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real stories on Cebu's business landscape…

Replacement investment

Sun.Star Cebu <> Saturday, August 30, 2008

BY NANCY R. CUDIS, Sun.Star Staff Reporter

WHILE the number of investments in the country has increased recently, these merely replaced what had been lost.

Professor Ernesto Pernia of the University of the Philippines School of Economics made the observation while warning government against being complacent.

“There is a recent investment pick-up from the private sector, which is good.

But looking at it more closely, it’s more of a replacement investment that is making up for the depreciated investments in the past. It is not a net additional improvement in the economy,” said Pernia, during a talk last Wednesday at the University of San Carlos on the economy, and the food and fuel crises.

He said that since there are fewer investments, there are not enough jobs for about 1.2 million students nationwide who graduate every year.

Data at the National Statistics Office show that there were 2.9 million unemployed Filipinos in April 2008, or eight percent of the country’s population. The country’s unemployment rate as of April 2008 is higher than the 7.4 percent recorded in the same period last year.

Poverty

Pernia said that with low investment growth and higher unemployment, poverty incidence has gone up to 33 percent in 2006 from 30 percent in 2003, which indicate that two years ago, about four million Filipinos lived below the poverty line.

This makes the country’s economy more vulnerable to the global food and fuel crises, he said. Government’s lack of capacity to help boost private investment can be blamed for this vulnerability, he noted.

The National Statistics and Coordinating Board reported Thursday that the country’s economic growth in the second quarter of this year slowed to its lowest rate in three years as higher inflation hurt consumption and mining output contracted.

Gross domestic product (GDP) in the April-June quarter grew 4.6 percent from the same quarter a year ago. Growth in the first quarter was revised to 4.7 percent from an earlier 5.2 percent.

GDP growth—referring to the increase in the value of goods and services produced within the country—in the second quarter of 2007 was a much stronger 8.3 percent.

Slowest growth

Described as “uninspiring,” overall economic growth was considered the slowest since 4.4 percent in the first quarter of 2005.

“Achieving the full year target will be a tough challenge as we continue to face high food and oil prices,” Socio-economic Planning Secretary Ralph Recto told the AFP earlier.

Government has set a growth target of 5.5 percent this year, but Recto said that to achieve this, the economy has to grow by 6.4 percent in the second half of the year.

Pernia also warned against the ill effects of economic growth that is driven by consumption by those who receive remittances from overseas Filipino workers.

He said that too much dependence on overseas remittances can cause moral hazard problems like reduced work effort at the household level, government complacency regarding urgent policy reforms, brain and skill drain, and psycho-social costs.

“Dependency on remittances is neither good nor sustainable in the long run,” he said.

While presenting income of households that get OFW remittances from 2000 to 2006, Pernia pointed out that overseas remittances have “insignificant” impact on poverty; and even further widens the gap between the poor and the rich, compared to domestic remittances—money earned from local jobs—that manifest an “equalizing” effect among the poor and the rich.

This is why, he said, the government and the public should actively promote domestic employment and internal migration rather than overseas employment.

Filed under: Business,

Local market helps

Sun.Star Cebu <> Thursday, August 28, 2008

BY NANCY R. CUDIS, Sun.Star Staff Reporter

THE slowdown of the US economy, as well as Japan and those in the European Union, has pushed some Cebuano export companies to look at the local market for their products.

“At the same time, (we) must take this time to retool, be more productive and be smarter as (we) continue to trade in the global stage that requires us to be so,” said Confederation of Philippine Exporters (Philexport)-Cebu president Jay Y. Yuvallos.

He noted that some export companies like those selling handicraft and fashion accessories are still enjoying good sales, which are augmented by the local market.

“We must understand that in bad times, winners are produced. It just happens that the export sector, especially the creative industries—like furniture—are not in the pink of health,” he said. “Is this reason for people to be cautious in investing their hard-earned capital? Yes. But is it over? No.”

Yuvallos, also president of Interior Basics Export Corp., told reporters that the worldwide phenomenon of rising prices of oil and other basic goods may affect everyone, but there are many people in different parts of the world who still want to furnish their homes.

“So there is still a market in what we do. The important thing is our resiliency. We must adjust and be quick. At present, we are coping up very well with what is happening in the world market, no matter how hard it is,” he said.

Diversify

To cope with the growth slowdown of markets, Philexport has been urging its member-companies to diversify, like producing new products for traditional markets, new products for new markets or by finding new markets for the usual products.

Philexport also encourages exporters to study other countries, like those in Europe, that can be potential trading partners.

With the slowdown in the European Union and United Kingdom, Yuvallos advised export companies to consider branding as an option and a coping mechanism.

