THE Cebu Chamber of Commerce and Industry (CCCI) cautioned local businesses to prepare for a more challenging 2026, saying Cebu must brace for a downturn scenario as multiple economic indicators point to weakening performance across tourism, exports and public spending.
In an assessment released as 2025 draws to a close, CCCI said the expected Gross National Product growth has slipped to 4.5 percent, about 26 percent lower than earlier projections of 5.5 percent, underscoring the need for “clear, evidence-based guidelines” to protect Cebu’s business community and households from worsening economic pressures.
5 pillars
CCCI framed its outlook around the five pillars of the Philippine economy — tourism, exports, IT-BPM services, overseas remittances and public spending — noting that four are showing signs of strain.
Tourism, a major driver of Cebu’s economy, is expected to contract by 25–30 percent this year amid falling arrivals and increasing competition from Vietnam, Thailand and Indonesia, which are capturing higher-value markets through better airports, safer transport systems and more predictable regulations.
The slump, CCCI said, is hurting airlines, hotels, island economies and thousands of small firms dependent on visitor spending, including Cebu’s push as a meeting, incentive, convention and exhibition destination.
Exports appear steady on paper but are undergoing a “strategic regression,” with manufacturing output declining while raw mineral shipments — gold, silver and copper — increase their share. CCCI warned that once manufacturing supply chains leave, “they seldom return,” posing long-term risks to Cebu’s furniture, electronics and shipbuilding sectors.
The IT-BPM industry remains relatively stable, though the chamber said generative artificial intelligence adoption overseas and rising incentives in India, Vietnam and Malaysia could weaken Cebu’s competitiveness unless digital infrastructure and workforce skills are upgraded.
Overseas remittances remain the country’s most reliable stabilizer, but CCCI noted these flows mask deeper structural problems, including the Philippines’ growing reliance on agricultural imports such as rice, now costing an estimated P300 billion annually. This dependence heightens inflation risks for a consumption-driven region like Cebu.
Public spending — considered the economy’s “fifth pillar” — is also under strain.
While the Philippines still carries relatively low debt compared with heavily indebted economies like Japan or the United States, CCCI said the country continues to suffer from weak execution in utilities, transport networks, schools, hospitals and logistics infrastructure.
Investor confidence
Policy reversals, redesigns and right-of-way issues impose what the chamber described as a “governance tax” that drags on investor confidence.
CCCI said reversing this trend requires acknowledging long-standing structural weaknesses and improving execution across all levels of government.
“The issue is not fiscal capacity but policy reliability,” the group said, calling on public and private institutions to work together to rebuild competitiveness.
Despite the bleak outlook, CCCI said Cebu and the wider Philippine economy still hold strong potential given the country’s natural resources and resilient population.
However, the group urged businesses to adopt a cautious stance as 2026 approaches, with contingency planning becoming “the most prudent way” to safeguard stability. / KOC