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Long Reads

Why Is Cebu City's P8 Billion Carbon Market Redevelopment Project So Controversial?

By Paul John CaƱa
Sep 14, 2022

The plan to take the 100-year-old Carbon Market to the future looks good on paper, but critics—especially the vendors—have plenty of reasons to be upset.

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Sixty-four-year-old Lucena Obelza has been running her general merchandise store at the old Freedom Park complex at Carbon Market in Cebu City for 40 years. Business was so good back then that she would regularly earn about P300,000 a day.Ā 

But on July 18, 2022, the stalls at the old Freedom Park and Warwick Barracks were demolished to give way to a new Carbon Market. The project is based on a joint venture agreement (JVA) between the local government of Cebu City and listed engineering and infrastructure firm Megawide Construction Corp.

Drone view of Carbon Market on the second day of demolition, July 19, 2022Ā 


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Obelza and over 700 other vendors were forced out of their stalls. Some of them transferred to an interim market a stone’s throw away from the old site. Here the vendors tried to pick up where they left off and continue their business. But for many of them, it’s just not the same.

ā€œMalaki ang kaibahan,ā€ she says when I ask how much different life is now since she relocated her store to the new site. ā€œYung benta namin, almost kalahati ang nawala.ā€

It’s a similar story with 19-year-old Christ Felices, whose family ran a native gifts shop at the old Freedom Park. The business is as old as he is. He says the stall’s daily earnings used to reach about P2,000 to P3,000 per day. Now, in the new stall at the interim market, he says there are days when they make as little as P15 a day.

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Meanwhile, 52-year-old Antonio Remedio, who also used to run a gift shop at the old Freedom Park, has a different problem. After the demolition, he was provided a stall at the second floor of the interim bulding, just above Obelza’s new store. But he says he never opened his shop there because he knows he would lose customers. Now he's been served a notice that if he doesn't operate his business, he'll be charged penalties that may includeĀ closure of his stall and forfeiture of the privielege of being a market lessee.

ā€œPaano yung mga customers ko?ā€ he says when we get to his designated stall at the interim market. It’s empty and there’s a layer of dust on the shelves, just like many other stalls we pass on the way there. ā€œHindi sila pupunta dito.ā€

Instead, Remedio says he opted to move his business to another area on a busier part of the market, along P. Lopez Street near the University of San Jose Recoletos. But even there he says he earns far less than what he was making at the old site.

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ā€œYung kasama ko, kumikita sya dati ng mga P20,000 a month,ā€ he says. ā€œAng P20,000 doon sa dati, mga P5,000 na lang dito. Paano mabubuhay ang pamilya nila?ā€

Obelza, Remedio, and Felices are all members of vendors’ groups that have united under the umbrella organization Carbohanong Alyansa to challenge the planned redevelopment of Carbon Market.

ā€œWe’re not against modernization,ā€ Remedio says. ā€œWe’re against privatization. We believe the project should be handled by the Cebu City government, not Megawide.ā€

Carbon Market in Cebu has been in existence in one form or another since 1919

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PHOTO: Jack Ponpon
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How the Carbon Market redevelopment project started

As a public market where people congregate to buy and sell a variety of goods, Carbon Market has existed in Cebu City for over 100 years. According to historians, it was named after the coal depository of the old Cebu railroad, whose terminus was located in the area.

A modern structure was constructed at the market in 1990 and was last renovated in 2007. Over the years, more vendors occupied spaces in the old Warwick Barracks, which was a former American military garrison, and Freedom Park.

According to the JVA, Megawide submitted an unsolicited proposal to undertake the redevelopment project of Carbon Market on October 11, 2019. The company is no stranger to Cebu City, having worked on the Mactan-Cebu International Airport.

Megawide's proposed redevelopment plan involves 7.8 hectares of land in and around the old Carbon Market. The plan includes a park, a chapel, a lifestyle village, and a night market

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PHOTO: Contributed / Carbohanong Alyansa
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The Carbon Market proposal went through the usual vetting process for public-private partnerships, culminating in the awarding of the project to Megawide on November 18, 2020. The company formally announced the project through a disclosure to the Philippine Stock Exchange on January 11, 2021.Ā 

Megawide initially committed a total of P5.5 billion for the project, which will have a term of 50 years and is extendable for another 25 years. Basically, Megawide will construct, develop, and operate the mixed-use assets that will be built on the site of the old Carbon Market. It also includes the restoration of the historic Freedom Park into an actual landscaped park with tree-lined pathways.Ā 

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Artist's view of the redeveloped Carbon Market based on plans by Megawide

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PHOTO: Megawide
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The redevelopment plan involves building a landscaped park in the area known as Freedom Park

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PHOTO: Cebu City PubliC Information Office
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It’s a monumental project that the company believes will benefit all the stakeholders, not just the company itself—it’s expected to generate a steady income for the city at reduced operating costs, generate jobs in different sectors, increase tourism, and enhance the use of a prime piece of real estate in this part of the city.

