Cebu’s small and medium enterprises

Cebu’s small and medium enterprises

by UA&P News Desk on November 26, 2010 - 5:04 pm

From, Cebu Daily News, by Fernando Fajardo

Cebu City aerial view

Cebu is less than 2.0 percent of the entire Philippines in surface area. Despite its size, it accounts for 4.9 percent of the total population and 10 percent of the exports. It also has more than one million tourists, which means that about half of the country’s visitors also choose to come to Cebu.

Cebu’s large population means that it could support a good number of small and medium enterprises (SMEs). In fact, long before the last population count in 2007, at the time when Cory Aquino began her presidency in 1986, Cebu already had close to 3,000 small and medium enterprises with estimated assets of about P5.5 billion, sales of P12 billion and total employment of about 180,000 workers. This was reported in a study by the Cebu office of the Center for Research and Communication (now University of Asia and the Pacific). With more openness that came with the Cory administration and membership of the Philippines in the World Trade Organization in 1995, these numbers must be much larger by now.

The CRC study identified the five key SMEs in Cebu as: furniture making, food processing, garments, gift, toys and fashion accessories (GTFAs) and house wares and metalworking. Furniture, GTFAs and house wares were touted as Cebu’s export winners because of their high export potential and strong backward linkages through subcontracting. The study found that the intensity of subcontraction was as high as one contractor to 100 sub-contractors in some firms engaged in fashion accessories and 1:15 in some rattan furniture firms. The average was 1:4 in furniture production, 1:3 in fashion accessories, and 1:2 in garments.

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Photo: “Cebu City Center” by Storm Crypt on Flickr under CC BY-NC-SA 2.O Generic license
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