Big on Service
A big student population, shopping and service establishments drive business in Legazpi City
Published in Philippine Business Volume 9 No. 1

Need a place to launch a fast food empire? You don’t have to set up in Manila right away – not if you want to do like what Legazpi City’s homegrown Bigg’s – touted by Entrepreneur magazine as the next Jollibee – did it. Despite the presence here of McDonald’s and Jollibee’s four outlets, Bigg’s remains a popular 24-hour hamburger deli in Legazpi City. Perhaps its round-the-clock service is proof that this city (population: 157,010) in fact may be in the league already of those that no longer sleep.

It also appears that youth brings dynamism to a region virtually unknown for many years except for its typhoons and Mayon Volcano’s eruptions. The city is old, and traces its foundation to the Spanish era – but it has a predominantly young population. In particular, thousands of college students study in its universities and spend, shop, eat and drink, bringing good business to a lot of establishments.

The newly-elected City Mayor, Noel Rosal, at 37 years old is also young and appears not to be sleeping at his job, too. He’s fired up with plans. He relates he’s just been to Manila to meet with the Chair of the Philippine Ports Authority (PPA) on talks to improve the city port – an ambitious P500-million undertaking. And before nine o’clock in the morning, Rosal has started to meet with people pitching a P12-million Geographical Information System (GIS) that he says in serious tones would help the city efficiently gather taxes and revenues. With this, City Hall, he says, targets P300 million in annual revenues.

“We want to be known as a service city” volunteers Rosal. Legazpi City has no large scale industries or manufacturing facilities. Instead, in this city (534 kilometers south of Manila) surrounded by rolling hills and guarded coolly by the beautiful Mayon Volcano, big business spells the 3S: shopping, studying, and spending.

Mall and Business Park
In December 2001, Pacific Mall — the centerpiece of Landco Pacific’s Landco Business Park in Legazpi — opened to enthusiastic response from residents not only from the city but from towns in surrounding provinces as well. Mall retailing and its attendant services such as dining and entertainment in Legazpi have a ready and huge market potential of almost four million from the surrounding towns in the province of Albay, as well as other provinces such as Catanduanes, Sorsogon, Camarines Sur, and Camarines Norte.

Developer Landco, a Metro Pacific company, took a gamble in the city when it launched its Landco Business Park-Legazpi in 1995. Today, almost 80% of the prime lots within the planned business park is sold. Landco is converting the area into a classy commercial hub, housing retail stores, wholesales stores, showrooms, and service establishments. A zoning plan keeps a special area for hotels and designated row for restaurants and bars.

Before Pacific Mall, Legazpi already had its homegrown Legazpi Commercial Center or LCC, now a huge retail giant with branches in Naga City and Tabaco City. Shopping taps the consumerist bent of the youth population, all the more fired up by the advent of cable television and the Internet.

Schools and Brainpower
Legazpi City is home to two universities. One is the state-owned Bicol University, one of the country’s biggest, acknowledged as an engineering powerhouse and also known for its agricultural/fisheries research. Another one is the Catholic-run privately-owned Aquinas University.

Together with about a dozen other colleges, the city is virtually kept alive, economically by thousands of students coming from the different provinces of the Bicol region. Boarding houses, fast food outlets, clothes shops, and service establishments thrive because of the high demand from students and the young people.

“We produce more than 30,000 graduates a year,” says Rosal, mostly in the field of Information Technology, Engineering, and the professions. Don Bosco Technical and TESDA have recently put up branches here to meet the high demand for education.
This rich minefield of brainpower made New York-based, multinational firm Innodata put up a data conversion center in the city last year – employing 600 local graduates of the city. The center currently operates in three shifts, seven days a week, and thirty days a month.

In 2001, New York-based Innodata set up in Legazpi city, employing 600 locals residents

Areas for Investments
Tourism is another area where Legazpi City and the province of Albay can further benefit from. Mayon Volcano is of course famous, but the city may need to improve the packaging or promotion of its tourist attractions which could include the province’s beaches and caves, as well as its festivals such as the Ibalong Festival held every October and the Magayon (meaning “beauty / beautiful”) Festival held every May. “We also want to build a world-class golf course here,” adds Rosal.
The City government is accelerating improvements so that the “service city” will be true to its name. Among these is the improvement of airport facilities.

To further boost the image of a shopping capital in the region, Legazpi will build another mall which will cater to the lower-income bracket and will be patterned after the successful Tutuban Mall at Divisoria in Manila.

The Philippines is composed of over 7,000 islands scattered over 3 major island groupings - Luzon, Visayas, Mindanao. While the main business centers are in Metro Manila, Cebu, and Davao, there are many other places with good business potential.

Click here to view Philippine map