BET­TER TIMES AHEAD

Cebu Daily News - - FRONT PAGE - by Jose Santino S. Bu­na­chita RE­PORTER

Af­ter a roller coaster year high­lighted by a cou­ple of eco­nomic shocks, Cebu and the rest of Cen­tral Visayas can look for­ward to

a bet­ter econ­omy in the re­gion in 2019.

Prices of ba­sic com­modi­ties will con­tinue to nor­mal­ize while fuel prices have been go­ing down for the past sev­eral weeks, noted Efren Carreon, re­gional di­rec­tor of the Na­tional Eco­nomic and De­vel­op­ment Author­ity in Cen­tral Visayas (Neda-7).

Along with this, work­ers who earn less than P250,000 a year will con­tinue to en­joy not hav­ing to pay an in­come tax, which started this year with the im­ple­men­ta­tion of the Tax Re­form for Ac­cel­er­a­tion and In­clu­sion (Train) law.

“The bot­tom line is you can im­prove your well-be­ing. If more re­mains from your in­come, be­cause of the cheaper com­modi­ties and less taxes, you can pro­vide bet­ter for your fam­i­lies and children. You can af­ford to buy things you could not buy be­fore,” he said.

Since the im­ple­men­ta­tion of the Train law last Jan­uary, ma­jor­ity of work­ers brought home higher pay.

How­ever, this was not felt by the work­ing class be­cause in the months that fol­lowed, the coun­try had reg­is­tered record-high lev­els of in­fla­tion. The work­ers’ ex­tra take home pay just cov­ered for the higher cost of ba­sic com­modi­ties.

Ac­cord­ing to Neda-7, in­fla­tion in the re­gion peaked at 7 per­cent last Septem­ber.

It then started to go down to 6.6 per­cent in Oc­to­ber and fur­ther dropped to 6 per­cent in Novem­ber.

Carreon said they ex­pected the in­fla­tion to still go down in De­cem­ber, which will be re­vealed by the Philip­pine Statis­tics Author­ity (PSA) on the first week of Jan­uary 2019.

“With the slow­ing down of the in­fla­tion rate, we ex­pect prices of com­modi­ties to go down fur­ther in 2019. We ex­pect that this will be within the govern­ment tar­get of 2 to 4 per­cent,” he said.

But even with the soar­ing prices of ba­sic com­modi­ties this year, Carreon noted that eco­nomic ac­tiv­i­ties were still aplenty.

“We still saw a re­silient re­gional econ­omy. Busi­nesses are still brisk. If you look around, con­struc­tion ac­tiv­ity is still very much on­go­ing. If you go to the mall, you see lots of peo­ple lining up, peo­ple are still go­ing to restau­rants,” he said.

In­dus­try win­ners

Other eco­nomic driv­ers are seen to pro­pel the re­gion’s econ­omy in 2019.

Tourism, real es­tate, and the IT-BPM (in­for­ma­tion tech­nol­ogy and busi­ness process man­age­ment) sec­tors show no signs of slow­ing down.

Carreon said that based on their third quar­ter as­sess­ment for 2018, there are dou­ble digit growth in terms of ar­rivals for both do­mes­tic and in­ter­na­tional pas­sen­gers com­pared to the same pe­riod last year.

De­part­ment of Tourism in Cen­tral Visayas (DOT-7) Re­gional Di­rec­tor Shal­i­mar Ta­mano said the open­ing of the Mac­tan-Cebu In­ter­na­tional Air­port (MCIA) Ter­mi­nal 2 last July and the Bo­hol Panglao In­ter­na­tional Air­port (BPIA) last month are “game chang­ers” for the re­gion’s tourism in­dus­try.

“The open­ing of these two air­ports were the big­gest news for the tourism sec­tor in 2018. There have been no ma­jor in­ci­dents on se­cu­rity and safety and there are more flights (from) abroad,” he said.

One of the things to look for­ward to in 2019 is the ar­rival of more Chi­nese tourists.

Ac­cord­ing to Ta­mano, they ex­pect the num­ber of Chi­nese tourists who vis­ited the re­gion in 2018 to breach the 500,000 mark. And it will only get higher in the com­ing year.

China has been the fastest grow­ing tourist mar­ket for the re­gion in the past two years.

