In recent years, both Iloilo City and Iloilo Province have been major contributors to the economy of Western Visayas and the Philippines. The Western Visayas region, of which Iloilo is a significant part, achieved a commendable growth rate of 6.1 percent, placing it at the 12th position among the 17 regions in the country. Notably, Iloilo ranks as the 5th largest economy outside of the National Capital Region, a testament to its robust economic activity and potential for development.
Driving Iloilo’s economic engine is a diverse array of sectors, with Agriculture, Hunting, Forestry, and Fishery (AHFF) playing a pivotal role. In 2018, AHFF contributed 17.2 percent to the region’s output, underscoring the significance of agricultural activities in the local economy. The Industry sector accounted for 24.7 percent, while Services constituted the lion’s share at 58.1 percent, reflecting the province’s growing service-oriented industries and commercial activities.
Iloilo province is home to many industries and an established agriculture sector, according to the National Economic Development Authority Region VI regional office. A leading rice producer, the province is also known as the “food basket and rice granary of Western Visayas.”
Its capital, Iloilo City, is being developed as a hub for trade, commerce, and industry in the
Western Visayas region and is considered one of the “next wave” cities in the Philippines. It has gained from the increased BPO industry activities in the country. Other major industries include telecommunications, utilities, banking & finance, and Business Process Outsourcing.
Iloilo City’s economy is experiencing rapid growth, with a notable increase from 6.8% in 2021 to 9.6% in 2022, underscoring its status as one of the strongest economic centers in the Philippines.
The city’s gross domestic product (GDP) per capita of 306,444 in 2022, reflects its high standard of living and robust economic productivity. Iloilo City also ranks fourth in terms of GDP per capita, highlighting its significance as a major driver of economic activity within the country.
The services sector plays a pivotal role in the city’s economy, accounting for a substantial 87% share of its GDP. Within this sector, wholesale and retail trade, financial and insurance activities (11.5%), and education (7.6%) emerge as the top contributors. Despite the dominance of services, industry and agriculture sectors also make contributions, with industry accounting for 10.3% and agriculture, forestry, and fishing (AFF) contributing 2.7% to the city’s GDP.
This diverse economic landscape underscores Iloilo City’s resilience and dynamism as it continues to thrive and evolve as a key economic powerhouse in the Philippines.
Tourist arrivals continue on its upward trend
The fast-growing tourism sector is also one of the main industries for Iloilo City and Iloilo Province. Tourist arrivals in Iloilo have recorded a 12 percent compound annual growth rate (CAGR) in the past 10 years, with domestic tourists, increasing at a CAGR of 13 percent in the past decade as shown in the figure below, according to the Department of Tourism (DOT)and local tourism offices.
The Iloilo International Airport is the country’s 5th busiest airport with passenger traffic reaching 1.7 million in 2022.
Some of the major tourist attractions in Iloilo include its` heritage spots and old-world
architecture such as Iloilo Bucari, Gigantes Island, Janiuay Cemetery, Imoy Falls, Miag-ao Church, Montinola-Sanson Antillan House, Mt. Baloy, Nadsadjan Falls, Pan de Azucar, San Dionisio, San Joaquin Church, Sicogon Island, and Sta. Barbara Golf Course.
Iloilo province has several tourist attractions with each of the five districts focusing on specific themes such as Heritage Destination in the 1st District, Eco-Cultural Destination in the 2nd District, Eco-Agricultural Destination in the 3rd District, Historical, Adventure, and Sports Destination in the 4th District, and Resort Destination for the 5th District.
Tourism is also a major contributor to the economy of Iloilo City, which offers year-round events. These include the Iloilo Dinagyang /Kasadyahan Festival every fourth Sunday/Saturday of January, to draw pilgrims to Iloilo City every year. The Iloilo Paraw Regatta Festival, held every second week of February, is claimed as the oldest traditional sailing event in Asia. Bike tourism was also introduced with the Iloilo bike festival and with the network of protected bike routes, the Iloilo bike lane.
Aside from these events, the city hosts numerous meetings, incentives, conferences, and exhibitions (MICE) events throughout the year. These events boost the city’s economy due to increased spending of local and foreign tourists on accommodation, transport, and other tourism activities.
Total tourism spending in the city reached P6.7 billion, with an average spending of P8,967.27. Having been named the first-ever UNESCO Creative City of Gastronomy in the Philippines is another key factor that boosts the city’s growing tourism economy. This distinction aims to feature and preserve the local food industry of Iloilo City as part of its heritage and cultural identity.
The city also has implemented several projects to develop more tourist attractions, such as the Iloilo River Esplanade. This iconic structure stretches over nine kilometers of walkable space along the Iloilo River. A venue for wellness, recreation, and artistic pursuits, it has attracted tourists who want to experience the integration of green spaces in an urban environment.
