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Economy of Cebu is called ‘recession-proof’

By MALOU M. MOZO

[ Manila Bulletin Online ] December 13, 2008


Findings of survey conducted by int’l service firm bared


CEBU CITY – The economy of Cebu is considered "recession proof" and market resilient amid the global financial crisis, findings of a survey conducted by CB Richard Ellis Group Inc. (CBRE) showed.


In an economic briefing hosted by CBRE-Philippines, the company presented a rosy picture of Cebu’s economic developments starting next year.


Growth will focus on outsourcing and offshoring services and tourism, the survey findings stated.


CBRE-Philippines Chairman Rick Santos said Cebuanos will expect next year more opportunities for employment and other money-making activities.


"As companies’ revenues are under pressure, multinationals (firms) look to save costs and move offshore to the Philippines as it’s easier to save a dollar than make a dollar. Moving them to multiple outsourcing destinations, and looking beyond to find lower labor costs and land values, make the outlook good for Cebu City," Santos said.


People come to the Philippines because of political stability, and Cebu is the most stable, he said.


Santos said that following the Mumbai attacks, more business process outsourcing firms (BPO) in India are inclined to set up secondary operations and back-up mirror sites in the Philippines, especially Cebu.


"Recently, the bulk of demand for new office spaces came from the Cebu-based operations of multinational companies, call centers, and BPOs which are expanding to Cebu, and foreign IT companies who have made Cebu their base for their Philippine operations," said Joey Radovan, CBRE-Philiipines vice chairman.


Santos said the amount of revenues and the number of jobs that will be generated by the outsourcing companies in Cebu will benefit the entire economic spectrum in the province and will trickle down to boost various sectors such as retail, domestic tourism, services, transportation, telecommunication, and education.


Santos also noted the recent political turmoil in Thailand could technically favor Cebu’s tourism industry. Thailand, considered as one of the top tourist attractions in Southeast Asia, is now losing thousands of tourists, who are now considering Cebu as an alternative leisure destination in the region.


In tourism, CBRE is confident that Cebu will post double-digit growth next year, while other destinations are projecting slowdown in arrivals.


"The current slowdown in global tourist travel as a result of the worldwide economic recession had been acknowledged by market commentators, but it’s tough to spot evidence of a slowdown in Cebu," said company general manager Trent Frankum.


"The city is well positioned for growth with hotels at maximum capacity, and the right infrastructure in place," Frankum said.


Cebu, dubbed recently by the American Chamber of Commerce and Industry as the "Best BPO and lifestyle destination in the world," will see a turnaround in economic growth, while other countries and cities in the world will struggle and cope with the global recession, Santos said.

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