of Davao City and parts of southern Davao del Norte to include Tagum City, the Island Garden City of Samal, several other municipalities in Davao del Norte, and the entire province of Davao de Oro. These areas are presently served by the North Davao Electric Cooperative (Nordeco).
Samal Island, famed for its beaches, has paid a heavy price for persistent power troubles. Since 2021, recurring outages and unreliable electricity service provided by Nordeco have led to economic losses ranging from ₱120 million to ₱150 million annually, with tourism alone losing about ₱50 million.
Consumer advocates have long criticized Nordeco for unstable supply, high rates, and inefficiencies that have hampered economic activity. In hearings at both chambers of Congress, Davao Light was shown to charge between ₱3 and ₱5 less per kWh compared to Nordeco. Data presented at the Senate also showed Nordeco customers enduring average outages of four hours per month, compared with just 17 minutes for Davao Light users.
With Davao Light’s expanded mandate, residents and businesses in the affected areas stand to gain from more reliable service, lower rates, and a power supply better aligned with the region’s growing economic ambitions.
(Also read: Integrating Renewable Energy Challenges & Opportunities)
Powering Davao’s growth
Davao’s growth is anchored on a dynamic mix of agriculture, real estate, construction, trade, and services.
For instance, Davao’s more than 20,000 hectares of farmland position it as an attractive hub for agribusiness. The steady supply of crops, easy access to raw materials, and competitive labor costs create strong opportunities for food production and agri-industrial ventures.
Moreover, Davao’s business process outsourcing (BPO) sector has become a powerful economic engine, employing more than 75,000 people and ranking just behind Metro Manila, Cebu, and Clark in industry revenues. “The BPO industry contributes substantially to Davao’s GDP,” said Christian Cambaya, unit head of the Davao City Investment Promotion Center (DCIPC). He added that its growth has redefined the city, from new office towers and stronger public services to rising purchasing power and lifestyle improvements.
Davao’s manufacturing sector is also thriving. In 2023 alone, it reached a record output of ₱116 billion, demonstrating steady growth. The surge of significant light manufacturing investments such as Monde Nissin’s ₱2.3 billion expansion, along with major steel exports to Canada, further reinforces the region’s industrial appeal.
A stable power supply is seen as crucial to sustaining this momentum. Manufacturing plants require reliable electricity to operate efficiently, BPO firms need uninterrupted connectivity to remain globally competitive, and the tourism sector relies on dependable energy to maintain high-quality services. Even agriculture, with its increasing shift toward value-adding and processing, depends on consistent power to run facilities and cold storage.
With reliable energy, Davao can maximize its comparative advantages, attract more investors, and accelerate its role as an economic hub in the south.
Sources:
https://www.pna.gov.ph/articles/1253393
https://rsso11.psa.gov.ph/content/davao-regions-economy-posts-63-percent-growth-2024
https://www.sunstar.com.ph/davao/davao-population-reaches-538m-in-2024-psa-reports
https://www.pna.gov.ph/articles/1246850
https://www.iemop.ph/news/wesm-price-hits-two-year-low-in-january-2025
https://dailyguardian.com.ph/wesm-power-prices-drop-26-in-first-half-of-2025
https://www.sunstar.com.ph/davao/davao-light-franchise-expansion-becomes-law
https://www.facebook.com/photo?fbid=1015272793974166&set=a.446974487470669&_rdc=1&_rdr#
https://www.facebook.com/photo?fbid=1012838544217591&set=a.446974487470669&_rdc=1&_rdr#
https://www.bworldonline.com/the-nation/2024/06/30/605138/samal-lgu-incurs-losses-of-p150m-annually-due-to-power-issues
https://invest.davaocity.gov.ph/articles-blogs/article-3
https://www.reddit.com/r/Philippines/comments/1igbv1p/ph_supplies_p32b_steel_for_canada_subway_project