“We are beginning to see good Cebuano brands in the international market like Cobonpue, Avatar and Dedon,” he noted.

“Branding, though, takes a long process that requires you to be smarter, more creative, and to understand marketing. Branding requires discipline. I’m not saying it is for everybody. But it’s an option,” he said.

Filed under: Business, ,

Group warns against brokers without licenses

Sun.Star Cebu <> Wednesday, August 27, 2008

BY NANCY R. CUDIS, Sun.Star Staff Reporter

PHILIPPINE Association of Realtors Board Inc.-Cebu Realtors Board Inc. (Pareb-Cereb) urged consumers to protect themselves from being deceived by demanding to see the license of the real estate broker and double-checking its authenticity in the roster of accredited brokers and salesmen under the Department of Trade and Industry (DTI).

“This is important,” said Pareb-Cereb first vice president and realtor Emily Amie Cabillada. “In cases of violations, clients can easily complain to DTI. If there is really a violation, the DTI can exercise its police power and impose penalties or even revoke the licenses of these brokers.”

She said Pareb-Cereb continues to urge developers to get only licensed brokers and salesmen to entertain potential buyers at their exhibits.

“Licensed agents know the law because they are required to attend seminars so they know what they are saying to their clients. They can also complain against consumers. Unlicensed ones may not have been updated with the latest news and regulations in the real estate industry,” she said.

DTI issued an administrative order last year prescribing new requirements for the licensing of real estate brokers, real estate appraisers and real estate consultants.

To update their knowledge, address the presence of unlicensed real estate agents and ensure compliance to the Real Estate Practice on Ethics and Standards, the DTI is urging property brokers to participate in the Comprehensive Real Estate Seminar (CRES) and become members of legitimate groups.

Pareb-Cereb recently conducted its 37th CRES to prepare applicants for the Broker’s Licensure Exam on Oct. 5.

Despite the accreditation system, Pareb-Cereb lamented the existence of many unlicensed real estate brokers in Cebu and across the country.

“But we are not adver-sarial. They are still partners but they just have to join us in the legal way. We each have an
identification card issued by the DTI,” she said.

The identification card issued by DTI to real estate brokers have to be renewed every three years.

Cabillada said, though, that Pareb-Cereb realized an increase in the number of members, which indicates a boom in the real estate industry in the province.

Filed under: Business,

Cebu businessmen raise birds for fun, inter-island racing

Sun.Star Cebu <> Wednesday, August 27, 2008

BY NANCY R. CUDIS, Sun.Star Staff Reporter

MOST women have to invent various ways to persuade or coerce their husbands to engage in hobbies (like gardening and cooking) that would enable them to spend more time at home and bond with the children.

But not the wives of 30 men, mostly businessmen, who have found joy in raising and racing pigeons. Like the pigeons that are known for their homing instincts, members of the Metro Cebu Racing Pigeons Association (MCRPA) have opted to stay at home.

While tending and racing pigeons are mainly for recreation, MCRPA members see plenty of opportunities for business.

MCRPA treasurer and STK Electronics manager Theodore Chiong Sy, for one, sells pigeons to fellow members. He imports his pigeons from Manila, Belgium and Taiwan.

Sy said that a pigeon, depending on breed, would cost “several hundreds to several thousands of pesos each.” In his case, he paid about P10,000 for every bird he bought from Manila and about P20,000 for those from overseas.

Loft

These pigeons are then housed in lofts, which would cost the owners “another several thousands of pesos,” depending on size and number of pigeons to be accommodated.

Sy said the small and simple loft for his 51 racing pigeons and 19 pairs of breeders is ideal for beginners.

MCRPA president Benny Lim of Yale Hardware and vice president Jojo Oquias of Agrianimal and Aviva Agrivet installed lofts worth more than P100,000 each to shelter 100 to 251 pigeons, separately.

MCRPA member Roberto Abarintos said taking care of pigeons and racing them is not only the hobby of the rich. This activity can also be participated in by all as one can raise a few pigeons and install a small loft, he added.

Oquias, who shares the passion for pigeon racing with 22-year-old son Miguel, said the activity is also a “clean hobby” for young adults.

MCRPA members sell racing pigeons to each other at prices ranging from P500 to P20,000, each, depending on the breed.

Races

But Sy, who originally came up with the idea of forming MCRPA, said that a one-year-old breeding pigeon and 25- to 30-day-old racing pigeons can already be sold since their homing instincts are not yet fully developed.

At the MCRPA annual fund raising and “just-for-fun” races, members can also win trophies, certificates and cash prices.