ā€œThe Project is expected to bring financial and business opportunities to the city and will allow its local residents to maintain their traditions and culture, while also showcasing the same to all tourists and visitors,ā€ Megawide said in the PSE disclosure.

Based on the terms of the JVA, Megawide will remit to Cebu City an annual guaranteed payment that will increase over the course of five years: P5 million in year one, P14 million in year two, P34 million in year three, P48 million in year four, and finally, P50 million in year five and every year thereafter (with a 10 percent increase every five years to account for inflation).

In return, Megawide is entitled to ā€œcollect and receive all revenues arising from the development and operation of all the asset classes on the Project Site.ā€ This is how Megawide plans to earn its investment back.

The arrangement looks good on paper, but as evidenced by the experiences of the vendors, not all of the parties involved are happy.

An exterior view of the interim building, which is where vendors have been relocated while Megawide builds the modern Carbon Market


Interim market

Critics of the JVA, including some of the Carbon Market vendors, allege that no public consultations were conducted throughout the negotiation process and prior to the order to demolish the old structures in the area. But according to Megawide, this is simply not true.Ā 

ā€œI would say that it would be impossible not to do any consultation before you start a very significant and huge project, especially one that not everyone is really familiar with,ā€ says Lydwena Eco, deputy general manager for Cebu2World Development Inc., the Special Purpose Company or subsidiary Megawide created to oversee the redevelopment project of Carbon Market. ā€œWe even published several photos and videos of the public consultations that have happened in the past. It’s really in the best interest of a developer like Megawide to do consultations because it's part and parcel of the project development.ā€

While Megawide is building the more permanent structure that will house the commercial stalls in the new Carbon Market, the vendors were moved to a temporary building that everyone calls the interim market. It’s a barebones structure with concrete floors and an exposed ceiling, with the stalls created by black steel dividers.

When I visited the interim market, it was around three o’clock on a hot Saturday afternoon. It was stifling inside the market, and most of the sellers were fanning themselves or sitting in front of electric fans. There were plenty of unoccupied stalls and not a lot of customers. Ā The vendors that we talked to said foot traffic here is nothing compared to the old location. They say people don’t bother coming in when they could find what they need from the merchants selling their wares outside.

Empty stalls at the interim market. Vendors Esquire Philippines talked to said many have been unable to operate their stalls because of slow foot traffic inside the interim building

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PHOTO: PJ Cana
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The vendors also narrated their many complaints about being transferred to the interim market. They mentioned the alleged unfair practices of distributing the temporary stalls for those displaced by the demolition of the main market. Only the estimated 700 vendors in the old Freedom Park and Warwick Barracks were supposed to be transferred to the interim market. However, when the demolition happened, about 200 informal or ā€œmoduleā€ vendors located in the sidewalks surrounding the markets were also given space in the temporary market.

ā€œDito sila nilagay,ā€ Remedio says. ā€œPaano kami magkakasya? Siksikan na kami.ā€

Some stall owners also allegedly got multiple stalls in the interim market. Depending on their connections, these ā€œpowerfulā€ vendors who used to have only two or three stalls in the old site now have as many as eight or 10 stalls in the new location.

ā€œGumamit sila ng dummy names,ā€ Remedio says about the vendors with multiple stalls. ā€œIba-ibang pangalan, pero isa lang may-ari; yung anak or asawa ang nilagay na pangalan. Kapag meron ka, marami kang stall. Kung wala ka, ilalagay ka sa sulok.ā€

The location of the stalls themselves is another bone of contention for the vendors, who need to compete for the precious few customers who manage to make their way inside the interim market. Clearly, those who are near the entrances and are on the ground floor attract more shoppers, while those in the middle or at the second floor don’t get as many. This is a major reason why the vendors’ earnings have dropped significantly since being forced to vacate their old stalls.Ā 

ā€œTalagang naghihirap ang mga vendors dito,ā€ Felices says. ā€œHalos wala na silang benta.ā€

More empty stalls at the second floor of the interim building

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PHOTO: PJ Cana
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C2W admits that there is merit to some of these complaints.

