Cebu City, the oldest and second largest city in the Philippines, is fast becoming the most important trading hub and commercial center of the country outside Metro Manila.

Home to the world-famous Sinulog Festival, an annual tribute to the Santo Niño or Child Jesus, Cebu City in the Visayas is a city of contrasts. Dubbed by the local government as “a sophisticated metropolis with the charms of an island destination,” the city has, among others, world-class resorts and dive sites in Mactan Island and Sogod, complemented by special economic zones, IT Parks, and central business districts, also among others.

No wonder that, based on Department of Tourism (DOT) statistics, Cebu continues to be the top tourist drawer of the country, registering a total of 291,716 foreign visitors from January to October 2004 alone, already taking 12.7% of the total 2,291,352 number of visitors tallied by the DOT for the whole of 2004. For the same January to October period, Cebu also managed to attract 560,064 domestic travelers.

“Cebu is strategically well placed for the next 10 to 15 years, particularly in the area of tourism, simply because we are accessible to all the major islands, beach resorts, and dive spots,” Cebu City Mayor Tomas Osmeña says. “With this interconnection, we are now strategically well placed to move ahead.”

Cebu City’s strategic location, however, goes beyond tourism, with the city now considered the most important trading hub and commercial center outside of the country’s capital city, Manila. And the promotion of this is the intention of the business festival known as Cebu Business Month (CBM), held every year in June.
This year’s CBM 2006 “was themed ‘Invest Cebu’ because Cebu has been so successful in getting tourists that it actually has a shortage in hotels and other infrastructures. So Invest Cebu is a call for more investments, especially in the information and communication technology (ICT), education, and tourism industries. Cebu hopes to encourage not just the big players but also the small and medium investors,” CBM 2006 Chairman Wilson Ng says.

“With CBM, we have put our future in our own hands, and I think we’re doing very well,” Osmeña says.

Business Upper Hand

“To attract investors, accessibility is always the first issue to contend with. So, if you want to promote an investment destination, the first thing you have to be is accessible,” Joel Mari Yu, Cebu Investment Promotions Center representative, says.

Currently, 21 carriers fly the one-hour Manila-Cebu route per day, with daily flights to Tokyo, Japan; Kuala Lumpur, Malaysia; and Hong Kong. There are also flights going to Singapore 10 times a week; and to Taipei, Seoul, and Qatar thrice a week.

This accessibility has, thus far, attracted the “over 300 foreign direct investors in the manufacturing, IT, and tourism sectors,” with over 50% of the current investors Japanese.

In 2005, Cebu’s exports amounted to over P 4.7 billion, which is 10% of the country’s total export revenues. These exports were all from manufactured items and services, including furniture, fashion accessories, gift toys, house wares, and packaging materials, since Cebu “does not export raw materials or agricultural models,” says Yu.

Currently, there are seven PEZA-registered (Philippine Economic Zone Authority) special economic zones in Cebu, including one that is designed for heavy industries, such as shipping. There are two PEZA-registered information technology (IT) firms, the only ones outside Luzon. Moreover, there are numerous sports centers and software companies that have now made Cebu the second largest IT hub in the country, also after Manila.

Cebu also puts a premium in “cultivating a skilled workforce,” says Yu. The city has nine universities and 39 colleges with an annual population of more than 200,000 students. From these colleges and universities, around 20,000 students graduate yearly, with approximately 2,000 of them graduating with various engineering degrees – an “added advantage as Cebu hopes to concentrate on developing computer graphics, business software, and other computer technologies, while continuing to exploit current opportunities in call centers.”

Ensuring Cost and Lifestyle Advantages

Based on a study conducted by the Cebu Chamber of Commerce and Industry, the cost of living is cheaper in Cebu than in Manila. The cost of food in supermarkets, for example, is purportedly 20%-50% cheaper in Cebu, while renting condominium units or executive houses also supposedly 20%-50% percent cheaper in Cebu.
This, thus, makes running a business in Cebu cheaper. While the minimum wage in Manila is P320 per day, it is only P 250 per day in Cebu. Also, the cost of moving containers in the port of Cebu is 50% cheaper than in ports in Manila, and craneage is P300 per box in Cebu against P1,000 per box in Manila.

Cebu continues to work on providing business opportunities embedded within environmentally-conscious developments. “[Our aim is] to cultivate a culture that will ensure that district Cebu is as rewarding as it is pleasant,” Yu says. “I think everybody will agree [that] if you were given a choice between working surrounded by asphalt in Manila and [in] a white beach in Mactan, I think you’ll choose to be in a white beach in Mactan.”

“It is a quality distinctly Cebuano, [to remain] focused amid the confusion wherein others choose to dwell,” says Cebu Provincial Governor Gwendolyn Garcia during the CBM launching. “Cebu knows where it’s going, and is already on its way there.”