The city is also implementing the rehabilitation of public plazas and parks for green open spaces, such as the Beach Forest Park on Molo Boulevard, Tree Park at Lanit, Jaro, and Hinactacan Eco-park in LaPaz. These initiatives focus on revitalizing public spaces, and promoting recreation, leisure, and community engagement while enhancing aesthetics and environmental sustainability.
These efforts have resulted in major gains in the city’s tourism sector. In 2022, tourist arrivals in Iloilo City increased substantially by 369.11 percent year-on-year.
Iloilo also taps the rich arts and culture sector to boost tourism. There are around 25 art venues in Iloilo City. These include three art galleries, four exhibit areas, and 18 museums as well as numerous murals in public areas. The Iloilo Arts Festival introduced in 2021 highlights Ilonggo’s creativity, history, and culture, and makes art in all forms accessible to people from all walks of life, through a series of events in public spaces.
INFRASTRUCTURE PROJECTS IN ILOILO, NEARBY PROVINCES
The national government is eyeing two flagship projects in Iloilo and nearby provinces. These are the proposed Iloilo-Capiz-Aklan Expressway (ICAEx) and the Panay Railway System.
The ICAEx is a 210-kilometer, six-to-eight-lane mostly elevated expressway composed of roadways viaducts, a tunnel, and a long-span bridge that will traverse 22 cities and municipalities along three Panay provinces. It will start at the municipality of Leganes, Iloilo, which is strategically located near the proposed Panay-Guimaras Bridge. The Department of Public Works and Highways will implement it.
The Panay Railway System project targets the reconstruction of the existing 113.83-kilometer railway line and integration with the newly identified 141-km railway line passing through the cities of Iloilo, Capiz, and Aklan. A 33.14-km railway line will also be added to connect the Iloilo International Seaport and Airport, and a diversion line from Dao, Sigma, and Sapian in Capiz for a total track length of 287.97 km.
The estimated project cost is P70.06 billion and will be funded under the General Appropriations Act. It is targeted for completion beyond 2028 and it is still under pre-project preparation.
Another major project is the Panay-Guimaras-Negros Island Bridges Project. The DPWH signed the contract agreement for the detailed engineering design (DED) of the project on December 20, 2023. DPWH Secretary Manuel M. Bonoan approved the Contract for Consultant Services of Yooshin Engineering Corporation in a joint venture with Kyong-Ho Engineering and Architects Co., Ltd., Dohwa Engineering Co., Ltd., Soosung Engineering Co., Ltd., and Dasan Consultants Co., Ltd for the DED and tender assistance.
DPWH considers this a crucial step forward in the realization of this key infrastructure flagship project in the Western Visayas Region and a monumental undertaking of the administration of President Ferdinand R. Marcos Jr. under the “Build Better, More” program. It aims to improve the lives of the people and simultaneously achieve economic stability in the areas in the Region.
The ₱2.671-billion contract was signed by DPWH Senior Undersecretary Emil K. Sadain and the joint venture engineering companies’ authorized representative Mr. Jeong Hwan Kim.
The cost of engineering services will be funded by a loan with the Export-Import Bank of Korea (KEXIM), the official export credit agency of South Korea from the Official Development Assistance (ODA) of Economic Development Cooperation Fund (EDCF) Loan Agreement No. PHL-23.
The DED is targeted to finish by 2025 and will be immediately followed with the civil works from 2025-2032 covering the construction of the 32.47 kilometers of two sea-crossing bridges and connecting roads that will link Metro Iloilo of Panay Island to Guimaras Island Province and Negros Island in Western Visayas.
Section A which comprises the Panay-Guimaras Islands with a total length of 13 kilometers has an estimated civil works cost of ₱57.702 Billion. Meanwhile, Section B covers the 19.47-kilometer Guimaras-Negros Islands bridge amounting to an indicative cost of ₱109.76 Billion.
Once completed, this project is anticipated to reduce the travel time from Panay Island to Negros Island from a 4-hour trip via ferries/RORO down to approximately one-hour land travel using the PGN Island Bridges.
UPCOMING MAJOR PROJECTS
There are also major projects being implemented or planned under Public-Private Partnership arrangements.
The Philippine Ports Authority (PPA) recently awarded the Container Terminal Services Inc. (ICTSI) a 25-year concession contract to develop and operate the Iloilo Commercial Port Complex (ICPC). The project aims to transform the port complex into a modern, efficient, and premier gateway for the region.
Located at the center of Iloilo City, the port serves the province of Iloilo and the entire Panay Island, in Western Visayas of the Philippines. The facility will be renamed the Visayas Container Terminal (VCT) after handover to ICTSI. The VCT has 627 meters of operational quay length and 20 hectares of land for container and general cargo storage, warehousing, and other cargo-handling activities. ICTSI will focus on improving terminal productivity and service quality by investing in the development and rehabilitation of the terminal infrastructure and the deployment of cargo-handling equipment.
