Davao City is emerging as a viable alternative to Manila for shipments of agricultural commodities on the back of an expanding retail network, according to a report of the United States Department of Agriculture (USDA).

The USDA said the growing economy of Davao City, which serves as the economic and administrative hub of Mindanao, makes it an attractive market for exporters.

Last year, the economy of the “King City of the South” was valued at approximately $13 billion, accounting for more than half of Davao Region’s gross domestic product (GDP) of $25 billion.

The foreign agency noted that the city has taken key initiatives such as a food terminal complex, coastal road, and port expansion to further fuel growth in trade and logistics in the coming years.

“These developments position Davao City as a dynamic and strategic market for future US exports, particularly in agriculture, construction materials, and consumer goods,” the report read.

In terms of agriculture, the big draw for exporters is the rising retail market in the city, fueled by a growing population that increases demand for diverse food and beverage products.

Davao City recorded a 23-percent growth in wholesale and retail trade to around $6 billion last year, suggesting expanding opportunities for US brands to meet the demand.

“While most grocery stores and wet markets in Davao City primarily sell local products, warehouse clubs, hypermarkets, supermarkets, and convenience stores offer a wide range of imported goods such as meat, canned goods, snacks, sauces, condiments, and pet food,” the USDA said.

The USDA identified wheat, anhydrous ethanol, dried fruits, meat products, frozen potatoes, snack foods, confectionery, and dairy products as among the top exports that could see significant growth.

Food processing presents another opportunity for exporters, with the city’s manufacturing sector valued at about $2 billion in 2024.

Food manufacturers like food and beverage companies and bakeries primarily import ingredients for their products.

The USDA said this sector is an attractive market for exports of wheat, vegetable oil, seasonings, malt, tapioca starch, and fruit concentrates.

Davao City is also home to one of the largest accommodation and food service sectors outside Manila, with an estimated value of $500 million last year.

The report pointed out that international hotels and high-end restaurants within the city and the nearby Samal Island feature restaurants that primarily favor ingredients coming from the US.

Banking on the city’s growth trajectory, the USDA urged exporters to leverage trade shows such as World Food Expo Mindanao and Davao Agri Trade Expo to build their presence.

They may also offer trade support such as sampling, consumer and trade promotions, and trade services to foster strong consumer appetite, the USDA said.