CEBU: A YEAR OF ROBUST GROWTH

Duterte Year one

Amid an uneasy year in politics, a controversial war on drugs and the Abu Sayyaf terror group attempting to gain foothold in Central Visayas through Bohol, the region’s economy — Cebu in particular — during the first year of the Duterte administration remains unscathed and has even managed to pull ahead.

But while it is easy to attribute the growth to the economic policies of President Rodrigo Duterte’s government, business leaders in Cebu said the accomplishment is not entirely attributable to his administration.

Nonetheless, one year into the term of President Duterte, local business leaders agreed they had seen improvements in the economy of Cebu and were confident of more positive developments in the future.

For Mandaue Chamber of Commerce and Industry (MCCI) President Glenn Soco, there had been stability and growth in business in Cebu for the past year.

“There are more investors coming in as we remain to be a top business and tourism destination in Asia,” he told Cebu Daily News.

The challenge now, he added, was to make this growth sustainable by making Cebu more livable and competitive.

Soco pointed out the need to put in the right infrastructure and to look at the holistic aspect of development, which would include land use, water supply, solid waste management and environmental protection.

“As more programs to boost the economy are rolled out by the current administration, the local economy will greatly benefit,” said Melanie Ng, president of the Cebu Chamber of Commerce and Industry (CCCI).

She added that it was good to note that a lot of focus has been placed on micro, small and medium enterprise (MSME) development and capacity building in the areas of innovation as well as science and technology.

With the plans and programs of the Duterte administration to spur infrastructure and investment opportunities, the economy will definitely become even more robust, she said.

Cebu Business Club President Gordon Alan Joseph, meanwhile, said he looked forward to the fast approval and implementation of various infrastructure projects that have been mentioned in the past.

These include the rail project, the north coast road, circumferential road, and storm water management projects identified in a master study completed by the Japan International Cooperation Agency (Jica) in 2015.

“Aside from these, changes due to any martial policy are not yet apparent,” he said.

Fast growth rate

The economy of Central Visayas remains as one of the fastest growing in the country, ending 2016 with a P525-billion gross regional domestic product (GRDP), which translates to a growth rate of 8.8 percent.

Considering how the Philippines had already been under the leadership of Mr. Duterte in the last six months of that year, one might surmise that this economic expansion can be attributed to his administration.

But other local leaders say it was hard to tell and that one year was not enough for substantial changes to take place.

Nonetheless, Cebu, which makes up a huge chunk of the region’s economy, had its fair share of ups during President Duterte’s first 12 months in office.

“The Central Visayas economy experienced growth momentum for the last plan period 2011–2016 because our GRDP average growth rate was 7.5 percent, the highest among all regions and even higher than the NCR (National Capital Region,” said Efren Carreon, director of the National

Economic and Development Authority in Central Visayas (Neda-7).

He said the 8.8 percent growth in 2016 was a result of that momentum combined with strong business confidence and growth in public administration.

Central Visayas registered the fourth fastest economic growth in the country after Eastern Visayas (12.4 percent), Central Luzon (9.5 percent) and Davao Region (9.4 percent).

“For starters, changes in the economy do not happen in a year, especially if there are national policies in scope,” said Robert Go, president of the Philippine Retailers Association in Cebu.

Real estate boom

Nonetheless, he said much of Cebu’s growth was driven by homegrown developers building residential projects and leasable office spaces. Go added that the local business process outsourcing (BPO) sector continues to expand due to availability of locations in the metropolitan.

However, he said that while the influx of investments in the BPO sector remains, investors have become more conscious due to the tirades of President Duterte against the US as well as the general peace and order situation in the Philippines.

Go said the country’s image has been marred by issues such as the administration’s war on illegal drugs and terrorist activities in Mindanao, which also affect investor sentiments on investment destinations such as Cebu.

But investments into Cebu continued to pour in despite these challenges.

Between the second half of 2016 and the first quarter of 2017, or Duterte’s first nine months in office, the Board of Investments (BOI) in Cebu approved 16 projects worth P5.4 billion, generating 2,314 jobs.

These were mostly real estate investments in Cebu City, Lapu-Lapu City, Talisay City, Carcar City, Minglanilla, Liloan, and even Tagbilaran City in Bohol. There were also three renewable energy projects in Cebu City registered during the period.

Tourist influx

Cebu also saw gains in the tourism industry in 2016, and while there are no official data for the first half of 2017 yet, sources say arrivals have been strong despite security issues the country has been facing since the start of the year.

Latest data from the Department of Tourism in Central Visayas (DOT-7) showed that the region welcomed 5.95 million tourists from January to December 2016, up by 29.17 percent from 4.6 million during the same period in 2015.

Of the 5.9 million tourists in 2016, 2.3 million were foreign travelers while 3.62 million were domestic visitors. Data were gathered from accommodation establishments across the region.

The region’s top markets based on visitor volume are Korea (842,985), Japan (369,860), China (244,925), USA (201,222) and Australia (63,627).

Cebu continues to lead tourism activities in the region, welcoming 4.17 million visitors last year, up by 25.63 percent from 3.32 million in 2015.

Of this figure, 2.28 million were domestic visitors while 1.88 million were foreign tourists.

The province and region have similar top markets except that in Cebu, the US stood at third while China was at fourth place, bringing 108,769 visitors in 2016, up by 83.67 percent from 59,220 in 2015.

The increase in the number of Chinese visitors in Cebu and the rest of the region is noteworthy as it comes at the heels of President Duterte’s visit to China late last year, bringing with him not only investment pledges but also potential tourists.

China pivot

DOT-7 Officer-in-charge Judy Gabato said that the expansion of the Chinese market can be linked to President Duterte’s decision to pivot to China last year.

Tourism Secretary Wanda Teo earlier signed a memorandum of understanding with the China National Tourism Administration for tourism cooperation for the period 2017 to 2022, she added.

“The two state agencies will also collaborate on measures to guarantee quality assurance of tourism destinations, products and services,” said Gabato.

The Chinese government promised to bring 2 million tourists to the Philippines this year.

Gabato said that what has to be done now is to put resources where they are needed such as in infrastructure support for airports and seaports, and enhancing the quality of the region’s products and services.

Several Chinese business groups recently expressed interest to invest in Cebu, particularly in Cebu City and Talisay City, for residential developments and commercial establishments.

This was also the result of President Duterte’s campaign to draw more Chinese investors to the country.

New businesses

The Department of Trade and Industry (DTI) also saw an indication of rising economic activity in Cebu as more businesses were registered in the province during the first quarter of 2017.

Data from the DTI in Cebu showed that business registration in the province during the first three months of the year totaled 4,781, up by 22 percent from 3,919 in the same period of 2016.

Business name registration was also up by 4.5 percent to 15,588 in 2016 from 14,920 in 2015.

Zaide Bation, DTI–Cebu consumer welfare division chief, earlier said that this increase could be attributed to the establishment of Negosyo Centers in various municipalities and cities in the province.

The Duterte administration earlier called for inclusive growth, thereby coming up with programs to empower MSMEs, a sector that serves as the backbone of the country’s economy.

Last year, under the leadership of Trade Secretary Ramon Lopez, the DTI launched the Kapatid Mentor Me program in Cebu, which has so far produced more than 50 graduates from two batches.