Numbers Don’t Lie

Everything changed for Metro Cebu when the Cebu Mactan International Airport (MCIA) was privatized in 2014. It will be recalled that the consortium of Megawide Corp. and GMR of India bested six other bidders to win the rights to rehabilitate the existing terminal, build a new international terminal and manage the landside operation of the country’s second busiest gateway.

Since assuming stewardship of MCIA in November 2014, tourism and commerce boomed in Central Visayas. From inbound traffic of only 6.5 million passengers and tourists when the consortium took over, the number doubled to 13 million by the end of 2019. From only 11 airlines calling on Cebu in 2014, 25 airlines began servicing the hub in 2019. As a result, Cebu is now connected to ASEAN, North Asia, the United States, and the Middle East. Some P19 billion in annual tourism revenues is pumped into Cebu every year, thanks to the connectivity that MCIA provides. This allowed Central Visayas to grow by an impressive rate of 8.2% from 2015 to 2019.

The opening of the new international terminal in July 2018 cemented Cebu’s place as a prime tourist destination in the Asia Pacific region. It has since been a source of pride not only for Cebuanos but for all Filipinos. In 2019, it won the much-coveted World Architecture Award, besting the famous Jewel Airport Terminal of Singapore. That same year, it won two grand medals from the Hong Kong and American Institutes of Architects, respectively. MCIA was recognized as the best in airport marketing by RoutesAsia for the number of airlines that MCIA has been able to attract. It was also named Asia Pacific’s medium-sized airport of the year by the CAPA Center of Aviation.

I planned to visit Cebu to witness this new source of Pinoy pride but was unable to do so due to the pandemic. I finally got the chance to visit last week. Seeing the airport in person made me understand why it bagged multiple global awards. The design of the building is gripping. Its roofline, made of wooden gluelam timber, is meant to depict Cebu’s coastal waves. Its floors are meant to reflect Cebu’s gleaming sand with its mother-of-pearl inlayed floor slates. What struck me, however, was the thoughtfulness of its design and the use of technology to make the travel experience as seamless as possible.

In this airport, X-ray upon entrance is no longer necessary since a four-level inline X-ray facility is installed in the baggage handling conveyors. Check in counters were purposely made lower in height for ease in baggage loading. Check-in desks were made lower too so as to put the ground staff at eye level with the passenger. No one is superior in this airport. LED colored lighting is calibrated to make passengers feel cool and relaxed. Airline ticketing kiosks are within steps from the check-in counters for ease in transactions just in case one has to pay for overweight luggage or change their ticket. The canopy of the bridge that connects the terminal to the driveway is made of a material used by NASA that allows sunlight in but UV rays out. In the baggage claim carousel, baggage trolleys are pre-positioned beside the carousel for easy access.

Aesthetically, the airport uses Filipino raw materials whenever possible. They figure prominently in the check-in and immigration counters. Earthy, dramatic and erudite — this is the language of Filipino architecture for the 21st century.

MCIA has been a game changer for Cebu’s image and economy and Megawide deserves full credit for doing good by its government franchise. Neither government nor the riding public have been shortchanged by this public private partnership (PPP) contract.

Last year, Megawide won another PPP bid, this time to rebuild and operate the historic Carbon Market in downtown Cebu.

Carbon Market is a seaside central market — it is Cebu’s equivalent to Divisoria. There, you will find everything from food to construction supplies to garments. The 7.8-hectare facility is 120 years old and has grown organically since its inception. In other words, it is a hodgepodge of buildings, loosely connected with vendors spilling in every direction. Sanitation facilities are practically non-existent and the place has fallen to filth and squalor.

Carbon has been a center for crime and narcotics. It is where shabu is manufactured (as proven by seven arrests) and where racketeers operate five-six loan schemes.

The task of Megawide is to convert the place into a world-class farmers market. This means tearing down the decrepit buildings and building new ones; installing new water, drainage and electric systems; clearing and relocating informal settlers; clearing and declogging sidewalks; managing traffic flow; building new family and tourist friendly features; and, of course, managing the vendors without displacing or increasing rental rates. All these will cost about P5.5 billion pesos. In exchange, Megawide gets the right to operate the market for 50 years.

When completed, Carbon will have a new main public market building, a wholesale market, the Puso Village and gastronomic center (named after the Cebuano rice pouch), a lifestyle village, a wharf with airport check-in, the Sto. Niño Park and Chapel and the New Freedom Park, among others.

Merchants and retailers will be charged a fixed rental rate as determined by Cebu’s LGU. They will be provided uniform stalls and display counters for a clean organized look. Janitorial facilities will be done in-house to ensure mall-like cleanliness. Goods coming and going from the market will be managed by a barcode system for better cash control.

Megawide envisions Carbon to be a showcase of Central Visayan products — be it in gastronomy (street food and high cuisine), packaged foods, garments, homeware, toys, and furniture. It will be a permanent showcase where local and foreign buyers can transact.

When completed in 2024, Carbon will be the equivalent of the Sydney Fish Market, the Vancouver Farmer’s Market, or Clark Quay Singapore, albeit with a Cebuano flair. It will be a place where pedestrian and bikers have dominion over cars, where families can attend mass and enjoy open spaces, and where tourist can shop in comfort. More importantly, it will be a place where local merchants can eke out a living with dignity.

Carbon is seen to be a major tourist destination in Cebu which will unlock billions of pesos a year in economic activity. Early computations suggest that the Cebu’s LGU can easily generate five times more taxes from the rejuvenated Carbon as compared to its former state. The privatization of Carbon serves as a template for other decrepit central markets around the country.

The Mactan Cebu International Airport coupled with Carbon yields financial, social and economic benefits for Cebu. It also improves its global profile. These are the fruits of PPP. No one can deny that public infrastructure is better managed by the private sector rather than government. As we look forward to a new government in 2022, we hope that expensive official development assistance (foreign loans for infrastructure development) are put on the back seat in favor of PPPs.


Andrew J. Masigan is an economist

Facebook @AndrewJ. Masigan

Twitter @aj_masigan