NEDA: Cebu infra failed to keep up with economy
Cebu's economic rise in recent years is no question. It has seen massive developments in key sectors, owing to investments coming in from both domestic and foreign investors.
But while Cebu continues to enjoy economic growth up to this year, its lack of infrastructure and the worsening traffic problem in the metropolitan area continue to hamper its most potential to become a liveable city and haven for investments.
There's not just much political will to address these pressing problems.
There are plenty of plans but the will to implement these plans and to get things done is where the problem actually lies.
'INFRA UNABLE TO KEEP UP WITH
GROWTH'
Efren Carreon, regional director of the National Economic and Development Authority in Central Visayas, said Cebu's infrastructure has not been able to keep up with its continued economic growth.
As a result, he said Cebu has experienced a worsening traffic problem in its metropolitan area plus the flooding problem.
"The economy continues to grow but infrastructure – the traffic – remains an economic problem," the official said in an interview.
He said one of the solutions seen to solve the traffic woes is the P50billion Metro Cebu Expressway, which will start construction next year.
The project spans 74 kilometers from Naga City in the south to Danao City in the north and is targeted to be completed before the term of President Duterte ends in 2022.
Carreon said a mass transit system should also be implemented in Metro Cebu as this is deemed an effective solution to the traffic problem.
Various proposals to build a mass transport in Cebu have been publicized but so far no concrete plans have been able to take off.
Overall, he said that while infrastructure bottlenecks and the traffic continue to challenge Cebu's economic potential this year, indicators showed that the economy of Central Visayas, where Cebu is a major player and contributor, has continued to expand this year.
ECONOMIC DRIVERS
Carreon said the region's main economic drivers remained robust this year while sectors such as exports and agriculture, which were lagging in previous years, posted gains in 2017.
Central Visayas' export sales in the first semester of 2017 rose by 30.2 percent.
Electronic products remain the region's top export product but it has also diversified to non-electronic goods including woodcraft furniture, processed food and beverages.
"This is good especially for the raw material producers in the region and nearby regions," he said.
Agricultural production in the region also grew by 8.7 percent, with crops leading at 10.9 percent growth. Unfortunately, the fishery sector went down by 7.8 percent due to slowdown in seaweeds production.
The region's tourism industry also remained resilient despite the occurrence of negative events during the first half of the year such as the terror attacks in Bohol.
He said these incidents did not affect the tourism sector's performance as tourists especially from Asian countries continued to travel to the region despite the negative travel advisories issued by some countries. Foreign visitor arrivals increased 11.2 percent.
Construction activities also were upbeat as many government and private sector projects went full-swing.
The construction sector continued to benefit from the bullish outlook of investors on the region's tourism, IT-BPO (information technologybusiness process outsourcing) and retail industries.
In the first half of 2017, the region recorded a 31.7 percent and 24.4 percent increase in volume and value of new non-residential projects, respectively. "This would indicate higher demand for commercial and business spaces," NEDA's Carreon said.
Increased state spending on infrastructure projects also contributed to the construction sector's growth.
Two of the governmentsupported biggest infrastructure projects the Mactan-Cebu International Airport Terminal 2 and the new Bohol Airport in Panglao are in full swing and are due for completion in middle of 2018.
"These two infrastructure projects are expected to boost the travel industry and would have a positive impact on the tourism and allied industries," he said. "Even with the existing infrastructure, domestic flights increased by 15.3 percent, while international flights increased by 39.4 percent in the first semester of 2017. This resulted to a 39.5 percent increase in international passengers for the same period."
The sustained growth of the regional economy had a positive impact on employment. In the first semester, the region recorded a 95 percent employment rate, which was higher than the national average of 93.8 percent.
Under the Regional Development Plan, employment target is between 95.2-95.5%.
OUTLOOK FOR 2018
Carreon said the Central Visayas economy is expected to remain strong in 2018 and onwards.
The tourism industry along with other economic drivers of the region such as IT-BPO, retail trade and construction industries will propel the growth of the regional economy next year.
The region's tourism sector is poised to accelerate its growth momentum with the opening of MCIA's Terminal 2 and new Panglao Airport in Bohol next year.
"International flights are expected to increase with these new facilities that would result to increase visitor arrivals and bigger tourism expenditures. This would generate multiplier effects in the local economy," he said.
The IT-BPO industry will also remain a strong economic driver as Cebu and Negros Oriental continue to attract investments.
The shift of the industry focus to higher value-added types of services is expected to persist considering that this is the general trend observed in the Philippine outsourcing sector.
The region also looks forward to the entry of the first major IT-BPO investment in Bohol after the Department of Information and Communications Technology singed a commitment to support the province's bid to become an IT-BPO investment haven during the 5th Visayas ICT Organization Conference held in Bohol.
As in previous years, the retail trade industry will benefit from increased consumer spending. This increase in spending capacity of the working class will be enhanced with the implementation of the tax reform law.
Some retailers have started to expand not only in the urban areas but also in the countryside, he said.
The sustained growth of the region's tourism, IT-BPO, retail trade and real estate industries will continue to create impetus for the region's construction sector to grow.
In 2016, for instance, the construction sector was the biggest contributor to the regional economic growth.
The sector will further be boosted by the implementation of the administration's Build, Build, Build program. This would have very positive impact on employment and demand for construction materials.
Carreon noted the export and agriculture industries, which have been performing dismally in recent years, are also expected to turn in a positive performance.
"With the increase of non-electronic products in the region's exports, specifically furniture and processed food and beverages, it is expected that this will create higher demand for local raw materials which are good for local producers," he said.
Overall, he said NEDA sees a sustained economic growth for the region next year, with prospects for the various economic sectors remain bullish.