In just a span of a few decades, Cebu has established itself as a regional hub for commerce and industry. It currently serves as a center of shipbuilding and heavy-industry activities, and it has also earned its place as one of the most attractive bases of operations for multinational IT-BPM companies.
This is due to the province’s central location, continuous infrastructure development, deep pool of local talents, and abundance of available land. The same qualities that have bolstered Cebu’s trade and industry in the past are providing it now with opportunities to further improve its economic trajectory.
The province, which occupies an area of more than 4,900 square kilometers, certainly has the space and resources needed to economically benefit from the following trends:
The Adoption of Many Businesses of an Omnichannel Approach in Logistics
Online shopping and other eCommerce activities have seen tremendous growth in the past years, and they’re expected to undergo exponential growth in the coming years. Instead of utilizing traditional retail outlets to reach their customers directly, many businesses are keen on adopting a multichannel approach to logistics to meet the demands of the evolving market
Adopting the omnichannel approach means customers are afforded the means to order in-store or online, pick up their purchase or have it delivered to their homes, and return their purchase to the seller using a physical store or delivery service. Involving customers in the logistics process requires businesses to simplify inventory, logistics, and distribution, and provide customers with a personalized and seamless experience.
Businesses that are adopting an omnichannel logistics framework need to be able to accommodate same-day and next-day deliveries and make it easy for customers to return items to sellers. To offer such an experience, it’s a must for businesses to improve their warehousing capabilities and have access to last-mile delivery hubs.
Cebu has a central location and busy ports and terminals, and it’s also an emerging eCommerce hotspot. Businesses in and around the province and the region need self-storage, cold storage, and warehousing facilities so that they can sustain their growth and deliver their goods to their waiting customers.
Fortunately, there are a number of industrial real estate developments in the province where such facilities are readily available to local and international companies. These industrial estates can help Cebu-based e-commerce companies reach their projected growth and expand their market in the coming years.
An Uptick in Demand for Upscale Residential Properties
Cebu is one of the most affluent provinces in the Philippines. It has plenty of well-developed areas and communities that are surrounded by essential facilities and urban comforts, so there’s no wonder why a lot of people would deem it an ideal place for living in and raising a family.
Currently, there’s an increase in demand for premium and luxury residential properties in the province, specifically in and around the cities of Cebu, Mandaue, and Lapu-Lapu. More than just a testament to the province’s high livability, the rising need for residential properties bodes well for Cebu’s economy.
Luxury residential properties are not just places for raising families, but they also present resilient investment opportunities. Physical space, after all, is a finite resource. As land becomes scarcer, large residential real estates increase in value.
The rising demand for upscale homes and housing units, in turn, can be seen as a reflection of reinvigorated consumer sentiment. Investors are once again gaining confidence in Cebu’s economic prospects, and they’re eager to acquire assets that will only grow in value over time.
The development of luxury homes indicates possible growth for the surrounding communities as well. The arrival of new households with high spending power can encourage the development of more businesses and basic community facilities in the general vicinity and benefit the other people living in the same area.
The Steady Increase in the Number of Jobs Generated by the IT-BPM Industry
Cebu, which has plenty of recently completed and planned infrastructure projects, remains a top-of-mind option for IT-BPM companies that are aiming to expediently put up new bases of operations in the country. The province continues to offer a large local workforce equipped with technical skills, and it has infrastructure dedicated to further improving telecommunication, connectivity, and transportation.
According to the Contact Center Association of the Philippines (CCAP), the IT-BPM industry is expected to increase both its export revenues by 10 percent and the additional jobs it generates by 8 percent annually. If the province can continue providing what IT-BPM companies require to continue their smooth operation in the location, then Cebu is poised to maximize the opportunities that this trend presents. Currently, the signs indicate that the province is on the right track.
In fact, two of Amazon’s virtual customer service (VCS) projects in the country are based in Cebu City. Employing a 100 percent remote work setup, the PHP524-million VCS operation is made possible by Cebu’s reliable digital infrastructure. The engagement with Amazon is projected to contribute PHP 959.5 million to the economy and PHP 616.9 million to household incomes in the coming years.
A Stabilized Demand for Office and Hybrid Workspaces
The demand for office spaces dipped during the pandemic, but the good news is that the number of pullouts and rightsizing has dipped by 79.25 percent in 2022 compared to the previous year. Vacancies have also eased to about 21.9 percent from a peak of 23.7 percent by the end of 2021.
While remote and hybrid work setups have continued to be popular in the wake of the pandemic, office spaces remain essential to many industries and businesses. In 2022, IT-BPM companies accounted for 67.3 percent of leasing activity in Metro Cebu, while the remaining 32.7 percent was from industries such as finance and banking, engineering and architecture, and publishing. Many of these leasing activities are concentrated in established commercial and mixed-industrial zones such as Mactan Economic Zone 2 (MEZ 2) Estate.
The recently completed infrastructure projects in Cebu are bound to improve the economic activities in places outside of the metro areas. In particular, the completion of the Cebu-Cordova Expressway makes it convenient for businesses and companies to expand their operations and perhaps put up offices and hybrid workspaces in other sections of the province in the future.
There’s much that Cebu residents, businesses based in the province, and the stakeholders who continue to strengthen economic activity in the area can look forward to. With continued investment, the province is well on its way to realizing the opportunities that the current trends are bringing about.