From only 244,925 ar­rivals in 2016, the num­ber of Chi­nese tourists who vis­ited Cen­tral Visayas in 2017 al­most dou­bled to 429,306, mak­ing them the sec­ond big­gest tourist mar­ket for the re­gion, next to the South Kore­ans. They have also over­taken Ja­pan, which is now in third place.

More flights from Cebu to dif­fer­ent cities in main­land China were opened this year. An­other one is open­ing by Jan­uary 2019.

Ta­mano said China South­ern Air­lines will have its in­au­gu­ral Cebu-Guangzhou flight on Jan­uary 22, af­ter which there will be a reg­u­lar thrice a week flights be­tween these two des­ti­na­tions.

Records from the MCIA showed there were 1.4 mil­lion for­eign tourist ar­rivals in Cebu from Jan­uary to Septem­ber this year, which was a 22.76 per­cent in­crease from the 1.15 mil­lion ar­rival record over the same pe­riod in 2017.

On the other hand, do­mes­tic pas­sen­ger ar­rivals at MCIA also rose by 7.61 per­cent – from 2.6 mil­lion in 2017 to 2.8 mil­lion this year, on the same Jan­uary-toSeptem­ber pe­riod.

Aside from the steady in­flux of tourists, more peo­ple from the tourism, travel and air­line in­dus­tries are also ex­pected to visit Cebu in 2019, as Cebu is set to host a cou­ple of big-ticket in­ter­na­tional events.

Cebu will host the Routes Asia 2019, one of the big­gest avi­a­tion and route de­vel­op­ment event in Asia in March 2019. Around 800 del­e­gates are ex­pected in the event that will in­volve 100 air­lines com­pa­nies, 200 air­ports, 30 tourism au­thor­i­ties, and 20 speak­ers.

CAPA-Cen­tre or Avi­a­tion will also hold its LCCs (low cost car­ri­ers) in North Asia Sum­mit in Cebu in June 2019.

Th­e­set­wom­a­joreventswere­an­nounced­byTourism Sec­re­tary Ber­nadette Ro­mulo-Puyat ear­lier this year.

Carreon also high­lighted that the Philip­pines will host the 2019 South­east Asian (SEA) Games on the lat­ter part of next year.

“In 2019, Philip­pines will be host­ing the SEA Games. This will be a big boost to tourism. Even if Lu­zon is the venue of the games, many will go to us. Def­i­nitely, Cebu and Bo­hol and the other prov­inces of Cen­tral Visayas will be fa­vorite des­ti­na­tions again,” he said.

Chal­lenges, growth

On the other hand, the Cebu IT.BPM Or­ga­ni­za­tion (CIB.O) said they also ex­pect fur­ther growth in the out­sourc­ing in­dus­try by 2019.

Wilfredo “Jun” Sa-a Jr. said that even if there were some IT and BPM lo­ca­tors in Cebu who flat­lined this year, there were still some who con­tin­ued to see growth.

US poli­cies and un­cer­tain­ties on the Philip­pine govern­ment’s stand on for­eign lo­ca­tors and tax in­cen­tive scheme­shave­pushed­some­com­pa­niesinthe­sec­torto hold ex­pan­sion plans in Cebu.

But even with this, he said Cebu still con­tin­ues to ce­ment its rep­u­ta­tion as a ma­jor des­ti­na­tion for out­sourc­ing.

“In 2019, for ex­ist­ing play­ers, they are al­ready busy look­ing at ex­pan­sion ar­eas. We ex­pect em­ploy­ment to con­tinue to grow,” he said.

Sa-a added that based on their ini­tial es­ti­mates, the to­tal­num­berof­work­ersem­ployedintheIT-BPMin­dus­try has reached over 160,000, up by 10,000 from 2017’s 150,000 work­ers.

The Cebu Pro­vin­cial In­vest­ments and Pro­mo­tions Of­fice (CPIPO) is also push­ing for more in­vestors in the prov­ince, es­pe­cially busi­ness process out­sourc­ing (BPOs) firms.

CPIPO Head Floreza Alpuerto said sev­eral for­eign in­vestors have ex­pressed in­tent to pour in­vest­ments in towns out­side of Metro Cebu.

“Cebu is at­trac­tive and com­pet­i­tive for in­vestors. What we’re try­ing to do in the CPIPO is to bring in­vestors to the coun­try­side, mostly BPOs,” she said.