The project aims to transform ICPC into a modern, efficient, and premier gateway for the region. This development unlocks Iloilo’s competitiveness in global trading through the modernization of port facilities and the offering of direct international trade routes.
Meanwhile, the Department of Transportation (DOTr) and the Civil Aviation Authority of the Philippines (CAAP) are looking for a private sector proponent for the operation and maintenance of the Iloilo International Airport Under a PPP arrangement. The Iloilo International Airport experienced a significant surge in passenger traffic in 2022, reaching a substantial volume of 3.4 million and a cargo movement of 4.2 million.
At least two companies have expressed interest in taking over the operation and maintenance of the airport that is located at Cabatuan, Iloilo.
The Prime Asset Ventures Inc. Consortium has submitted its P6.89-billion unsolicited proposal for the project. Under its proposal, the company aims to improve CAAP’s management and operational capability of the airport through the Operate-Add-Transfer (OAT) contractual agreement. The project includes the expansion of the capacity of the Passenger Terminal Building with the necessary facilities for passengers, construction of an apron adjacent to the new PTB extension, renovation and maintenance of the existing terminal building, installation of the required equipment for the passenger services in the new terminal building, and the operation and maintenance of the terminal buildings and equipment facilities during the entire concession period. The first to submit its proposal, Prime Asset Ventures has the original proponent status.
The Aboitiz InfraCapital, the infrastructure arm of the Aboitiz Group has also announced that it has submitted an unsolicited proposal for the Iloilo International Airport project. AIC reportedly submitted its unsolicited proposal to the DOTr last April 19, 2023 to upgrade, operate, and maintain the ILO for P9.95 billion under a concession period of 35 years. AIC can draw on its on-the-ground knowledge and learnings in the management of the world-class Mactan Cebu International Airport – which AIC started to be involved with last year as part of the Concessionaire – in improving the overall passenger and service experience of the airport.
Iloilo City is also looking at implementing a greener and more efficient mass transit system. Last January 30, 2024, the Iloilo City government entered into a Memorandum of Understanding (MOU) with Futran Philippines Inc. for the conduct of a feasibility study for a proposed suspended transport system. The city plans to implement the P16-billion project called “Green People Mover.”
The Lopez Group’s First Balfour also proposed to partner with the city’s plan for an Electric High-capacity Bus System. The company has submitted an unsolicited proposal on its plan to implement the project to the Public-Private Partnership Center (PPP). Under the unsolicited proposal, the project will be implemented as a joint venture agreement between the Iloilo City government and First Balfour. It consists of the financing, development, operation, and maintenance of an HCB System for the city involving three corridors using electric-powered buses.
VIBRANT ICT-BPM SECTOR
Based on the PSA’s official data on the share of major industries in Iloilo City, the service industry contributes a huge share to the city’s economy amounting to 87% of the total P145.05 billion GDP. This includes IT-BPM, accommodation and food service activities, construction, finance, and education.
Over 100 multinational IT-BPM companies are located in Iloilo City and Iloilo Province. These companies employ more than 40,000 full-time employees. The city government’s partnership with the Iloilo Federation for Information Technology (IFIT), the local information and communications technology council, is among the factors for the consistent growth of this industry. The fiscal incentives for new investments provided by the BOI, PEZA, and the Local Government of Iloilo City also help the city’s efforts to attract more investment in the sector.
Iloilo City has 6 PEZA-registered ecozones, which include five Information Technology-Business Process Outsourcing (IT-BPO) locations and a Tourism Ecozone. Robinsons Land Corporation (RLC) recently broke ground for its third Cybergate Iloilo office tower in its Robinsons Place Pavia Complex after topping off Cybergate Iloilo Tower 2. According to RLC, both towers are registered with the Philippine Economic Zone Authority (PEZA) which will allow occupiers to enjoy fiscal incentives from the government. Cybergate Iloilo Tower 2 is a 9-storey office building with a floor plate of 2,400 square meters while the planned Cybergate Iloilo Tower 3 will be a 14-storey building. RLC also aims to secure LEED certifications for the office towers.
Another major real estate project also offers office spaces for IT-BPM firms. Megaworld Corporation has developed the Iloilo Business Park, an integrated urban township in a 72-hectare property in the bustling district of Mandurriao, Iloilo City. This is envisioned to be the new central business district of Western Visayas, strategically located at the heart of Iloilo City, which boasts of being a center for education and the largest source of quality labor force in the entire Region 6.