Next week, there will be four races from four south racing points—Dumaguete City in Oriental Negros, Dapitan City in Zamboanga del Norte, Ozamiz City in Misamis Occidental and Iligan City. In February 2009, there will be three races from northern areas—Naval in Leyte, Calbayog in Samar, and Masbate.

In a race, participants use a Global Positioning System device to measure distance. The owner of the pigeon that is able to cover the most number of yards per minute wins.

Members of the group whose ages range from 18 years old to 70 years old, said they find the activity exciting because their pigeons are faced with various challenges, like unpredictable weather, human and animal predators, and homing conditions.

The MCRPA appealed to the public, though, not to hurt the pigeons.

Filed under: Business,

Monitor manufacturer expects bigger market share by yearend

Sun.Star Cebu <> Tuesday, August 26, 2008

BY NANCY R. CUDIS, Sun.Star Staff Reporter

WITH the launching of its new widescreen LCD monitors, AOC Philippines hopes to increase its market share to 30 percent this year from 26 percent in 2007.

AOC executives are confident about meeting the target amid inflationary pressures affecting target consumers that include students, parents and young urban professionals.

Richard Ching, chief operating officer of Glee Electronics Inc., said the company expects the demand for LCD monitors for personal computers for home, office and Internet cafés to increase since the total cost of ownership of an AOC monitor is lesser compared to others.

Glee Electronics is the exclusive distributor of AOC products for Luzon with Microware Sales Inc. (MDR) as its counterpart in the Visayas and Mindanao.

“(The) customer buys an AOC LCD monitor at an affordable price (and) consumes less power in the course of using it,” he said.

AOC is a registered trademark and house brand under TPV Technology Limited, a display solutions provider and an Original Design Manufacturer (ODM) of computer monitors, desktops and LCD screens.

Martie Wei of TPV-AOC’s sales division based in Taipei said AOC was rated by international market intelligence provider IDC last year as the seventh brand of its kind worldwide.

Officials from Glee, MDR and TPV joined the presentation of AOC’s new product line to the Visayas and Mindanao market at the Casino Español last week.

The product line launching included the 22-inch Avio monitor that provides “premium picture quality” for graphics-heavy applications; 22-inch Zifas with a Z-shaped stand that can be mounted on the wall; 22-inch Rivio, which offers integrated media player so users can play music, videos and slideshows even when the PC is disconnected or powered off; and the 19-inch and 22-inch Toriba, which have “smile-curve” design and are equipped with proper cable management.

These entry-level monitors are categorized as “standard” for the budget conscious.

While the distributors have yet to announce retail prices for the monitors, they assured that the new products will be more affordable than the other brands.

The new units, which are covered by three-year international warranty, will be out in the market late next month or early October.

Filed under: Business,

Renovation almost done

Sun.Star Cebu <> Monday, August 25, 2008

BY NANCY R. CUDIS, Sun.Star Staff Reporter

THE management of the Cebu City Marriott Hotel announced it is business as usual, even though it is operating with much smaller space than before while more than half of the hotel building is undergoing half of a renovation plan.

Marriott Hotel started implementing a two-phase renovation plan in June. The first half involves 185 rooms, the lobby, lobby lounge and bar; restaurant; pool, pool bar; and al fresco dining area.

Marriott Hotel general manager Roy Abraham said that with only 38 percent of its room inventory, the hotel had to turn down some guests.

“But when we are done with this (renovation), people would not want to go anywhere else,” he said, adding that the first phase of the renovation is on schedule and will be completed by the end of next month.

As a result of the renovation, though, the hotel had to transfer the garden restaurant to one of the ballrooms and one function room was converted into a temporary reception desk.

Guests stay

Abraham said the hotel staff informs would-be guests about the ongoing renovation when they make reservations, but most of them decide on going ahead.

“The way the guests see it, they don’t see or hear the renovation going on. Some new guests don’t even know about it and think that the relocation of some facilities is actually part of the hotel,” Abraham told Sun.Star Cebu in an interview last week.

With the completion of the first phase, the second part of the renovation will begin right away. The second and last part of the renovation plan—which will affect 116 guest rooms, among others—is expected to be completed by December this year.

“This is one of the fastest renovations that will happen in only five to six months. Usually, it’s never done. This project is really part of our plan so we have to do it. If we stretch the renovation for a year and a half, the cost would be inconvenient.

Once done, we will have a stylish, hip, and modern hotel geared for business travelers,” Abraham explained.

He added that being a newly renovated hotel will add to their list of strengths that include location, brand name and great employees.

