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Boom Cities (Part 2): The role model, Naga City

From a city grappled with low business confidence in the 80s, Naga has surged as the most competitive component city nationwide in 2015.
By Victoria Vizcarra |

 

UNDERDOG. From a city grappled with low business confidence in the 80s, Naga’s economy now generates gross receipts of more than $1 billion a year. Photo from Flickr 

 

Here's the first of the 3-part series on boom cities: Boom cities (Part 1): The crowd pleaser, Iloilo City

 

Naga City was not always the poster child for well-behaved business. In the 1980s, the city grappled with low business confidence and climbing unemployment rates.

 

But since then, it has made a drastic turnaround: According to National Competitive Council (NCC) surveys, Naga’s economy now generates gross receipts of more than $1 billion (P46.50 million) a year, while unemployment rates are only at around 5% to 6%.

 

Hailed as the country’s most competitive component city in 2015, it was no surprise that Naga dominated the NCC’s rankings in government efficiency as well.

 

The rest of the country has even been taking notes from the city in transparency and good governance: The national government’s own Anti-Red Tape Act, enacted in 2007, was modeled after Naga City initiatives like its Citizen’s Charter and i-Governance program, both of which were spearheaded six years earlier by the late Naga mayor and former interior and local government secretary Jesse M. Robredo (husband of presumptive vice president Maria Leonor “Leni” Robredo).

 

“The city government takes pride in firms being able to do business with no ‘informal costs’,” said Reuel M. Oliver, executive director of the Naga City Investment Board (NCIB). “There are no cordons sanitaires.”

 

The NCIB itself is a proactive part of Naga’s thriving business ecosystem by providing investors what Oliver calls “after-care” services. “The NCIB shields investors from bureaucratic red tape by providing a single point of transaction,” he said, whether it is fielding complaints or needs, or helping them with registration requirements.

 

 

 

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MOST BUSINESS-FRIENDLY CITY. In March, Naga was dubbed one of the country’s Next Wave Cities—a list of top information and communication technology (ICT) destinations outside Metro Manila. Photo from Flickr  

 

 

 

Hall of famer

A hall-of-famer among the Philippine Chamber’s “Most Business-Friendly City” awardees, Naga is nothing if not startup-friendly, too: micro, small, and medium enterprises (MSMEs), which make up around 95% of the city’s economy, “are largely the reason for the city’s economic dynamism,” Oliver revealed. “Without them, multinationals and Manila-based firms will not give Naga a second look.”

 

Related: ABAC to focus on digital measures for MSMEs


To get more Nagueños into the entrepreneurial spirit, the city also launched in August 2010 Barangay GROW (Growing Opportunities for Wealth), a program that aims to discover “star” micro-enterprises.

 

In March, Naga was dubbed one of the country’s Next Wave Cities—a list of top information and communication technology (ICT) destinations outside Metro Manila to promote more IT-related investments, compiled by the Information Technology and Business Process Association of the Philippines.

 

Related: PH BPO industry on target to reach $25B by end-2016


“There’s a lot of talent in the city for [IT-BPO’s] sub-sectors,” said Oliver. To nurture this emerging field, the city is working on encouraging more animation, multimedia, software, and engineering design firms to open shop.

 

And it is not alone: “Colleges and universities are also open to changes in their own programs to suit the needs of the industry,” said Oliver, referring to Ateneo de Naga University, which began to offer a Bachelor’s degree in Digital Illustration and Animation in 2000—the first in the country to do so.

 

Government-funded local incubator, Naga City Creative Media Center (NCCMC), was also established to boost the city’s animation industry and other creative fields in IT.

 

 

Homegrown business: Nueva Caceres Technology Solutions Inc

Magno Edilberto “Eddieboy” Conag III fondly remembers general assemblies at his alma mater, where Fr. Raul Bonoan, S.J., the late president of Ateneo de Naga University, would exclaim: “Stay in Bicol, come back to Bicol!” Conag took those words to heart when he set out to build Nueva Caceres Technology Solutions (Nueca) in September 2011—even naming it after the city’s original name under Spanish rule.

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The native Nagueño always wanted to be an entrepreneur in his home city. “When I grew older, I began to realize that there seems to be a direct relationship between poverty in the region and the leaving of highly trained and brilliant minds,” he recalled.

 

Even before Nueca became a reality, Conag approached Naga City’s then-mayor, the late Jesse Robredo, in 2005 about setting up an incubation facility. Robredo’s assistance was instrumental in the building of NCCMC, a local incubator, which now outgoing mayor John Bongat continues to support by linking it to the Metro Naga Chamber of Commerce. “I was a trying-hard technology entrepreneur, but have always felt that help is all around me in this city,” he recalled.

 

Conag did not have the time or resources to earn a conventional MBA, so instead he found mentors in the local business leaders of the city’s business chamber, who took him under their wing and put him through a kind of “fast-track MBA” even though he knew nothing about C++, iOS, or cloud computing.

 

One of his mentors gave his fledgling business a sizable loan without a strict payback deadline; another lent him a then-new iPad 2 to test apps on. “The city is small and people here know one another, from guys in the city hall down to the civic organizations,” Conag said. “People here are empowered, making enterprises thrive. [They’re] kind and generous; you feel that they want you to succeed.”

 

 

*****

Victoria is a freelance writer who covers business, tech, and lifestyle. She is also the former features editor of Entrepreneur Philippines magazine. Follow her on Facebook, https://www.facebook.com/vikkiverka.


This article was originally published in the February 2015 issue of Entrepreneur Philippines magazine.

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