The Cebu Chamber of Commerce and Industry (CCCI) has issued a stark warning to local businesses, urging them to prepare for a difficult economic period in 2026 as multiple indicators show weakening performance across key sectors, particularly tourism.
Economic Pillars Under Pressure
In an assessment released as 2025 concludes, CCCI revealed that expected Gross National Product growth has slipped to 4.5 percent, representing a significant 26 percent reduction from earlier projections of 5.5 percent. The chamber framed its analysis around the five pillars of the Philippine economy, noting that four are showing clear signs of strain.
Tourism, which serves as a major driver of Cebu's economy, is expected to contract by 25-30 percent this year amid declining foreign arrivals and intensifying competition from neighboring countries. Vietnam, Thailand and Indonesia are capturing higher-value markets through superior infrastructure including better airports, safer transport systems and more predictable regulations.
The tourism slump is creating ripple effects across Cebu's economy, hurting airlines, hotels, island economies and thousands of small businesses that depend on visitor spending. The downturn also impacts Cebu's positioning as a meeting, incentive, convention and exhibition destination.
Export and Infrastructure Challenges
While exports appear steady statistically, CCCI identified a concerning strategic regression in this sector. Manufacturing output is declining while raw mineral shipments—particularly gold, silver and copper—are increasing their share. The chamber warned that once manufacturing supply chains leave the region, they rarely return, posing long-term risks to Cebu's furniture, electronics and shipbuilding industries.
Public spending, considered the economy's fifth pillar, is also under strain. The Philippines maintains relatively low debt compared to heavily indebted economies like Japan or the United States, but continues to suffer from weak execution in critical areas including utilities, transport networks, schools, hospitals and logistics infrastructure.
Policy reversals, redesigns and right-of-way issues create what CCCI describes as a governance tax that undermines investor confidence. The chamber emphasized that the core issue is not fiscal capacity but policy reliability, calling for improved execution across all government levels.
Remaining Strengths and Urgent Actions
The IT-BPM industry remains relatively stable, though CCCI noted emerging threats from generative artificial intelligence adoption overseas and rising incentives in competing countries like India, Vietnam and Malaysia. The chamber stressed that Cebu's competitiveness in this sector depends on upgrading digital infrastructure and workforce skills.
Overseas remittances continue to serve as the country's most reliable economic stabilizer, but CCCI cautioned that these flows mask deeper structural problems. The Philippines faces growing reliance on agricultural imports such as rice, now costing an estimated P300 billion annually, which heightens inflation risks for consumption-driven regions like Cebu.
Despite the challenging outlook, CCCI acknowledged that Cebu and the wider Philippine economy retain strong potential due to natural resources and a resilient population. However, the group strongly urged businesses to adopt a cautious approach as 2026 approaches, with contingency planning identified as the most prudent strategy to safeguard stability.
