Iloilo is open for business. But can businesses afford to stay?

By Janvie Soqueña Amido

Iloilo is open for business.

We say it proudly, and we have reasons to. Our skyline is changing. Commercial districts are expanding. New restaurants and cafés continue to appear. National brands are entering the market. Hotels, condominiums, supermarkets, offices and other developments are rising across the city. Entrepreneurs are encouraged to start businesses, while government continues to promote Iloilo as one of the country’s most attractive places in which to invest.

But perhaps we have spent too much time celebrating businesses that open and not enough time asking what happens to them afterward.

Because opening a business is one thing.

Keeping it alive is another.

Walk through our malls and commercial districts and pay attention—not only to what is opening, but also to what has disappeared. A restaurant that seemed promising a year ago is suddenly gone. A familiar shop closes. Another commercial space is looking for a tenant. Some local businesses that once generated considerable excitement quietly disappear.

This does not mean Iloilo’s economy is failing. Businesses close everywhere, and not every closure is caused by the economy. Some businesses are poorly managed. Others misread the market, choose the wrong location, expand too quickly or simply face better competitors.

But when businesses simultaneously confront expensive electricity, rising property costs, taxes, rent, inflation, financing costs and consumers whose household budgets are increasingly stretched, we should at least ask whether our definition of a “business-friendly city” needs to evolve.

Consider electricity.

For a household, a higher electricity bill is painful. For a business, it can fundamentally alter the economics of operating.

Imagine a bakery running ovens and refrigeration throughout the day. A restaurant operating freezers, chillers and air-conditioning. A hotel keeping hundreds of rooms comfortable. A laundromat running machines for hours. A manufacturer powering equipment. A supermarket protecting thousands of pesos worth of perishable inventory.

Electricity is not optional.

Neither are taxes.

The debate over real property taxation in Iloilo City has understandably generated strong reactions. Property values cannot remain frozen forever while the city develops. Government needs revenue to build roads, improve drainage, collect waste, provide public services and maintain infrastructure. Businesses benefit from these services too.

Paying reasonable taxes is part of participating in a functioning economy.

But there is an equally legitimate question government must answer:

At what point does taxation begin affecting competitiveness?

The issue is not simply real property tax. It is the cumulative burden.

A business pays national taxes and local business taxes. Depending on its circumstances, it may directly or indirectly absorb real property taxes. It pays permits and regulatory costs. It shoulders wages and mandatory employer contributions. Then come electricity, water, internet, rent, insurance, logistics, inventory and financing.

A landlord facing higher property costs may eventually increase rent. A restaurant facing higher rent and electricity may increase menu prices. A retailer facing higher logistics costs may adjust its margins. Eventually, at least part of these increases finds its way to the consumer.

Every individual cost may have an explanation.

But an entrepreneur does not pay these expenses individually in theory.

The entrepreneur pays all of them at the same time.

And after paying all of them, there remains one expense government cannot regulate away and entrepreneurs cannot ignore:

The customer must still be willing—and able—to buy.

This is where Iloilo’s economic conversation becomes more uncomfortable.

We celebrate crowded malls. We celebrate new commercial developments. We celebrate restaurants filled during opening week. We celebrate another international brand arriving in Iloilo.

But foot traffic is not necessarily purchasing power.

A mall can be crowded with people who are spending very little.

A café can become viral on social media and still struggle to generate enough repeat customers to cover rent and payroll.

A restaurant can have long lines during its first month and empty tables six months later.

A local entrepreneur can sell out during Dinagyang or at a weekend pop-up and struggle to make enough sales on an ordinary Tuesday.

The question we therefore need to ask is not merely whether Ilonggos like to spend.

It is whether Ilonggos have enough disposable income to sustain the expanding number of businesses competing for the same peso.

Inflation changes behavior.

When food becomes more expensive, households adjust. When electricity rises, households adjust. When rent, transportation, tuition, medicine and other necessities consume more of the family budget, discretionary spending becomes the easiest thing to reduce.

The family eats out less often. Coffee becomes an occasional treat. The new pair of shoes can wait. A weekend hotel stay is postponed. Furniture can be replaced next year. That beautiful product from a local artisan is admired but not purchased.

