Cebu ‘to grow faster’ in 2011

CEBU will have faster economic growth this year, business leaders said yesterday.

For local business leaders, the business process outsourcing (BPO) and tourism industries remain the top sectors that offer opportunities for Cebu’s business community.

Filipino-Cebuano Business Club Inc. (FCBI) president Rey Calooy sees brighter business opportunities this year and said Cebu will have a faster growth than any other city in the entire country.

Calooy based his projection on Cebu’s economic performance in 2010. He cited the proliferation of infrastructure projects, including the construction of high-rise buildings, and the growing traffic congestions as indicators of Cebu’s progress.

Business leaders, however, agree that a solution needs to be made to solve the growing traffic congestion.

Mass transport

Mandaue Chamber of Commerce and Industry president Eric Ng Mendoza said the time is ripe for Cebu to have a mass rapid transport system.

“We’ve grown to a phase that we don’t need any more jeepneys,” Mendoza explained.

Earlier, Cebu Chamber of Commerce and Industry president Samuel Chioson also lamentedthat traffic congestion hinders productivity and adds to the pollution.

Aside from BPO and tourism, he sees many opportunities in retirement and medical tourism for Cebu.

Chioson also said that the real estate sector will continue to give opportunities to the local business community.

Another opportunity Mendoza cited was in logistics distribution. He explained that with a lot of imports coming in, getting into a logistics distribution business is one business opportunity.

Calooy said among the businesses that would do well this year are retail, BPO, tourism-related enterprises, services business and transportation, with the rise of fuel prices.

A threat to Cebu’s growth that Mendoza hopes will be addressed is its water supply.

While he believes the lack of power is also a threat, he said steps have been made to assure that Cebu has stable power in the next few years.

“It is the water supply that has not moved,” he said.

For Chioson, it is the price of fuel.

He noted that the price of oil in the world market is rising and that it has reached close to $100 per barrel.

Chioson said that the high cost of fuel leads to a high cost of commodities and power, which he believes become threats to businesses.

Calooy, meanwhile, sees as challenges for local MSMEs this access to financing to enable business expansions, presence of red tape when applying for permits,productivity among employees and supply of skilled human resources.

While eco-tourism is one of the things being pushed for Cebu, Mendoza warned that this, too, could be a threat and that eco-tourism efforts have to be sustained.

He explained that when tourists come in, so do pollutants.

Environment

He said that so far, Cebu has done its share in addressing environmental concerns, but believes more should be done.

Another threat he cited is that of climate change, with the La Niña phenomenon expected to hit the country in the first quarter of the year.

He said that when more rains come, it threatens areas with poor drainage systems.

Mendoza also considers a threat the passage of a bill that seeks to imprison employers charged with illegal dismissal.

“This is going to discourage investment in our country if the bill is passed. We share strong opposition to this bill,” Mendoza said.

Calooy, meanwhile, said he sees increased consumer spending this year as a result of an improved market confidence. He also sees increased business spending with more support infrastructure in place and an improved government spending backed with the new administration’s fight against corruption.

Product innovation

Calooy also sees the need for continued product innovation or product development among MSMEs to become competitive with Asian neighbors.

Aside from the old engines of growth like tourism, BPO, and real estate/construction industries seen to still fuel growth Cebu’s economy this year, the government’s initiative for a strong public-private partnership (PPP) is also seen to be a major contributor to boost the local economy.

Cebu Business Club president Dondi Joseph said that this initiative, if properly implemented, would bring in opportunities for both the government and private sectors and would help attract potential investors to the country.

Joseph said that among the programs the business chambers of Cebu are currently working on with the local government is traffic management.

“This is just the beginning of a real urban planning for the entire Metro Cebu. We would like to see Cebu have a cohesive and seamless transportation,” Joseph said.

Published in the Sun.Star Cebu newspaper on January 04, 2011.