ā€œUnderstandably, when there is change, there’s always a period of adjustment,ā€ Eco says. ā€œ(When the vendors) moved into the interim market, during the first few days, everyone had to adjust: us, the vendors, and the consumers. We needed to do a lot of information campaigns…to create awareness.ā€

Eco says the company installed signages and employed people to direct customers to the interim market.

ā€œWe're talking about the C, D and E markets,ā€ Eco says. ā€œHindi ito yung lagyan mo lang ng tarp, magbabasa agad. Hindi e.ā€Ā 

As for allegations of favoritism and reports of some vendors not having been allotted space in the temporary market, Eco invites the vendors to furnish Megawide a copy of the list of these stall-less vendors.Ā 

ā€œThe awarding of the stalls, it’s by the authority of the city government of Cebu,ā€ Eco explains. ā€œAnd Megawide does not have the authority to award stalls to anyone.ā€ She adds that the fact that the company does not have any say in who gets awarded a stall in Carbon Market is proof that the JVA between Megawide and the Cebu City government does not mean that the market has been privatized.

Some vendors of Carbon Market ply their wares outside in makeshift stalls and tents

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PHOTO: PJ Cana
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By C2W’s count, there were 748 vendors from the demolished market that were supposed to have been relocated to the interim market. But the company says it allotted space for 859 stalls, which should be more than enough to cover all of the displaced vendors and even accommodate ambulant or informal street vendors. Eco says that as of mid-September, there are currently 136 stalls that are still vacant at the interim market.

If you ask Megawide, the situation is improving at the interim market and that whatever inconveniences the vendors are experiencing now will be offset by the benefits once the new Carbon Market is completed.Ā 

Will rental rates increase?

But one other thing that vendors are also worried about is the looming increase in rental rates at the new Carbon Market.

Currently, the cost to rent a stall at the old Freedom Park is P8.50 per square meter per day. Ambulant vendors, or those merchants without a formal stall that ply their wares along the streets, pay a flat fee of P20 per day. Remedio and his colleagues say they only pay around P1,650 for their stall at the old location and it’s the same now, except the stalls at the interim market are much smaller. However, Annex D of the JVA contains a rent increase schedule for the next few years. If the terms in the JVA are upheld, rates for a typical stall in the new market will more than triple to P28 per square meter by 2024.Ā 

A supplemental memorandum of agreement signed between the Cebu City council and Megawide through C2W grants special concessions to vendors. These include a guarantee ā€œthat there shall be no displacement of all duly registered vendors with the Market Authority,ā€ and that utmost transparency and accountability must be observed in the selection, awarding, and assignment of beneficiaries, stalls, and spaces of the Public Market.ā€Ā 

Some vendors have continued their businesses at the interim market after being forced out of the old location in Freedom Park, although many say revenues have been drastically cut


The supplemental MOA also increases Megawide’s total investment commitment for the project to P8 billion.Ā 

An important part of the supplemental MOA is Section 3.2b, which emphasizes that collection of rental fees in the public market shall remain with the LGU ā€œuntil amendment of the Market Code by the Sanggunian Panglungsod in accordance with Section 7.1 of the JVA.ā€ This was written because, in the original JVA, Megawide was in charge of collecting rental fees. This arrangement is unacceptable, critics argued, because, according to the Market Code, only the local government is allowed to collect and handle rental and other fees in the market.

The supplemental MOA also doesn’t mention anything about scrapping Annex D altogether.

Annex D of the original JVA includes a schedule of stall rental increases over the next few years

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PHOTO: Screenshot / JVA / Contributed
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Even if rental rates remain fixed for the foreseeable future, vendors say they’re already being shortchanged by the deal. For example, so-called ā€œentrance feesā€ā€”or a levy imposed on vendors on the merchandise they bring inside the market to sell—has increased. Vendors need to pay this ā€œentrance feeā€ on everything from cooking oil and eggs to fresh produce and rice.Ā 

ā€œNgayon lang yan, nung 2020,ā€ says Remedio. ā€œDati, yung isang banyera ng isda, which is mga 30 to 35 kilos bawat banyera, P20 lang (yung entrance fee) bawat banyera. Ngayon, per kilo na ang bayaran. Depende pa sa klase ng isda. Third class, kunyari matang baka, galunggong, P8 per kilo. Kung ang isang banyera ay 30 kilos, magiging P240 na siya.ā€Ā 

But Megawide says that the company is bound by the rules of the Market Code, which hasn’t been updated in years.

