Booming Cebu aims to be an economic powerhouse

PUBLISHED : Tuesday, 15 March, 2005, 12:00am
UPDATED : Tuesday, 15 March, 2005, 12:00am

Somewhere in the Pacific is an island called Cebu. It sells itself as a hub for transnational trade, transportat, information technology, call centres and tourism.

What it discreetly neglects to say is that it is part of the Philippines.

Many of its foreign visitors never realise they have set foot in a country with an international reputation for high-profile kidnappings, bombings, festering communist and Muslim insurgencies and corrupt governance. Booming Cebu has been spared such troubles.

Cebu is more than happy not to correct the illusion. Its businessmen and government have embarked on a mission to transform this booming economy into an international brand.

'We have a dream of emulating Singapore, the similarities are so obvious,' Cebu governor Gwendolyn Garcia said.

This strip of land covering 5,000 sq km in the central Philippines is eight times bigger than Singapore but has only a population of 3.4 million, or a million fewer residents than the Lion City.

Cebu's penchant for going it alone was culturally ingrained in its people, said Mrs Garcia. 'We started out as an independent kingdom' with trade links to China, Japan and Arabia long before Portuguese circumnavigator Ferdinand Magellan dropped anchor on the island on April 1, 1521.

The province produced the first Filipino hero, Mactan island's chieftain Lapu-Lapu, who defied Magellan and killed the intruder.

Over the past 33 years, Cebu has received scant attention from the national government, initially because it was considered opposition country and later because national coffers ran dry.

Txabi Aboitiz, a member of Cebu's leading business clan, said: 'My theory is, we never really got much attention or support. We really had to fend for ourselves, [so] we developed resilience.'

When President Gloria Macapagal-Arroyo showered the province with infrastructure projects, grateful residents gave her a winning margin of one million votes in last year's presidential election, which wiped out the lead of her closest rival, the late Fernando Poe.

Entrepreneurs have flourished on the island and have made a name beyond its shores, the most prominent being airline and tobacco magnate Lucio Tan, manufacturer John Gokongwei and plastics king William Gatchalian.

The Aboitiz Group has loyally stayed in Cebu. From trading abaca - Manila hemp, a raw material in rope-making - it has grown into a highly diversified conglomerate involved in shipping, transportation, energy, flour and banking.

Cebu gained a measure of fame recently for being the hometown of Monique Lhuillier, fashion designer to celebrities Britney Spears and Angelina Jolie.

Something on the island nurtures creativity. Natives make handicrafts, furniture and fashion accessories. They also make Guess, Versace, Nautica and Timberland watches for Timex Corp, which has announced a US$13 million expansion.

Furniture designer Kenneth Cobonpue has noted that Cebuano craftsmen can be trained to do highly detailed, complex designs. The only drawback is their slowness, but this is offset by Cebu's relatively low labour costs.

This has made Cebu one of the Philippines' fastest-growing economies, with exports as the backbone: US$4.152 billion last year - or 10.5 per cent of the national total.

The bulk of its exports last year - 55 per cent - were electronic goods, followed by furniture. These were bought mostly by Japan - 41 per cent - followed by the United States, Hong Kong and China.

Cebu, which accounts for almost 90 per cent of the nation's furniture exports and is home to a big Chinese-Filipino community, has been quick to cultivate China as a market for high-end furniture.

As a result, China, which was nowhere among Cebu's top 10 export markets four years ago, is now the province's fourth largest. Mrs Garcia said China was considering Cebu as a 'buying station' and transshipment point for its direct sea and air links to 13 countries.

Cebu was also home to two underground industries - detonators and handmade guns called paltik, said the Centre for Investigative Journalism.

A unique trait of Cebuano businessmen was their inclination to be team players, said Maricris Encarnacion, secretary-general of the Asean Federation of Electrical Engineering Contractors. 'Competitors support each other, they go to the same [trade] show as friends. They not only sell themselves, they sell the entire industry.'