AFTER completing her bachelor’s degree in Psychology in Cagayan de Oro, Chrislyn Mae Cabusog decided to pack her bags and start her career in Cebu.
She now works as a talent acquisition associate for a business process outsourcing company operating at the Cebu IT Park.
Like Chrislyn, there are many non-Cebuanos who have chosen to work in Cebu. This does not surprise many since Cebu has long been considered the center for commerce in the Southern Philippines.
Forecasts
In recent years, this became more pronounced, as streets became busier and tall buildings have been sprouting, changing Cebu’s skyline. Prospects for the coming years, especially for 2016, remain bright.
“There’s no reason of slowing down of Cebu’s economy next year,” said economist Perry Fajardo, who is an economics professor at the University of San Carlos and the executive director of the Cebu Business Club. The Cebu Chamber of Commerce and Industry has the same view.
The industry and services sector remain strong, Fajardo said, which will prompt more economic activities here.
National Econmic and Development Authority 7 Director Efren Carreon said Central Visayas is targeted to “grow more” in 2016, perhaps even higher than nine percent in terms of the region’s gross domestic product, especially with the boost it will gain from hosting the International Eucharistic Celebration (IEC).
Cebu will open the year 2016 hosting one of the biggest events in the Catholic Church—the International Eucharistic Congress, which will happen right after the annual Sinulog Festival, another annual crowd-drawer in Cebu.
Official delegates attending the IEC is estimated to be around 15,000 and one million expected visitors from all parts of the country.
The tourism and the transportation sectors will highly benefit from the event.
In addition, the local economy will be fueled by election-related spending in preparation for the May 2016 national elections, said Carreon.
CCCI president Ma. Teresa Chan, on the other hand, said Cebu’s economy will be driven by domestic consumption, manufacturing, and the services sectors.
Bans on projects
For some, 2016 will be a year for transition.
With the impending May 2016 elections, some business leaders expect the postponement of infrastructure projects that may derail economic growth.
Cebu Business Club president Gordon Alan Joseph predicts that in the next seven months, “nothing big” is going to happen for the country, especially in infrastructure development.
“It would probably be stagnant,” he said, referring to the economic activities which will be affected due to elections. “There would be no new projects to be implemented next year.”
While consumer spending would increase, Joseph said the country might lose out on important big-ticket.
“Sure, there will be high consumer spending next year, but this will not do anything for the economy. It is just temporary and non-productive spending. What is important are the fundamentals—infrastructure development,” he said.
On May 9, 2016 the Philippines will elect a new president and a new brand of leadership.
The Commission on Elections (Comelec) has exempted, though, the public-private partnership (PPP) projects from the upcoming election ban on public works. Under the Omnibus Election Code public officials are prohibited from releasing public funds 45 days before a regular election. It also prohibits construction of public works “to prevent the misuse of public funds by public officials...for purposes of campaigning.”
The ban on “release, disbursement or expenditures of public funds” and on “construction of public works, delivery of materials for public works” runs from March 25 to May 8, according to Comelec Resolution No. 9981.
According to Joseph, elections normally create an atmosphere of uncertainty and a wait-and-see attitude among investors, but he stressed that the private sector would remain bullish provided the campaign on better governance and infra-development-centric leadership would continue.
In assessing Cebu’s growth, Joseph said Cebu’s economy is continuously booming. However, its growth was not properly managed.
He said the chronic traffic congestion that Cebu is experiencing, for instance, is a sign of a quantitative growth rather than a qualitative growth, which each province should target. “There is a need to review our checklist. Statistics don’t represent the entire story,” said Joseph, referring to factors like livability, ease of doing business, and safety and security.
Business leaders worry that the worsening traffic in Metro Cebu that is affecting Cebu’s liveability and hurting the business sector, as well. Due to the heavy traffic, businesses incurred increased operational costs, delays, and cancellation of orders.
Headwinds
Another challenge for the economy is the continuing El Niño, which will likely raise food prices and affect water supply. The agriculture sector will be the most affected, which performed negatively in 2014 and 2015, although there were recoveries noted this year (2015).
Department of Agriculture Regional Technical Director Joel Elumba said the dry spell could extend up to the first semester of 2016.
The slackening demand in the advanced economies is also viewed to take a toll on the local economy, said Mandaue Chamber of Commerce and Industry (MCCI) president Donato Busa.
However, Socio-economic Planning Secretary Arsenio Balisacan, in his 2016 outlook report delivered in December, noted that there will be recovery seen in advanced economies. The National Government retains its seven percent national GDP growth target in 2016.
“Together with the recovery of advanced economies expected next year and of the global economy in the medium-term, economic growth can accelerate to a level that can bring us to higher middle-income economy status by the end of the next administration,” Balisacan said.
The Asian Development Bank (ADB) also forecasted a 6.3 percent GDP growth for the Philippines in 2016.
“Private consumption and investment are expected to maintain solid growth in 2016,” ADB said in a country report published in its website.
Economist Bernardo Villegas projected that the country’s economic growth will continue at six to seven percent in the next 20 years regardless of who gets elected this year.
He, however, advised Filipinos to elect the leader whose priority platform is infrastructure development.
“We need someone who is good at executing things. We need someone who will unleash all the public-private partnership (PPP) and government projects. Because if all of these infrastructure projects will be implemented, we can grow by eight to 10 percent from 2016 onwards,” said Villegas, noting that there are still billions of infrastructure projects that haven’t been realized under the present administration.
Retailer Melanie Ng, said growth momentum experienced in 2015 will continue this year, especially if the country continues to bank on its economic gains.
“With continued development on infrastructure and improved manpower, investments to the country will rise and more of these (investments) will continue to come to Cebu,” said Ng.
Ng also emphasized that business confidence will remain robust should proper transition of leadership will be implemented.
“2016 will be both crucial for this present and new administration because people want this positive growth to continue and sustain,” she said. “We are already in the right place. Let’s continue to support the new leadership,” Ng added.
As the political scene adds an air of uncertainty, local business leaders believe that Cebu’s growth will continue regardless of the results because the economic fundamentals for growth are already in place.
Chan, for her part, commended the works of the Aquino administration, believing that the “Daang Matuwid” thrust should also be replicated by the next administration, whoever wins.
CCCI maintained that it will support the advocacies of the next administration, regardless of the personalities behind local and national politics.
For a worker like Chrislyn, Cebu is an exciting place to grow her career.
“I can really see growth and potential in achieving my goals living here in Cebu. I see it as a blank canvass and I’m very excited to paint it as colorful as I can,” she said. During her free time, exploring coffee shops and restaurants are her top interests.
“Here, I have the opportunity to do that for the countless choices which Cebu can offer,” the 25-year-old said.