Tourism, Cebu Call Center and ICT Drive Central Visayas Economy

Tourism, Cebu Call Center and the Information, and Communication Technology (ICT) sectors are growth drivers of the regional economy.

National Economic Development Authority 7 (NEDA-7) regional director Marlene Rodriguez reported that Central Visayas (Cebu, Bohol, Negros Oriental, Siquijor) economy has moved forward significantly because of excellent public-private sector tandem in building and promoting tourism and its downstream industries.

In a joint full council meeting in Bohol, Rodriguez told the audience that the two sectors fueled the growth of other sectors that are directly or indirectly aligned with tourism, Cebu call center and ICT industries such as construction, power, banking, retail trade, and transportation.

NEDA-7 reports that Central Visayas tourism industry expanded in 2007 with visitor arrivals posted at 18.7 percent increase from last year's level of 11.80 percent. The region's hosting of a number of ASEAN-related meetings contributed to the growth of the industry.

The report further said that the continued promotion of Central Visayas as a premier tourist destination in the country has remarkably improved tourism growth in 2007.

International communities have recognized specific areas in the region as among the best tourist destinations in the world. In 2007, a travel magazine ranked Cebu as seven (7) among the 10 top island destinations in Asia and Indian Ocean.

Total tourists' arrivals, foreign and domestic from 2005 to 2007 have been steadily increasing from nearly 1.5M in 2005 to more than 1.633M in 2006 and 1,938,111 in 2007.

The NEDA-7 regional economic situationer report also cited the positive performance of the export and agriculture sectors. It said that the region's export industry appeared to have recovered in 2007 enough to post a positive from a negative growth in 2006.

Total export earnings in 2007 increased from $3.726-million in 2006 to $4.922-million. The increase however, was partly due to the rapid appreciation of the peso that made the region's export products more expensive in the international market.

Although there was an increase in the export sector, industry players said 2007 was not a very good year for the entire export industry in the region because the rapid peso appreciation adversely affected the small and medium enterprises (SME) some even closed shop.

The report also noted there were still certain sectors in the industry that managed to perform well such as the gifts, toys, house-wares (GTH), fashion accessories and high-end furniture products.

Electronics on the other hand continued to be the top export product and dollar earner in Central Visayas in 2007 followed by other industrial goods, electrical equipment, garments, traditional products, furniture, steel and metal products, vehicles and machinery parts, marine products and GTH.

Cebu Call Center

The ICT industry on the other hand also performed well in 2007. More business process outsourcing (BPO) firms, i.e. Cebu call center, set up offices in various parts of the region while those existing companies expanded their operations.

The NEDA-7 report also pointed out that part of the investors' attraction of Central Visayas specifically, Cebu was its selection as a disaster recovery area for IT firms.

A disaster recovery area according to the report is where IT firms transfer or replicate their operations in case there are disruptions in their main centers' operations which are mostly located in Manila.

It was reported that at the Asiatown IT Park alone, the number of IT firm locators including Cebu call center increased from 20 at the start of 2007 to 30 by year end.

Meanwhile, investment interests in the region also remained strong in 2007 with most prospective investors wanting to invest in tourism, Cebu call center and ICT-enabled sectors.

According to the Board of Investment (BOI), there were two registered projects in Central Visayas worth P725.9 million. These are located in Negros Oriental with an agricultural processing project and the other is a tourist accommodation facility Bohol.

With the continued boom in the tourism market, investments were related to hotels and resorts and other related facilities such as spa, and fitness and wellness centers.

A number of new BPO investments started in the region, many of them are into Cebu call centers, software development, and computer animation.

The NEDA report further said that the number of projects in Central Visayas that were registered with the BOI doubled in 2007 from seven (7) projects in 2006 to 14 new projects in 2007 with a total investment cost of P15.69 billion.

These projects included cement manufacturing, ship repair and food processing to mass housing, tourist facilities, construction, and establishment of ICT-enabled industries. Nine (9) of these projects are located in Cebu, three (3) in Negros Oriental and two (2) in Bohol.

In similar developments, the Philippine Economic Zone Authority (PEZA) in the region has approved a total of P4.38 billion worth of investments in 2007.

It is 43 percent less than the total investments PEZA approved in 2006. According to the PEZA report, the decline was the result of the more than 60 percent drop in foreign direct investments approved by PEZA in 2007. Local investments on the other hand was up by 9.18 percent from P2.081 billion in 2006 to P2.272 billion in 2007.

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