Gov’t, biz must work together to sustain robust Cebu economy in 2014

CEBU, Philippines -  While the country's strong economic fundamentals cement optimism among business leaders for 2014, Cebu, is, however susceptible to the drawbacks usually felt by emerging cities if issues on traffic, crime, congestion, pollution and rapid migration will not be properly addressed.

"If we don't get our political and business acts together it will just be more low quality third world growth versus real development," said Cebu Business Club (CBC) president Gordon Alan "Dondi" Joseph.

Business prime mover Jonathan "Jay" Aldeguer believes that Cebu will be led by its economic drivers - the Business Process Outsourcing (BPO), tourism, real estate - and 2014 will see a robust construction sector while rebuilding and expansions will take place in the 12-month period.

"If the successful bidding of the Mactan International Airport were a benchmark of things to come, then Cebu is expected to really gain stronger momentum in the next few years. The airport expansion plans indicate that Cebu is on the verge of seeing rapid growth," said Aldeguer.

However, both Aldeguer and Joseph warned that this growth should be well complemented with improvement of infrastructure, and immediate solution of identified "drawbacks", otherwise the expected growth will remain an "illusion."

The high economic gear seen in 2014, they said, should be accompanied with proper urban planning, such as an implementation of an effective masterplan to pursue a smoother journey to proper development, and take advantage of the "unshakeable" economic upswing.

"Cebu needs to come up with a proper masterplan to manage this growth if we want to sustain a strong economy and, more importantly, protect Cebu's appeal as being a 'livable' place," said Aldeguer.

 While the economy looks bright for Cebu, quality of life is susceptible to "drawbacks" of emerging cities, which Cebu has began to experience. Issues such as traffic, crime, congestion, pollution, rapid migration and many others are expected to worsen as we continue to progress, Aldeguer reiterated.

"The year 2014 will be a year of consolation and recovery for us, provided we manage the challenges we face: flooding, traffic, waste management, sewerage and poverty. But to significantly grow and alleviate poverty, we need to improve our ability to attract labor intensive direct investments and build on our tourism potential," Joseph said.

Cebu Chamber of Commerce and Industry (CCCI) president Lito Maderazo, meanwhile, said that while a more dynamic outlook is anticipated for 2014, the government has a crucial role in making this a reality and to ensure that Cebu will be able to cope with the rapid growth.

"The government should get their acts together. We still need to see the government leading the way," Maderazo said, emphasizing that the P24 billion budget allocated for infrastructure and rebuilding will further fuel the economy, as well as prepare the Philippines for its membership into the ASEAN economic community (AEC) by 2015.

While sustained high-powered growth and strong momentum is not a question, the focus now is for government to be prepared to cater to the swelling migration figures in urban cities like Cebu, anticipating the worsening traffic problems, and other issues that come along with swift economic enlargement, cautioned Maderazo.

Mandaue Chamber of Commerce and Industry (MCCI) president Philip Tan, likewise, pointed out that although businessmen always start their new years with full optimism, this powerful state of mind could only be sustained if it is supported with actual complementary works from authorities, like the government.

Tan believes that 2014 will bring out the construction sector, as the new "star performer," bolstering the already dynamic economic drivers like BPO, tourism, and real estate.

"The year 2014 is a construction year. There will be more people to get employment in the construction sector," said Tan.

Opportunities for entrepreneurs to enter into the lucrative construction material trading and supplies are very promising too, he added, thus, it is important for the government to make an enabling environment for businesses to capitalize on the hyperactive economy.

Although the effect of the disasters to the region has not eroded the strong growth momentum in 2013, National Economic and Development  Authority (NEDA) -7 officer-in-charge Efren Carreon warned that there might be a slight downward movement in the early part of 2014, as the impact of the devastation brought about by the calamities experienced in 2013 will hit the economic activity grounds in the first three months.

Moody's Analytics projected that the Philippine economy is going to sustain its strong growth in 2014 and remain as one of the world's fastest growing economies.

Despite the challenges that faced our country, confidence remains high, and investment, both public and private, is driving the economy forward. Although the government and economists forecast a dip in economic output in the fourth quarter due to the effects of recent calamities, rebuilding efforts in early 2014 are expected to prop up the economy.

Thus, growth is expected to remain within the government's target of a 6.5 to 7.5 percent range in 2014.

Senior economist Glenn Levine said in a report entitled Asia Pacific Outlook 2014: Realizing Potential that the Philippine economy's performance will be in line with the region's performance as global demand picks up.

"The Asia Pacific region enters 2014 growing solidly with a mild tailwind from growing global demand. The global and regional economies are on a slow cyclical upturn and downside risks are receding. The year 2014 should be better than 2013, with most national economies growing near or at potential rates by year's end," Levine said. — /QSB (FREEMAN)