Yesterday, while driving home from southern Cebu, I found myself caught in an unusually heavy traffic buildup along the South Road Properties (SRP). At first, I wondered what was causing the congestion. Moments later, I realized that people were making their way to the grand opening of SM Arena Seaside Cebu.
The Arena is an impressive addition to Cebu’s urban landscape—a 19,000–square-meter indoor events venue with a seating capacity of up to 25,000, placing it among the largest event venues in the country. Its opening symbolizes how investment priorities in SRP have shifted over the past three decades—from an industrial growth strategy toward one centered on commerce, tourism, entertainment, institutional uses, and other service-oriented activities.
Yet as I slowly drove through SRP, I could not help but reflect on something I often discuss with my students.
Today, many people associate SRP with shopping malls, entertainment complexes, hotels, government offices, condominiums, and other mixed-use developments. Few realize that this was not the original economic vision for the reclaimed area.
According to the Japan International Cooperation Agency (JICA) Ex-Post Evaluation of the Metro Cebu Development Project III, the Cebu South Reclamation Project was originally conceived to support the establishment of a new industrial park. At that time, the Mactan Export Processing Zones had become increasingly congested due to the influx of foreign manufacturing enterprises. There was a growing need for another export-oriented industrial estate capable of accommodating additional investments and further stimulating regional economic development.
SRP was considered an ideal location because of its strategic proximity to the Mactan International Airport and the Port of Cebu. Even the South Coastal Road was envisioned not merely as a traffic solution but as critical infrastructure that would support industrial expansion while easing congestion in Cebu City’s urban core.
However, the same JICA evaluation also notes that the project’s land use eventually underwent a substantial transformation. Rather than evolving into a predominantly industrial estate, SRP developed into a mixed-use district composed of commercial establishments, institutional facilities, residential developments, light industries, and service-oriented businesses. The report explicitly recognizes that this represented a significant departure from the original objective of developing an industrial park and attracting foreign manufacturing enterprises.
This transformation is more than a story of urban planning.
It reflects the evolution of the Philippine economy itself.
I remember a student once asking me about the constitutional restrictions on foreign participation in the country’s natural resources. She wanted to understand why the Constitution adopted such limitations and how they relate to the Philippines’ present service-oriented economy.
I explained that the answer lies not only in constitutional law but also in economic history.
For centuries, the Philippine economy developed under colonial administrations whose economic policies generally emphasized the extraction and export of raw materials rather than the establishment of a strong domestic industrial base. The country became integrated into the global economy primarily as a supplier of agricultural commodities and mineral resources, while manufacturing and higher-value processing largely occurred elsewhere.
Had the Philippines industrialized earlier, many of its natural resources would have been processed locally into finished or higher-value products instead of being exported in their raw form. Industrialization would have generated skilled employment, accelerated technology transfer, strengthened domestic manufacturing, and allowed the country to retain a greater share of the value created from its own resources. Instead of exporting raw materials and importing finished products, the Philippines could have captured more of the economic benefits generated from its natural wealth.
This historical experience helps explain the philosophy embodied in the 1987 Constitution. The restrictions on foreign participation in the exploration, development, and utilization of natural resources were never intended merely to preserve ownership. Their broader objective was to ensure that the country’s natural resources contribute to national development under Filipino stewardship.
In other words, the Constitution is not simply asking who owns the resources.
It is asking how those resources should contribute to nation-building.
That discussion remains highly relevant today.
The Philippines has become predominantly a service-oriented economy, with growth driven by business process outsourcing, tourism, finance, logistics, real estate, and remittances. These sectors have generated millions of jobs and have become important pillars of economic growth. Yet they cannot entirely replace the strategic role of a competitive manufacturing sector.
Sustainable development requires moving up the value chain—transforming natural resources, human capital, technology, and innovation into higher-value products instead of relying primarily on the export of raw materials or the provision of services.
Viewed from this perspective, the story of SRP becomes especially meaningful.
What was once envisioned as Cebu’s next industrial growth center has gradually become one of the country’s premier commercial and mixed-use urban districts. The opening of SM Arena Seaside Cebu is therefore more than the inauguration of another landmark structure. It symbolizes Cebu’s continuing transition from an industrial aspiration toward a service-driven urban economy.
Whether this transformation represents the best long-term development path is a question worth discussing. A strong service sector is undoubtedly an asset. However, every successful economy that has sustained high levels of productivity—from Japan and South Korea to Taiwan and more recently Vietnam—has built its prosperity upon a combination of manufacturing, innovation, services, and technological capability.
This is precisely why the discussion becomes important in today’s debates on proposals to further liberalize the Constitution, including the expansion of 100 percent foreign ownership in certain sectors of the economy.
The issue should not be reduced to a simple question of whether more foreign ownership is good or bad.
The more fundamental question is:
What kind of economy do we want the Philippines to become?
If the objective is merely to attract more foreign capital, then liberalization may indeed encourage additional investments. But if the objective is long-term national development, the discussion must go beyond ownership. It must examine whether those investments strengthen domestic industrialization, encourage technology transfer, develop Filipino enterprises, create high-value employment, and increase the country’s productive capacity.
History teaches us that economic success is not measured solely by the amount of foreign investment entering a country. It is measured by how effectively that investment is transformed into industries, innovation, productive employment, and long-term national competitiveness.
The constitutional provisions on national patrimony embody this broader economic vision. They recognize that the country’s natural resources are finite national assets whose development should ultimately strengthen the Philippine economy and improve the welfare of future generations.
The South Road Properties reminds us that development is never static. Cities evolve with markets. Plans adapt to changing economic conditions. Public policy responds to new realities.
Yet every development decision also reflects the kind of economy we choose to build.
Perhaps the real issue, therefore, is not whether foreign ownership should remain at 40 percent or expand to 100 percent.
The real question is whether our policies—whatever ownership structure they adopt—help build a more productive, innovative, industrially competitive, and economically resilient Philippines. That, in my view, is the debate we should all be having.
As we celebrate another landmark in SRP, perhaps the question is not whether the project is successful. The more important question is whether it represents the kind of economic future we envisioned decades ago, and whether that future is still the one we aspire to build.
