CEBU, Philippines - The strong business process outsourcing (BPO) sector and sustained OFW (overseas Filipino workers) continue to propel Cebu's retail industry, Colliers Philippines said.
"Cebu remains a major retail hub outside of Metro Manila due to the proliferation of outsourcing companies; continued deployment of Filipino workers abroad whose monthly remittances fuel household spending; influx of local and foreign tourists; as well as sustained generation of employment opportunities in major economic sectors such as construction, manufacturing, and export processing," the property consultancy firm said in a report released yesterday.
Overall, Colliers has observed that despite the substantial increase in retail stock since 2008, overall vacancy remains low as the additional supply is offset by a continuously expanding local economy which effectively boosts Cebuanos’ disposable incomes.
"BPO operations in Cebu City are continuously growing. The projected 5 percent - 10 percent annual growth of Cebu’s outsourcing workforce should support the expansion of the city’s consumer base," it said in the report.
Complementing the retail sector’s growth is the establishment of more knowledge process outsourcing (KPO) firms in the city that provide higher value outsourcing services such as health information management, software engineering, and finance and accounting.
Among the major KPO firms currently operating in Cebu are Accenture, FPT Software, Cardno Engineering, Google, JP Morgan, Fluor Daniel, Medcor, and Dash Engineering.
The influx of these companies boosted the share of KPO employees to Cebu’s outsourcing workforce to nearly 30 percent in 2015 from a mere 10 percent in 2008.
“We are optimistic that Cebu will continue to attract more KPO companies given the presence of adequate infrastructure, redundant internet connection, ample supply of skilled college graduates, and a high level of urbanization driven by the development of several townships and public infrastructure projects,” said Gerard Padriga, general manager at Colliers' Cebu office.
According to Philippine Statistics Authority (PSA), the Central Visayas region accounts for about 5 percent of the total OFWs deployed per annum.
Colliers believes that the sustained remittances will continue to fuel retail spending in Cebu City and its environs.
More households in Cebu will continue to benefit from higher remittances as an increasing number of Cebuanos are being deployed overseas. The Philippine Overseas Employment Administration (POEA) projects total deployment to rise by at least 5 percent annually over the next five years, driven by continued global demand for highly-skilled Filipino workers.
The robust retail sector in Cebu is also being sustained by the influx of both foreign and domestic tourists. From January to November of 2016, Cebu attracted some 3.46 million domestic and foreign tourists, up 12 percent year-on-year, making it the most visited destination in the Philippines.
This will be supported by the completion of Mactan-Cebu International Airport’s (MCIA) new terminal which will have a capacity of 12.5 million tourists per annum, almost triple the old facility’s original capacity of 4.5 million.
The proposed US$300-million Lapu-Lapu Leisure Mactan integrated resort and casino by Udenna Corp. will feature a high-end retail complex that should attract high-spending domestic and foreign tourists.
Manufacturing and export firms located inside Mactan Export Processing Zone have also been instrumental in propelling Cebu’s retail base.
The influx of investors from China, Japan, and other Asian economies has sustained the growth of employment opportunities in Cebu which drives spending among nearly 3 million households, Colliers said. (FREEMAN)