Lucena Obelza, Antonio Remedio, and Roland Laguna are all vendors at Carbon Market

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PHOTO: PJ Cana
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ā€œUntil the Market Code is amended by the city council, we have to abide by that,ā€ Eco says, meaning that the company cannot unilaterally increase rental rates.

Megawide, of course, is hoping that rental rates enshrined in the Market Code will be amended and adjusted based on present times.Ā 

ā€œWhen you compare the rates in Cebu to other LGUs, P8.50 is really a lot cheaper,ā€ Eco says. ā€œBut we can’t do anything until the Market Code is updated.ā€Ā 

Vendors vs. Megawide and Cebu City

On August 25, 2021, the different vendors associations under the Carbohanong Alyansa Alang sa Reporma ug Bahandianong Ogma sa mga Nanginabuhi (CARBON) filed suit against both Megawide and the local government of Cebu City seeking to declare the JVA null and void. The vendors’ group claim that, in addition to the JVA violating several laws, many stakeholders were left out in the entire redevelopment process.

The suit also alleges that, of the more than 6,000 vendors and enterprises operating in Carbon Market, Megawide is only allotting space for about 3,400, ā€œwhich means that many of the affected vendors will be deprived of their traditional livelihoods in the area.ā€

Vendors' groups have filed suit against Megawide and Cebu City to try and stop the Carbon Market redevelopment plan

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PHOTO: Jack Ponpon
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In addition, Carbohanong Alyansa claims that about 1,000 families living around the area will also be displaced and evicted from their homes.Ā 

The vendors’ group submitted their own proposal to the Cebu City government to redevelop Carbon Market. This alternative proposal doesn’t completely set aside the terms of the JVA between Megawide and Cebu City. Rather, the vendors recommend dividing the 78,000 square meter land area included in the JVA into roughly half. One area—measuring 36,900 square meters—will be developed by Megawide in accordance with the JVA. Meanwhile, the other half, measuring about 40,110 square meters, will not be included in the JVA and will instead be developed by the Cebu City government in partnership with the vendors cooperatives.

Carbohanong Alyansa's proposed redevelopment plan divides the 7.8 hectares into two zones. One area (in yellow) will remain part of the original JVA, while the other (in red) will be developed by the vendors' groups in partnership with the LGU

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PHOTO: Contributed / Carbohanong Alyansa
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Representatives from Carbohanong Alyansa say their proposal—which covers building new structures for vendors at Freedom Park, Warwick Barracks, and Units 1, 2, and 3—would only cost a total of P757 million. They say funding for this project will come from cooperative funds, loans from funding agencies and financial institutions like the Land Bank of the Philippines, and from Cebu City itself.Ā 

But for Megawide, it’s not as simple as ā€œbuilding a building.ā€

ā€œWhen you work on a project, it has to be an integrated master plan,ā€ Eco says. ā€œYou have to have an integrated system, integrated infrastructure, parks, a chapel, road right of way, a drainage system; you plan out the traffic with ample sidewalks. You have to consider power, water, an integrated cabling system, parking, loading and unloading sections, how to re-route traffic. All of that.

ā€œAnd that’s what we’re planning to do in Carbon Market,ā€ she adds.

A view of Carbon Market taken in late August 2022 showing progress of Megawide's construction of the new market

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PHOTO: PJ Cana
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Street view of construction in Carbon Market

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What does the Cebu City government have to say about the issues the vendors raised? I spoke with Cebu City Mayor Michael Rama during the sidelines of a restaurant opening at the NuStar Resort and Casino. He said there’s no question that the need to redevelop Carbon Market is long overdue and that Megawide has presented a solution that he believes will improve the situation.Ā 

Rama also said he understands where the vendors are coming from because he himself grew up and sold merchandise in the streets around Carbon Market.

ā€œI don’t want to be arguing because I know all of them,ā€ he said. ā€œEven me, from the 1960s pa, I’ve been embedded in Carbon. I was selling eggs, peddling them in Carbon Market. I would squat on the sidewalk. So I’m practically attached to Carbon.

ā€œI don’t want to be accusing (anybody),ā€ he added. ā€œAll I want to tell them is, while they have me as mayor, nobody will be left behind. And I’ve been telling Megawide: let’s look at this whole thing with that vision. That nobody is left behind.ā€

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