Sunday, December 30, 2012
THE Aquino Government’s economic reforms complemented by Cebu’s resiliency as a market has made 2012 a “very encouraging year” for Cebu’s local economy, business leaders said.
They identified tourism, information technology/business process outsourcing IT/BPO, real estate and retail as top industries this year.
Business leaders believe 2013 will be a better year and are looking forward to a faster growth with an election year ahead.
Cebu Chamber of Commerce and Industry (CCCI) president Prudencio Gesta said the robust economic activities seen in the past 12 months were a reflection of a “productive” year.” He, however, said exporters went through a tough time this year due to the continued global challenges.
“Cebu had a favorable growth in 2012,” said Gesta. He pointed to the robust construction activities, continued influx of foreign arrivals and strong domestic consumption fueled by young individuals that have high income.
Cebu Business Club (CBC) president Gordon Allan Joseph and Mandaue Chamber of Commerce and Industry (MCCI) president Philip Tan offered similar assessments.
Joseph said President Aquino’s initiatives, which focused on key issues like curbing corruption, had resulted in increased confidence on the country’s economy by local and foreign investors.
Solid ground
Tan said the country’s economy stood on solid ground with strong economic fundamentals despite global challenges.
The continued surge of overseas remittances complemented by benign inflation, high foreign exchange reserves and low interest rate have led Filipinos to invest in the economy rather than keep their money in banks.
Some 10,038 new businesses of single proprietorship were registered in Cebu as of November this year, according to records from the Department of Trade and Industry.
The region recorded 16,694 new businesses of single proprietorship in the same period.
He said improved perception of the Philippine economy following the strong economic growths in the past quarters and the high-performing stock market has made the country the preferred business destination in Asia.
The Philippines, according to economists, is the second best performing market in Asia behind Thailand. Its status was upgraded from being a “sick man of Asia” to an economy to watch out for the in the coming years.
Philippines is one of the Asian economies that posted “fast and stronger growths” on the back of the slow growth in major economies like US and Europe, economists said.
Favorable rating
The Aquino government is expecting the economy to grow between six and seven percent next year, with election seeing to increase domestic spending.
“Cebu and the Philippines will have a good year in 2013,” said Joseph.
“With the favorable rating of the Philippines, we expect more investments to come,” Gesta said.
He noted that Cebu is now getting inquiries as candidate for possible relocation destination of foreign companies based in China. He also sees a reviving manufacturing industry but he said the services sector will continue to lead economic growth.
“The trend will be sustained given the GDP growth, election spending, and high government spending on infrastructure projects,” he said.
Tan, meanwhile, said positive developments will continue to yield good results in 2013 but things will rest on how the government will create an enabling environment.
“The expansion of Mactan-Cebu International Airport Authority (MCIA) is already an enabling environment,” Tan said.
Reforms
He said economic reforms done in doing business is also an initial step in making Cebu and the country open to do business. Tan said the business permit collection in Mandaue has improved by 25 percent after it reduced the 17 steps of business permit processing to just five.
But more action should be done with the cooperation of both public and private sectors. “Investments from the private sector will follow right away as soon as the government puts in place right policies and right business environment,” said Tan.
For Cebu to take advantage of the continued growth in 2013, Joseph said it should address the problems that have long been raised in the past.
He cited infrastructure and sustainable roadmaps for industries as among the crucial issues that need urgent responses.
Joseph suggested that industry players and the government should come up with a sector roadmap that is similar to the IT-BPO industry for sectors like exports manufacturing, which is still suffering from lingering effects of the 2008 global financial crisis.
The local government should also prepare needed infrastructure like access to water and road, especially with the real estate boom, Tan said. He said Cebu’s traffic conditions should also be addressed as this might block business expansion.
Officials elected in 2013 will also play a crucial role in helping the country achieve its targets. Joseph said the only thing the private sector worries about is of politicians voted into power will put a stop on projects of their predecessors even if these are considered “good projects.”
He also said that on-going tension in Cebu’s local government units should end as these are “anti-development” and could undermine gains achieved in the past years.
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