Other op­por­tu­ni­ties for in­vest­ments in Cebu’s coun­try­side are re­new­able en­ergy and eco­tourism, she added.

Elec­tion year, new laws

The year 2019 also presents more op­por­tu­ni­ties, be­ing a midterm elec­tions year. Busi­ness lead­ers in Cebu see this as an added boost to the lo­cal econ­omy.

Cebu Cham­ber of Com­merce and In­dus­try (CCCI) Pres­i­dent An­to­nio Chiu said that his­tor­i­cally, more money cir­cu­lates dur­ing an elec­tion year.

“2019 is an elec­tion year, there is in­creased cir­cu­la­tion of money. In ef­fect, it is good for busi­ness. But this kind of money is not long term,” he said.

Cebu’s young pop­u­la­tion will also spur more eco­nomic ac­tiv­i­ties, added Man­daue Cham­ber of Com­merce and In­dus­try (MCCI) Pres­i­dent Stan­ley Go.

With more job op­por­tu­ni­ties and higher take home pay, the young work­force is ex­pected to spur the con­sumer mar­ket.

“Our pop­u­la­tion is a young pop­u­la­tion. There are a lot of op­por­tu­ni­ties go­ing around. The dis­pos­able in­come of peo­ple is higher. Those who were earn­ing P15,000 per month five years ago are now earn­ing P20,000 per month. There is high spend­ing,” Go said.

Govern­ment poli­cies, pro­grams and laws that are good for busi­ness are seen to take shape in the com­ing year.

Among these is the Ease of Do­ing Busi­ness Act of 2018, or Re­pub­lic Act 11032, which was signed into law by Pres­i­dent Ro­drigo Duterte last May. The ef­fect of the law was not yet felt by the busi­ness sec­tor this year as the govern­ment was still fine-tun­ing its im­ple­ment­ing rules, Carreon said.

The law’s salient fea­tures in­clude stan­dard­iza­tion of the pro­cess­ing time for govern­ment trans­ac­tion, and au­to­ma­tion of busi­ness per­mit and li­cens­ing for lo­cal gov­ern­ments, among oth­ers.

“Thi­sisama­jorstep­to­ward­sim­prov­ing­com­pet­i­tive­ness of our busi­nesses, not only in cities but also in the coun­try­side by sim­pli­fy­ing the pro­ce­dure and ease of ap­proval. The im­pact of the law will be felt in 2019,” he said.

Carreon said that the De­part­ment of Trade and In­dus­try (DTI), Civil Ser­vice Com­mis­sion (CSC), other govern­ment agen­cies, lo­cal govern­ment units, and the pri­vate sec­tor have been briefed on pro­vi­sions of the law. By 2019, he said, all govern­ment agen­cies should al­ready be im­ple­ment­ing RA 11032, es­pe­cially since it will be mon­i­tored as the law also man­dates the cre­ation of an Anti-Red Tape Author­ity.

The pro­posed rice tar­if­fi­ca­tion bill in Congress is also seen to be ap­proved by next year.

Ac­cord­ing to Carreon, this is one govern­ment mea­sure that will ar­rest the in­crease in the prices of rice, which was the big­gest con­trib­u­tor to the soar­ing in­fla­tion rates recorded ear­lier this year.

Govern­ment es­ti­mated that once the law is passed, it can re­sult to a P7 per kilo re­duc­tion on the price of rice.

The law will al­low the im­por­ta­tion of more rice in or­der to put in more sup­ply in the mar­ket. Im­porters will just have to pay a tar­iff to the govern­ment. The col­lected tar­iffs will also be used for a Rice Com­pet­i­tive­ness En­hance­ment Fund that the govern­ment will use to aid farm­ers in in­creas­ing their pro­duc­tiv­ity through tech­ni­cal as­sis­tance, seeds as­sis­tance, and mech­a­niza­tion, among oth­ers.

“For 2019, there will still be prob­lems. But it's still pos­i­tive. If there are no shocks that will be ex­pe­ri­enced, es­pe­cially the ex­ter­nal ones which are beyond our con­trol. The prices of fuel is one thing we have to look out for,” Carreon said.

CDN PHOTO/ TONEE DESPOJO

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