Individually, these are ordinary household decisions.

Collectively, they determine whether businesses survive.

This raises a question that deserves serious economic study:

Are we expanding Iloilo’s commercial economy faster than we are expanding the purchasing power of Ilonggos?

We can build more malls. We can open more commercial spaces. We can produce hundreds of new entrepreneurs through livelihood programs. We can convince more franchises to enter Iloilo.

But buildings do not create sustainable consumer demand.

Income does.

That is why the conversation about making Iloilo business-friendly must also become a conversation about wages, productivity and the quality of jobs we are creating.

We often celebrate the number of jobs generated by a new investment. Perhaps we should also ask what those jobs pay.

Can an ordinary Ilonggo worker, after paying for food, housing, electricity, transportation, education and other necessities, still participate meaningfully in the consumer economy we are building?

Because workers are not simply expenses appearing on a company’s payroll.

Workers are customers too.

The salary of a BPO employee becomes revenue for a restaurant. A teacher buys clothes from a retailer. A nurse orders food from a local entrepreneur. A construction worker buys groceries. An OFW family renovates a house, creating income for contractors, hardware stores, carpenters and furniture makers.

This is how a healthy local economy works.

Businesses create jobs. Jobs create income. Income creates consumption. Consumption sustains businesses. Growing businesses create more jobs.

But when any part of that cycle weakens, the entire ecosystem feels it.

This is why we must be careful about solving one economic problem by creating another.

Businesses cannot endlessly absorb higher taxes, utilities, rent and wages without eventually increasing prices, reducing employment, delaying expansion or closing.

Workers, on the other hand, cannot indefinitely absorb higher food, electricity, housing and transportation costs without demanding better wages or reducing consumption.

Both sides have legitimate concerns.

And if businesses cannot afford to pay significantly more while workers cannot afford to live on what they currently earn, perhaps we are dealing with something much bigger than a wage dispute.

We have a productivity and competitiveness problem.

Iloilo therefore needs a more sophisticated measure of economic success.

Do not tell us only how many businesses registered this year.

Tell us how many closed.

Tell us how many businesses survive their first year, third year and fifth year.

Tell us how many microenterprises become small businesses, how many small businesses become medium enterprises, and how many Ilonggo companies eventually expand outside Western Visayas.

Tell us whether commercial rents are rising faster than business revenues.

Tell us how much of an average small business’s income disappears into electricity, rent, taxes, financing and compliance before the owner earns a peso.

And while we are measuring businesses, measure households too.

How much disposable income does the average Ilonggo family actually have after paying for food, housing, electricity, transportation, education and debt?

Because there is a huge difference between an economy where people have money to survive and an economy where people have enough money to participate.

Iloilo should continue welcoming investors. We should continue helping startups and MSMEs. We should encourage young Ilonggos to become entrepreneurs. Government should continue making registration easier and investing in infrastructure.

But perhaps being “open for business” should mean something more.

A fast business permit is good.

But the real test begins after the permit is issued.

Can that business afford electricity?

Can it afford rent?

Can it pay reasonable taxes?

Can it access affordable financing?

Can it pay decent wages?

Can it withstand inflation?

Can it compete?

And after surviving all of those, are there enough customers with enough disposable income to keep buying?

That is the real test of a business-friendly economy.

The strongest evidence of Iloilo’s economic success will not be another ribbon-cutting or investment announcement.

It will be the entrepreneur who started with one store and eventually opened ten.

It will be the Ilonggo company that started with five workers and now employs five hundred.

It will be the local brand that began in Iloilo and eventually finds shelves in Manila, Singapore, Tokyo or New York.

It will be workers whose incomes grow alongside the economy and who can afford not merely to survive but to enjoy the prosperity they helped create.

Perhaps that should become our next economic ambition.

Not simply an Iloilo where businesses can open.

But an Iloilo where businesses can stay, grow and thrive.

Because ultimately, businesses do not survive on investment announcements, ribbon-cuttings or crowded malls.

They survive on customers.

And customers need money in their pockets.

Iloilo is open for business.

Now we must make sure businesses can afford to stay.