BPOs and tourism drive Cebu’s growth

Despite fears of adverse impact on the Philippine economy due to the US and Europe debt concerns, Ayala Land Inc. (ALI) group of companies remains bullish over real estate prospects in the Visayas and Mindanao where it would be investing about P20 billion in this year and in the next two years.

"We are still very bullish about the market and economy in Cebu despite what you heard about the US economy and Europe debt problems. Cebu is shielded from that," says Francis Monera, ALI vice president and president of ALI subsidiary Cebu Holdings Inc.

Monera says the current growth drivers in Cebu were the win-win industries of tourism and business process outsourcing.

Cebu ranked third in total tourist arrivals in 2010 with its 1.77 million visitors, 712,400 of whom were foreigners.

More than 100 IT-BPO firms operate in Cebu City, with 60,000 direct employees and $720 million in annual revenues in 2010.

"Cebu is strong in terms of OFWs (overseas Filipino workers) and the retail.

Putting this together, we are looking at the economy that's going to be vibrant," he says in a recent interview.

For this reason, Monera says the Ayala group would be putting in more investments in Cebu.

"We feel that Cebu is where we should put more of our financial resources," he adds.

The Ayala group's investments in Cebu would reach P10 billion starting this year and in the next two years, according to Rico Manuel, chief finance officer of ALI Visayas and Mindanao.

About 50 percent of the P10 billion would be spent this year on several projects including the Ayala Center Cebu expansion that costs P2 billion, Manuel says. Half of the P10-billion funding would be spent in 2011.

The other projects in Cebu are the Alveo Condominium's Sedona Parc, 1016 Residences of the Ayala Land Premier, Avida Tower 1 and 2 in AsiaTown IT Park, e-Bloc 2 and Amara's The Parks.

Monera also notes that the Amara, a residential project undertaken by CHI and Coastal Highpoint Ventures (CHVI), has appreciated in value.

"When it was first launched, the average price per square meter of Amara was P9,800. Now, it's P20,000 per square meter," he says.

The Parks is the latest phase of the Amara, which is located on a 46-hectare property in Barangay (village) Catarman, Liloan, 18 km north of Cebu City.

Monera says CHI has allocated P200 million for the fifth phase of the Amara, which has a total project cost of P1 billion. The Amara carries the Ayala Land Premier brand which is set only for renowned communities such as Ayala Alabang, Forbes Park and Dasmariñas Village in Metro Manila.

Monera says that the ALI group also sees bright prospects in other areas of the Visayas and Mindanao, where they have several projects.

In the next two to three years, Ayala would be investing between P3 billion and P5 billion in Bacolod City in five subdivision projects (Ayala North Point, Plantazionne Verdana Homes, Verdana Homes Asyana, Avida NorthPoint and Amaia Scapes NorthPoint), Ayala Northpoint Retail, Ayala Northpoint Technohub and in its project at a property owned by the Negros Occidental provincial government.

In Iloilo, Ayala would be putting in between P300 million and P500 million for the construction of Avida Village and a BPO facility.

On the other hand, Ayala group would spend P4-P5 billion in the next three years in Davao for three projects, Abreeza Mall, Kukun Hotel and the Abreeza BPO facility that would be an extension of the mall.

In Cagayan de Oro, Ayala group's projects, Centrio Mall, Kukun Hotel and Alegria Hills, would cost P3-P4 billion over three years, starting this year, Manuel says.

Inquirer Visayas
04 September 2011
By: Irene R. Sino Cruz