SM, Robinsons and Puregold are coming in Bohol

It’s been many decades since Bohol closed its doors for big investors. There have been speculations about the actual reasons, like local malls lobbying. Whatever the case, it’s time to move on to the new era of a vibrant province. The team representing SM, headed by its senior vice president Bien Mateo, declared its move to invest when met Governor Aris Aumentado a few days ago.

This shows how Boholanos’ longing finally finds fulfillment. A year from now, SM will build its mall near Camp Bernido at Dao, Tagbilaran City and we can see it serving clients in four to five years. “We are thrilled. The Governor reported we are welcome here in Bohol and we feel the province is investor friendly,” VP Mateo remarked. According to Governor Aris, SM is 100 percent committed to come in. He said this means additional taxes. It becomes a magnet to other businesses.

We reap a rich reward from this update.

SM builds not only malls. The company is also into tourism, hotels, convention centers and housing. If they put up the mall, it can expand areas to plow money into.

How About Puregold and Robinsons?

After the SM deal come to the fore, the news made the Robinsons uneasy. It also wants to set foot in the province. Puregold also expressed interest in plowing money here. It plans to locate in Ubay, Talibon, Tubigon, Jagna, Carmen, Loay, Panglao, Tagbilaran City and Dauis. This rate of development to magnetize businesses is unprecedented. It never happened before.

Impact of opening to big businesses

In terms of economic impact, shopping malls create a major contribution to the country, according to Dr. Priscilla Tacujan in The Journal of Political Risk. Malls are among the top employers in the country. In 2015, the 60 malls of SM already employed 370,000 people, while the 44 Robinson malls employed 100,000. Malls contribute 15% of our GNP and account for 33% of the entire services sector, based on the data from the Philippine Retailers Association. They employ 18% of the country’s labor force.

Malls balance the rural and urban divide of provinces. They narrow income gaps, increase the purchasing power of the poor, decrease inefficiencies, and give incentives to educating the workforce (according to Dr. Priscilla Tacujan). No wonder malls measure economic growth.

We always depend on the ability of investors to make a vibrant economy. But most Boholanos lack the expertise and resources to put up a big business—much more, build malls. Even if some well-heeled Boholanos have the resources, they cannot pursue a large-scale business concept because it is not their specialty.

Welcoming big investors does not mean a lack of patriotism. We are just practicing Economics 101. With SM, Puregold and Robinsons, talents and resources in the province are used more productively. The result: we multiply our leverage and experience economic boom. SM alone can provide 2,500 to 3,000 jobs when it will operate. With jobs, many will no longer need to go to big cities. They can make a living in the province.

We are not only opening new positions. We also raise the value of real estate in nearby locations where these businesses operate. The market value of lots in these areas can increase two times or more. The transportation sector will also find a fresh lease of life. Many public utility vehicles will find alternative routes and we will need more businessmen who sink money into transportation and related enterprises such as hardwares and car wash. New employees will need more boarding houses.

We should be excited about our dramatic turnaround towards becoming an open economy. The Governor made the right move welcoming these investors.

We Need an Open Economy

I borrow the term open economy from international trade concepts. An open economy maintains financial and business ties with other countries through exports and imports. While a closed economy does not; it only relies on local production to supply its citizens’ needs. Is there such a thing as a closed economy these days? In some ways, Boholanos trekked this rugged road.

The problem with closed economies is they don’t have the factors of production to produce services or products efficiently. Therefore, they cannot come up with competitive products in terms of cost and quality. The coming of SM, Puregold and Robinsons, is like the concept of importing. We allow investors from other cities to come because they can serve our needs better than Boholanos trying to catch up with the retailing competition.

Former NEDA secretary Ernesto “Boy” Pernia once mentioned that Bohol should be an open economy. If we open, prices go down. The people will also enjoy options of more products. But if we remain closed, we will never have a booming business climate. Who wants to live in the Jurassic age in the internet age? We cannot afford to slack because of behavioral roadblocks.

Some Points of Negotiation

The entry of malls needs parameters set by our leaders. This is still the milieu for Boholanos. To protect the interest of the people, the Governor asked the negotiating team to avoid pirating employees from local malls. Provincial Planning and Development head Atty. John Vistal also suggested making the design of the future SM to be inclusive, reflecting more the Boholano character. We cannot set aside these negotiations because Boholanos need to maintain their rights in their own milieu.

Looking Forward

The coming of big businesses in our province is an exponential multiplier of the economy. The Governor has gained more credibility by drawing big businesses in. He gains momentum if he listens to economists rather than heed to voices leading backwards. There are environmental concerns with the coming of malls, just like the case in Cebu City. But the province can manage these through the DENR and the Governor’s oversight. The benefits of big businesses in the province still outweigh possible environmental violations.

Having a mixed economy that relies on nature’s bounty and controlled capitalism, Bohol is going in the right direction, welcoming capitalists from other cities. We should never lag again. May the Governor continue his Yeoman service in our economy as he shows his vigour, vim and verve of vitality.