Reality Check on City’s ‘Business Boom’

By Francis Allan L. Angelo

Iloilo City officials celebrated via a press release in February 2025 the rise in business registrations in 2024 as proof of “overwhelming confidence” from the private sector.

On the surface, the numbers seem to support this rosy picture. But a deeper analysis of the city’s own data reveals a narrative that is less about confidence and more about concern.

The headline figures or plain, aggregate numbers are simple enough: the total number of registered businesses grew from 16,100 in 2020 to 19,600 by the end of 2024. This is, technically, an upward trend.

However, the story of economic health is not reflected in total numbers but in momentum. And Iloilo City’s economic momentum is hitting a wall.

Let’s look at the rate of growth. After a strong post-pandemic recovery that saw business growth accelerate from 0.6% in 2021 to 7.4% in 2022 to a robust 8.6% in 2023, the engine stalled. In 2024, the growth rate plummeted to just 3.7%.

This is a catastrophic deceleration of 57% from the previous year. The pace at which new enterprises were being established was more than cut in half in just twelve months. To frame this as “overwhelming confidence” is to ignore the most critical part of the data – the dramatic slowdown.

This slowdown isn’t happening in a vacuum. It stems from clear economic headwinds that should worry city planners.

First is the rising cost of doing business. The city’s significant Real Property Tax (RPT) hike has been directly linked to increased rental costs, hitting both commercial and residential tenants. This policy has created a direct disincentive for new entrepreneurs and puts pressure on existing businesses (which are most micro, small and medium enterprises), potentially impacting license renewals.

Second, persistent local inflation, which has outpaced the region, makes Iloilo a more expensive place to operate. Capital is mobile. When investors can get more for their money in neighboring cities, they will. We may be losing out on investment that would have otherwise come here.

Finally, with the 2025 midterm elections on the horizon then, political uncertainty often prompts investors to adopt a “wait-and-see” approach. This pause in capital spending is a common phenomenon that punctures the veneer of stability needed for long-term growth.

While celebrating any growth is tempting, public officials have a duty to present an honest picture. The raw total of businesses has increased, but the sharp, sudden drop in the growth rate is a clear warning sign. Masking a 57% deceleration with optimistic rhetoric does a disservice to the very business community the city claims to support.

Confidence is earned through a stable and affordable business environment, not just by citing incomplete data. Ignoring these warning signs now will only make the path ahead more difficult.

To truly foster a resilient business environment, the city government and community stakeholders must move beyond celebratory headlines and engage in honest assessment and proactive problem-solving:

-Demand Granular Reporting. The city’s business licensing office must provide more than just aggregate totals. Future public reports should clearly distinguish between new registrations, renewals, and businesses that did not renew. This transparent data would offer a true barometer of economic health, revealing the actual churn rate and helping identify sectors under stress.

-Profile the Closures. Data shows what is happening, but not why. Journalists and business chambers should investigate and profile the enterprises that have folded. Interviews with former owners would provide invaluable, ground-level insight into the real-world impacts of high rental costs, the RPT hike, and inflation. These stories are essential to understanding the challenges and crafting effective policy solutions.

-Policy Review and Dialogue. Armed with clearer data and qualitative evidence, a serious, public dialogue about the city’s economic policies is necessary. This includes a frank re-evaluation of the RPT’s impact on small and medium enterprises. Lasting confidence is built when the business community sees that officials are listening to their concerns and are willing to adjust policies that inadvertently harm them.