OFW remittances, BPOs sustain Cebu economy

By Ehda M. Dagooc Updated April 25, 2009 12:00 AM

CEBU, Philippines - The steady flow of remittances from the Overseas Filipino Workers has helped buoy business opportunities in Cebu amid the global financial meltdown.

The remittances as well as the high paying jobs offered by the Business process Outsourcing companies helped Cebu, which is the center for trade and commerce in the Visayas, sustain a vibrant economy.

Economist Ramon M. Quesada cited top progressive industries that offer good business prospects for entrepreneurs, which include agribusiness (corn), banking, BPO, education, entertainment, franchising, personal care, IT, local tourism, sports, health, infrastructure/utilities, telecoms, transportation, among others.

Consumers across social brackets are spending more in personal care, specially those consumers who are in the lower brackets. This has made some personal care companies thrive amid the financial difficulties.

Quesada mentioned that based on a report from the National Statistics Office (NSO), lower income consumers such as those who are earning from P100 thousand a year to P249 thousand and below are spending more on personal care rather than on medical expenses.

Ironically, he said personal care and other cosmetic products are still one of the promising business opportunity in the Philippines, specifically down the Southern part of the country, as consumers are not letting go of their “vanity” needs, despite the crisis.

Quesada said the upper A and B markets pay strong attention for medical concerns, such as buying wellness and medicinal products, rather than spending more on personal care.

“The A-B market are not too vain to take care of their looks, they are into health and wellness [or prevention],” Quesada said adding that percentage of the A-B market spending more on car and real estate.

In Cebu for instance, an average of P373 billion annually is spent by the consumers to different categories including basic necessities such as food, housing, transport, communication, light and water.

Of the P373 billion consumer expenditure in Cebu, 40 percent of this is spent by the A-B market, those that are earning P250 thousand a year and above.

Surprisingly, the A-B markets, and the C-D and E are closely at the same level in terms of spending on personal care. This means, that even the cash-trapped consumers are still buying beauty and cosmetic products, Quesada said.

Apparel spending of average income earners is also at the same level with the A-B market. Monthly salary-dependent individual for instance, is still buying apparel products, during hard times, he said.

Generally, he said consumer spending in the Visayas is still in a dynamic mode, thus retail industry here still managed to post good sales figures.