CEBU’s economy will be “fairly stable” this year despite uncertainties in the global market, business leaders said.

“The growth in the local economy in 2012 will be fueled by Cebu’s booming industries like business process outsourcing (BPO) and tourism. The continued investments from the private sector would also help Cebu weather the lingering effects of the US’ and European Union’s economic problems,” said Cebu Business Club president Dondi Joseph.

Plan your Sinulog week ahead and find out what’s in store for Sinulog 2012.

Economists had projected 2011 as a “recovery year” for the 2008 global financial crisis but full recovery was delayed as the EU debt problem and economic instability in the US continued to hound the global market, affecting export-driven economies like the Philippines, particularly Cebu.

Volatile

“It will be a volatile market this year,” said Cebu Chamber of Commerce and Industry president Samuel Chioson, referring to the potential impact of the economic problems of the world’s two biggest economies.

The Monetary Board of the Bangko Sentral ng Pilipinas earlier reported that “there is a need to continue to monitor the strength of external demand, especially amid signs of increasing downside risks to the global economy.”

“Economic conditions in Europe could weaken further in the period ahead, posing risks to external demand as well as to financial markets through risk aversion. While European policymakers made progress in their response to the sovereign debt and banking problems over the past month, confidence remains fragile as leaders have yet to decide on the implementation mechanics of the plan. As a result, the risks to the global economy still appear to lie predominantly on the downside,” the report stated.

Joseph said that while external problems will continue to affect the export industry, Cebu can capitalize on its other booming industries such as tourism, BPO and real estate to compensate for losses in export revenues.

Although there are no major public-private partnership (PPP) projects for Cebu this year, Joseph said the PPP programs have the potential to pump-prime economic activities.

He said that if PPP programs will be supported by correct economic policies, this will also help the country’s economy sustain its growth.

BPO services

Economists have predicted the country’s growth to be at 4 to 4.5 percent this year.

Chioson described last year’s growth to be more “privately-led.” He said local and foreign businessmen have poured in so much investments in Cebu as seen in the various property developments such as BPO and condo buildings.

According to Cebu Holdings Inc. president Francis Monera, demand for BPO services is expected to surge as more companies abroad seek to cut operation costs and improve efficiency.

The company expects a 20 percent increase in workforce for Cebu Park District, which currently has 35,000 employees.

Mandaue Chamber of Commerce and Industry (MCCI) president Eric Mendoza, on the other hand, expects the economy to grow moderately this year. He identified the low-interest environment, government spending and big infrastructure projects to be major drivers of the economy.

Philam Life president and chief executive officer Rex Mendoza, in his recent visit to Cebu, said 2012 will also be a year of preparations for the 2013 elections. Increased spending is expected to begin this year.

Despite market challenges, Rizal Commercial Banking Corp. first senior vice president and RBG deputy group head for VisMin sales Prudencio Gesta said local businesses will improve this year because of the country’s sound macro-economic fundamentals.

“We expect positive growth in the economy this year. More small and medium enterprises (SMEs) will continue to pour in investments this year,” said Filipino-Cebuano Business Club Inc. president Rey Calooy. He said SMEs have strong confidence on the Aquino administration.

Citing figures from the BSP, Calooy also reported that in terms of regional growth, Central Visayas grew by 11.2 percent this year, faster than the National Capital Region at 9.6 percent. He said this is an important economic indicator that Cebuanos should bank on.

Source:http://www.sunstar.com.ph/cebu/business/2012/01/02/cebu-will-be-fairly-stable-198494