Rising costs dampen business registrations in Central Visayas

CEBU, Philippines — Business registrations in Central Visayas declined in the first quarter as persistent inflation, rising operating costs and economic uncertainty prompted entrepreneurs to scale back expansion plans, underscoring the growing pressure on small businesses despite pockets of resilience in the region’s economy.

Data from the Department of Economy, Planning, and Development (DEPDev-7), showed business name registrations fell 7.8 percent to 24,870 in the January-to-March period from 26,958 a year earlier.

Registrations contracted throughout the quarter, declining 6.5 percent in January, 12.8 percent in February and 5.4 percent in March.

The slowdown points to a more cautious business climate as elevated prices, higher fuel costs and mounting operating expenses weigh on investment decisions among micro, small and medium enterprises (MSMEs) which account for the bulk of new business registrations.

Retail trade remained the region’s largest source of new enterprises, accounting for 11,562 registrations during the quarter.

However, registrations in the sector fell 13.2 percent from a year earlier, reflecting softer consumer demand and higher business costs.

Food and beverage service activities posted a steeper 18.1 percent decline to 2,746 registrations, suggesting restaurant operators and food entrepreneurs are becoming more cautious as rising food prices, labor expenses and utility costs squeeze margins.

Real estate was one of the few sectors to buck the broader trend, with registrations rising 13.6 percent to 2,042, signaling sustained investor interest in property-related businesses amid continued urban development across the region.

Registrations for other personal service activities were largely unchanged.

Despite the regional slowdown, Cebu Province remained the biggest contributor to new business formation, recording 10,564 registrations, up 11.4 percent from a year earlier.

Bohol also posted double-digit growth with 6,406 registrations, while the highly urbanized cities of Cebu, Lapu-Lapu and Mandaue collectively registered 7,900 new businesses, a 41.9 percent increase from the same period last year.

The strong performance in the region’s urban centers suggests entrepreneurial activity continues to be supported by expanding tourism, consumer services and small-scale enterprises even as the broader business environment becomes more challenging.

DEPDev-7 expects retail activity to remain under pressure in the coming quarters as elevated inflation, higher fuel prices and rising logistics costs continue to weigh on household spending and business profitability.

Higher electricity, labor and food input costs are also expected to constrain expansion plans, while the potential return of El Niño could further increase utility expenses for commercial establishments.