Cebu business moving forward despite oil shocks, EVAT concerns

Cebu’s business community continues to move forward despite the additional burden of the oil price shock and the expanded value added tax (EVAT), a local business chamber official said.

Jose Mari T. Bigornia, a board trustee of the Cebu Chamber of Commerce Inc. (CCCI) and president of Cebu Partners Committed to Environmental and Economic Management Foundation Inc. (PCEEM), said the business climate in Cebu remains conducive to key industries, among them tourism and information and communications technology (ICT).

"These are expected to carry the province of Cebu in the immediate future," he stressed.

Among the main drivers in the ICT sector are software development, cross-border IT businesses, call centers, and business development organizations.

The CCCI official likewise stressed the importance of infrastructure development in Cebu as key to achieving economic growth competitive with other regional players.

Cebu has been a recipient of several foreign-funded infrastructure projects such as land reclamation, highways and interior roads, bridges, power and utilities.

Cebu is also linked to the rest of the world through a state-of-the-art fiber optic submarine transmission line which remains underutilized due to the popularity of wireless technology.

"But wireless technology, although leading in communications today, will take the backseat when more requirements increase especially data and image transmission," Bigornia said.

He also cited the 6th Road Project funded by the Asian Development Bank (ADB) and the Japan Bank for International Cooperation (JBIC), administered by the Department of Public Works and Highways (DPWH).

The completion of the road has brought improvements in the local business environment and made an impact on the inter-municipality and inter-provincial economies. Even the local transport system has improved, both in the municipal and intra-provincial levels.

"There is faster movement of both people and agricultural and manufacturing products. Investments in the local transportation sector also increased," Bigornia said.

He pointed out that small and medium enterprises (SMEs) and businessmen in Cebu are "a value-added people," implying that increased intra-provincial trade allows for greater economic activities, some of which result in exports.

"We get products from the neighboring provinces such as Iloilo, Bohol or Negros, we repackage or raise it to commercial or international standards, and sell it in the domestic market or for export," Bigornia said.

A developed infrastructure is also seen to increase tourist arrivals, one of Cebu’s anchor industries. The new highway has resulted in reduced travel time from both the northern and sourthern Cebu tourism destinations as travel time has been reduced by half, making the towns in the extreme southern island such as Santandar and Oslob more accessible to the capital city of Cebu.