Business hotel

The renovation is in line with Cebu City Marriott Hotel’s positioning as a business hotel that caters to “24/7 achievers,” people who are driven to achieve their goals 24 hours a day, seven days a week. Marriott with its new look is expected to be fully operational by Dec. 31.

Marriott’s renovation also coincides with the ongoing development of a new segment at Ayala Center Cebu. The mall’s old lagoon area is being developed into additional retail space, entertainment area and landscaped garden. A portion of Ayala Center’s landscaped garden leads to Marriott.

Abraham said 90 percent of the furniture and fixtures in the new Cebu City Marriott are locally sourced. A few, however, had to be imported, like the carpet from China.

Some of Marriott’s suppliers include Cebu Fil-Veneer Corp. for hotel room furniture and Dedon for outdoor furniture pieces.

“Everything will be new. We now have new flat-screen TVs and Wi-Fi (wireless fidelity) in every room, new sinks, showers, beds, everything,” Abraham said. “In the end, they will come here and ask, where did you get that?”

He also disclosed the hotel’s plan to keep adding new technology in its pool of services, such as Internet Protocol Television (IPTV). Although it is still not known when the hotel will install IPTV in every room, he said the infrastructure for this particular feature will already be installed during the ongoing renovation work.

Abraham is confident that even with the operation of Sofitel Hotel—a property of the SM Group—and other future hotels in Cebu City, Marriott will retain its loyal customers and attract new ones.

“Bring it (competition) on. It is the customer who will decide. We have loyal customers who choose to stay in our hotel (during the renovation) even if they have a choice to go somewhere else,” he said.

Filed under: Business,

Store foresees bigger market due to growth in adventure tourism

Sun.Star Cebu <> Saturday, August 23, 2008

BY NANCY R. CUDIS, Sun.Star Staff Reporter

WANTING to take advantage of Cebu’s booming tourism and business process outsourcing industries, a supplier of outdoor equipment opened its sixth outlet at the Northwing of SM City Cebu last Wednesday.

The North Face shop’s expansion to Cebu after it first opened in Shangri-La Plaza Mall in Mandaluyong City in 2004 was partly attributed to the development of adventure tourism in the province.

“We see Cebu as a large market with many surrounding outdoor explorations and many outdoor groups,” said Jundel Llagas, marketing manager of Uniglobe Travelwear Co.

Uniglobe is the exclusive distributor of The North Face products in the country.

The North Face considers itself as a supplier of “authentic, innovative, and technically-advanced” exploration apparel, footwear, equipment and accessories.

The shop, said Llagas, caters to a certain niche market that knows the value and importance of high-quality gear. It generally targets anyone with appreciation of the outdoors and aspiration to participate in extreme sports, as well as anyone with an active lifestyle.

“We want to share this passion for the outdoors with those employed in the business process outsourcing (BPO) companies who may be highly stressed out in their work,” Llagas said.

He expressed confidence that The North Face will be able to tap the BPO market in Cebu since it employs about 300,000 persons. With the projected growth of the BPO industry in Cebu in the next few years, North Face expects to increase its market share as well.

The North Face’s top-selling product is equipment, followed by bags and outerwear, like jackets. Prices for bags would range from P1,990 to P19,000 while jackets are sold between P5,000 to P10,000.

While the company admits that North Face products are “pricey,” Llagas and product associate Ken Co of Uniglobe explained that they sell the “attributes and benefits” of using the items, which target buyers—Koreans, Japanese, and the local A and B market-would consider as an investment.

“One factor also that is overlooked is that Filipinos travel and they buy products to make their journey more convenient,” said Co.

Without giving any figures, he said that The North Face stores in the country experienced a combined “double-digit” growth rate in the past five years, which indicates that it has not been affected by inflation.

If its shop at SM City Cebu goes well, Uniglobe will study the possibility of opening another store in Cebu.

Meanwhile, The North Face bared plans to open another outlet at the SM Megamall in Metro Manila, to add to its existing outlets at Power Plant Mall and Glorietta 4 Ayala Center in Makati City, SM Mall of Asia in Pasay City, and SM City Davao.

Filed under: Business, , ,

WELCOME!

This is a personal site that contains my news articles on Cebu, local tourism, investments, real estate, small and medium enterprises, and many more! Some entries tackle personal thoughts and experiences as a business writer covering the Cebu business community. Enjoy your time here. And I hope to hear from you! -NANCY R. CUDIS

NRC: a Cebuano scribe


NANCY R. CUDIS writes for herself (a pastime), for her family (a source of income), and for the Cebu community (a sense of duty). For inquiries or invitations to cover events related to Cebu, you may contact her through her e-mail: nrcudis@gmail.com.

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