Business experts’ prediction for 2016: Poll activities to trump trade

CEBU, Philippines – Although Cebu’s economy is seen to traverse the upward route in 2016, the year of the Fire Monkey, major economic activities on the other hand are expected to take the backseat, as the election fever will largely define the year’s journey.

In the first half of 2016, consumption is expected to soar due to election spending. While this is good for the economy, this will not give lasting effect to spur growth, said Cebu Business Club president Gordon Allan “Dondi” Joseph.

“Election spending does not do much to the economy. It comes and it goes right away. These are non-productive spending. What is important are fundamentals,” said Joseph, who is also the chairman for the Integrated Planning Committee of the Metro Cebu Development Coordinating Board.

What is supposed to be a high-speed economic growth experienced by Cebu in the recent years, is seen to meet a “bump” along the way in 2016, due to election and its incapacity to manage the growth.

This means that Cebu’s potential for growth will be derailed due to the “much celebrated” election, and mismanagement.

“In the next seven months, nothing is going to happen. Everything will stop,” said Joseph, adding that what is apparent is people will continue to grumble in a congested metropolis.

Unless “miracles” will happen in the first semester, where midnight or last-minute spending will be released or started, the economy will depend on the private sector’s pump priming.

Leadership transition could also affect the growth momentum as elected leaders will start to familiarize with their new or recovered power that will result to a stagnant second half of 2016.

With these unfavorable factors determining the economic movement in 2016, Cebu will have to depend on its money-making industries like tourism, BPO (business process outsourcing), and the stable OFW remittances.

Infra problems

While the growth is continuous, Cebu’s inability to manage the expansion will become much clearer in 2016. People will experience worsening traffic, rise in water demand and infrastructure inefficiencies resulting to flooding and sewerage issues, among others.

Likewise, Mandaue Chamber of Commerce and Industry Philip Tan warned Cebuanos to brace themselves for a transforming Cebu starting 2016—economically vibrant, but infrastructure-impaired.  In the first few months of 2016, Tan urged Cebuanos to rally for better leaders to manage Cebu’s imbalanced growth; otherwise everyone will suffer for “our” misjudgment.

Tan echoed the advice given by renowned economist Bernardo Villegas, saying the 2016 election will make or break the country’s ability to handle growth.

“Choose a president who will solve problems in infrastructure,” Villegas told the Cebuano business community in a recent economic briefing.

The year of transition will not only be seen in the political view, but investors are also seen to slowdown, as their previous plans may differ depending on who will lead the country, including the local government leaders.

“Capitalists are holding off their plans pending the turnover of the new administration,” said Tan.

According to Tan, it is businesses’ initial reaction to temporarily hold-off any major business plans, while the country is bound to be led by another set of officials. He stressed that the next president or leaders should be “infrastructure advocates”, otherwise the Philippines will lose its grip in the long-term economic buoyancy.

Whether this desire will be realized after the election, experts believe the Philippines’ economy in general will continue to make waves as economic headwinds are pushing towards Asia, but what worries the local players is the ability of the country, particularly Cebu to maneuver the growth.

Cebu Chamber of Commerce and Industry President Ma. Teresa Beltran-Chan also expressed her apprehensions that Cebu is on the brink of “infrastructure-collapse” if immediate attention will not be acted upon.

“In 2015, we were victim of our own success, because we weren’t able to manage the growth. This resulted to traffic and other infrastructure issues,” said Chan.

Business leader Melanie Ng also cautioned on the effects of transition to the general economic rhythm of Cebu.Ng, who is an officer of the CCCI, hopes that transition could mean cleaning up.

“Work on what works and do away with what does not work,” she said.

The people’s final choice of leaders will play a critical role in achieving balanced economic growth of Cebu, Ng said, explaining that 2016 is an opportunity for the general public to make important contribution to the transition, “if we play it right, we are also the only ones to benefit.”

In Chinese astrology, the Year of the Fire Monkey, brings in energies of wisdom, wit and vigilance.

“We will then take advantage of the year by being smart and vigilant,” Ng said.

Meanwhile in the macro level, the next 20 years will be a good economic story for the Philippines, Villegas assured, explaining that within this period the country could grow within the range of six to seven percent in Gross Domestic Product.

Drivers will continue to be the growing outsourcing sector, overseas Filipino workers’ remittances, tourism and the renaissance of manufacturing industry in the country. — /BRP (FREEMAN)