The companies include Concentrix, TELUS International, LexisNexis Legal & Professional, DONE by NONE, IGT Solutions, SPI Global, RELX, Sagility, and Unisys, among others. According to Colliers, Iloilo is one of the most preferred outsourcing destinations due to its improving infrastructure, rapid commercial development, and available talent pool.
There are also proposed industrial parks in other areas in Iloilo such as the Bamboo Technology & Development Park in Dumiles, San Enrique; Barotac Nuevo Industry & Economic Park in Tinori-an, Barotac Nuevo; Dumangas Agro-Industrial Zone in Sitio Naluoyan, Barangay Sapao, Dumangas; Pavia Special Economic Zone; Leganes Industrial Growth Center; and Eco-Tourism of Cabatuan, Iloilo, Cabatuan.
FUTURE PLANS
Envisioning Iloilo City’s economic landscape over the next decade reveals a bright and
promising trajectory, supported by robust infrastructure such as ports, road networks, and other essential utilities like water, power, and connectivity. With these foundational elements in place, the city is poised to attract further investment across diverse sectors, fostering innovation, job creation, and sustainable economic growth.
Plans are conceptualized to improve and expand infrastructure in specific areas of Iloilo
City, taking into account the city’s limited land area of 78.34 sq. km. One such initiative is
the proposed Fort San Pedro Reclamation Project, which aims to reclaim land along the
waterfront near Fort San Pedro stretching down to the next town, which is Oton. This
project seeks to create additional space for commercial, residential, and recreational
development, thus maximizing land utilization. Additionally, the Metro Iloilo
Special Economic Zone at Bitoon, Jaro, presents another avenue for future development.
This economic zone is projected to further attract investments and spur economic growth.
On March 1, 2024, the Iloilo City government led by Mayor Jerry Treňas signed a landmark joint ventures agreement with MetPower Venture Partners Holdings, Inc., Metro Pacific Water Investments Corp., and Metro Pacific Iloilo Water for the construction of a cutting-edge Integrated Solid Waste Management Facility (ISWMF).
“This monumental achievement solidifies Iloilo City’s position as the pioneer in sustainable waste management nationwide. The ISWMF, a beacon of public-private partnerships (PPP), ushers in a new era of technology dedicated to creating value from waste streams. This initiative aligns with our commitment to environmental stewardship, renewable energy adaptation, and the principles of a circular economy,” according to the mayor.
This state-of-the-art facility employs waste-to-energy (WTE) technology, converting waste into Refuse-Derived Fuel and Biogas, recognized as renewable energy sources by the Department of Energy. It addresses the impending challenges posed by the limited lifespan of the Calahunan-engineered sanitary landfill in Mandurriao. It significantly reduces the waste in Iloilo landfills, conserves natural resources, minimizes environmental impact, and contributes 3.5 megawatts to our desalination plant, Mayor Treňas explained.
The provincial government of Iloilo led by Governor Arthur Defensor Jr. also plans to develop the Leganes Special Economic Zone with a Port Facility to be registered by the Philippine Economic Zone. The 285-hectare proposed industrial estate will house special economic and non-traditional export processing zones, with a port facility of international standard. It will be master-planned with berthing provision for local and international carriers, with a storage area for 20 and 40-footer containers. The project, which will take up to 8-year duration of development, has an estimated cost of P34.8 billion.
The Iloilo Provincial government also wants to implement a world-class, state-of-the-art Sports, Recreation, and Wellness Hub Project. The project comprises the rehabilitation and improvement of the existing Iloilo Sports Complex. It also includes the establishment of recreational and wellness amenities and other infrastructure support. It will be located at the Magsaysay Village, in Lapaz, Iloilo City. The estimated cost of the project is P3.5 billion and will require eight years for completion.
Another proposed project of the provincial government is the development of the Iloilo Business District. To be called the Integrated Government Center & Urban Township Project, it will be developed at the 5.56-hectare property in barangays Bolong Oeste and Inangayan, Santa Barbara town, Iloilo. The project aims to host government agencies, commercial establishments, residential units, and the proposed provincial Resiliency Command Center. The project will include sustainably designed, mixed-use multi-level buildings located in an inclusive community. Its estimated project cost is P3.0 billion.
Governor Defensor will continue to implement the strategies to achieve its vision anchored to its recovery agenda which coined the “Movement for a Robust, Progressive, Globally Competitive, and Resilient (MoRPRoGRes) Province of Iloilo.”
The said agenda, introduced by the governor during his inauguration, emphasized the importance of positioning Iloilo as an ideal investment destination by building its fundamentals for investing in the four basic sectors that are substantial for the development of the province. These are power and energy, water, telecommunications, and road networks.
On the other hand, Iloilo City will continue to implement a multi-faceted approach that includes infrastructure development, healthcare, education, environmental conservation, and livelihood programs. This approach will ensure that the economic development and infrastructure projects are inclusive and will benefit all residents of the city.
