DAVAO CITY - Over breakfast of sticky rice cakes, President Rodrigo Duterte and Japanese Prime Minister Shinzo Abe reinforced their key alliance here earlier this year, at the same time solidifying this southern city's status as the country's new power center.

Foreign leaders, big businessmen and politicians make a beeline to Davao City, every time its former mayor, Duterte, governs the country from Mindanao. This has helped spur the local economy.

"Nakikita na yung Davao not just a periphery city before, marginalized city, but now an important city. Nagjo-joke nga na ito ang new capital of the Philippines dahil laging nandito yung Presidente," said Ateneo de Davao University Political Science professor Ramon Beleno III.

(Davao is now seen as an important city, not just a periphery or a marginalized city. It's jokingly referred to as the new capital of the Philippines because the President is always here.)

Davao has been billed as a showcase of how Duterte's tough leadership style can restore peace and order and spur economic growth.

The President is also replicating on a national scale policies he started in Davao, including a ban on smoking in public places and limiting the use of fireworks in public squares.

"President Rody himself has become our number one endorser. Most of the conferences, meetings were held here. And for that we are very grateful," said city tourism officer Generose Tecson.

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Tourist arrivals in the first quarter reached 459,104, up 13 percent from the same period last year, she said. The number of business establishments in the city grew 6 percent to 36,441 from 34,324 during the same period, official data showed.

The unemployment rate in the Davao Region fell to 4.9 percent from 5.3 percent, data showed.

The Davao City government has been deluged with inquiries from potential investors since Duterte assumed as president, said its investment and promotions head, Lemuel Ortonio.

"We hope that this increased interest will eventually translate into actual investments in the city. We hope those companies who have conducted due diligence within the course of the year will finally decide to put up their businesses in the city," he said.

The city's mayor and the President's daughter, Sara Duterte-Carpio, underscored the need to tighten security in the city as it receives more visitors.

"I am happy for Davao City, challenged because we know the limitations of the resources of the local government, and apprehensive because pag maraming tao, mas nagiging heightened ang security at critical ang peace and order," she said.

The city is building new infrastructure to keep up and project approvals are expected to proceed faster, said Maria Lourdes Lim, regional director of the National Economic Development Authority.

"We are seeing the rebalancing towards countryside development. These projects, once realized, will be the fulfillment of that commitment," she said.

The first phase of the construction, which will run until 2025, includes the first ever Mindanao railway, the Davao Expressway, and improvements to Sasa Wharf and the city's international airport.

The first phase of the Mindanao Railway will connect Tagum to Digos, cutting travel time between the two cities to roughly 2 hours.

Two projects aimed at easing traffic jams in Davao City have also started, including a bypass road that will feature the country's longest tunnel.

The city has not been without challenges. In September 2016, Maute extremists bombed a busy night market killing over a dozen people.

Security was tightened further this month due to fighting in Marawi City.

Managing a growing metropolis could also pose problems, said Beleno.

"So kung nandito ang presidente dumadami ang tao dito, nagiging overpopulated na yung Davao. So the problems on traffic, environmental problems, yung sa waste. Parang yung problema ng Manila, nakukuha na rin natin," he said.

(When the President is here, people follow, Davao becomes overpopulated. There are problems on traffic and waste. We get the same problems as those in Manila.)