CEBU, Philippines – Despite the negative implication of the reported low growth rate of the country’s Gross Domestic Product (GDP), local businessmen in Cebu remained optimistic and have agreed that the figures encouraged the business sector to work even harder to cope with the hard times.
The first quarter report of the National Statistics Coordination Board (NSCB) indicated that the Philippines suffered a decline in manufacturing and trade, which sent the economy down with a growth rate of only 0.4 percent from the previous quarter’s 3.9 percent due to the impact of the global crisis.
In an interview with local businessmen from Cebu, they collectively agreed that despite the negative backdrop of the world economy, the city continue to show signs of dynamic activities due to the growth of its tourism and BPO sectors.
Vice president for Philippine Chamber of Commerce Visayas and Cebu Chamber of Commerce and Industry past President Jose T. Ng said that the slow GDP growth does not only happen in the country because worldwide, bigger economies are even experiencing much slower growth and much bigger decline compared to ours.
“The low GDP does not only happen in the country, its happening everywhere. We just need to work harder. Some economists say that we might have a recession but we just have to face it when it happens. Maybe we can tighten our belts because we can’t do anything to stop that because it’s a world crisis,” said Ng.
He said that at this early, we cannot expect economic recovery because it might still take us some more time and businessmen just have to be patient.
“As of now, we still cannot feel the impact of the crisis here in Cebu and we are still doing well. But we have to get ready when it comes. There is a need for people to invest more and spend more in the local economy to accelerate the business activities,” added Ng.
Meanwhile, Philippine Retailers Association Cebu chapter president Melanie C. Ng said that retailers are hoping that the country’s recent low GDP growth will not have a direct effect to their businesses and the market.
“We retailers still maintain a positive outlook because we have instituted measures to protect ourselves in case we encounter a dip in our sales. We have increased our cost efficiency through decreasing our operating costs. Increasing cost efficiency can help us offset possible decrease of sales,” said Ng.
She said that although it is difficult to ascertain as to when the economy will recover, so far they continue to have steady sales as there has been no cases of drastic declines so far.
“Our daily sales have been steady and this might be attributed to the opening of classes which is usually a positive period. But we hope we can maintain this. We still fear that something bad might come but we are trying to prepare ourselves and we are not complacent,” said Ng.
She said that right now, retailers are careful in their stock replenishments and they are buying movable stocks so that they can lessen their inventory.
“Though people still buy, they are practicing conscious buying because they are conscious of their lower shopping budget. But Cebu is continuously growing because of its tourism which also sustains our growth,” added Ng.
As for the banking sector, former Cebu Bankers Club president and Rizal Commercial Banking Corp. (RCBC) VP Prudencio J. Gesta said that banks continue to be aggressive in offering and expanding their loan portfolio to provide the business community with cheaper interest rates.
He said that the seven to 12 percent interest rate of banks these days is still at its lowest considering the global financial meltdown.
Gesta said that although banks now have become more prudent and cautious, loan take ups continue to grow which shows that businessmen continue to invest in their businesses and among those sectors who continue to avail of bank loans are firms from the trading businesses, real estate, financial institutions and even small and medium entrepreneurs.
“Usually, Cebuanos are conservative borrowers. If they think that they can make money out of the money they will lend, they will borrow but if they can’t get anything from it, then they refrain from doing so,” said Gesta.