Cebu’s Outlook For 2025: Poised For Sustained Growth, But Energy Capacity Remains Key

Cebu is off to a strong start in 2025, poised to capitalize on the strength of its tourism, manufacturing, and business process outsourcing (BPO) industries.

Cebu’s compelling growth story is driven by its diversified economy, anchored in tourism, IT-BPM, and manufacturing.

Riding the momentum of its steady post-pandemic recovery highlights the province’s resilience amidst challenges.

After experiencing a slowdown in 2020 due to the COVID-19 pandemic, Cebu’s economy rebounded, achieving 5.4% growth in 2021. This expansion continued with 5.0% and 6.0% growth in 2022 and 2023, respectively.

In 2023, Cebu Island hit a significant milestone with its Gross Domestic Product (GDP) reaching ₱1.01 trillion, representing 73% of Central Visayas’ total GDP. According to the Philippine Statistics Authority (PSA), the City of Lapu-Lapu recorded the fastest growth at 9.4%, followed by the City of Cebu at 8.3% and the City of Mandaue at 7.3%.

Tourism and IT-BPM as Key Growth Drivers

Tourism remains a vital growth driver for the region. In 2024, Cebu hosted three million tourists, generating ₱38 billion in receipts by September.

While this fell short of the 7.7 million target for inbound visitors, the Department of Tourism reported a 10% increase in tourist arrivals compared to 2023, rising from 5.45 million to 5.94 million.

According to insights provider BMI, the Philippines is projected to welcome 8.3 million tourists in 2025—a 38.4% year-on-year increase. Cebu, with its attractive tourist destinations and strategic location as a key entry point, is well-positioned to benefit from this growth.

The ongoing improvements and expansion of Mactan-Cebu International Airport are set to enhance Cebu’s standing as a major transit hub in Southeast Asia, further attracting visitors and boosting economic activity.

The IT and business process management (IT-BPM) sector is another significant contributor to Cebu’s growth.

Employing over 121,000 professionals and generating $32.5 billion in revenue in 2022, the industry remains optimistic about attracting investments due to Cebu’s business-ready infrastructure and skilled, English-speaking talent.

Global demand for outsourced services continues to rise, with the IT and Business Process Association of the Philippines (IBPAP) estimating industry revenues will reach $38 billion in 2024.

IBPAP President Jack Madrid expressed confidence in the industry’s growth for 2025, despite challenges such as global competition and high operational costs.

Office Spaces and Residential Developments

Cebu continues to shine as a premier IT-BPM hub outside Metro Manila, driven by its top-tier office spaces and lower operating costs.

Global real estate services firm CBRE reports that Cebu has 238,700 square meters of available office spaces, with Cebu I.T. Park leading the pack at 103,100 square meters, followed by Cebu Business Park at 58,500 square meters, fringe areas at 52,800 square meters, and Mactan at 24,400 square meters.

Upcoming developments, including the Mabolo IT Park and Robinsons SRP IT Park, will add 80,000 square meters of office space, catering to the growing demand fueled by the Digital Cities 2025 roadmap.

This initiative, a collaboration between the Department of Information and Communications Technology, IBPAP, and Leechiu Property Consultants, aims to transform cities like Cebu into prime investment destinations.

Cebu’s residential market is also thriving. Major property developers remain confident in the sector’s performance for 2025, with plans for large-scale residential projects, mixed-use townships, and vacation rental properties.

Manufacturing and MSME Growth

Cebu’s diverse manufacturing sector significantly contributes to its economy, with industries ranging from electronics and furniture to food processing and shipbuilding. Cebu’s strategic location, skilled workforce, and competitive labor costs make it a magnet for manufacturing investments.

The province hosts 8,996 manufacturing establishments as of 2021, with the highest number in Central Visayas, according to PSA data. Additionally, Cebu is home to 48 ecozones registered with the Philippine Economic Zone Authority (PEZA) as of 2023.

Cebu also fosters micro, small, and medium enterprises (MSMEs) and startups, thanks to a vibrant economy and government initiatives that provide financing and mentorship opportunities.

Energy Security: A Critical Factor

Cebu’s sustained economic growth depends on a stable and affordable energy supply. The widespread power outage in Panay Island in January 2024, which resulted in ₱3.8 billion in losses for Iloilo over four days, underscored the importance of energy security.

To address this, Governor Gwendolyn Garcia has prioritized improving Cebu’s energy capacity. "If we are to match the phenomenal growth that Cebu is experiencing, we must seriously focus on generating more capacity,” Garcia said during an energy forum last year.

Pending projects such as the Cebu-Panay-Negros transmission line and three solar farms under development in Daanbantayan, Dumanjug, and Toledo aim to bolster the region’s power supply.

Additionally, Therma Visayas Inc. (TVI) has announced plans to expand its capacity with a third unit to meet Cebu’s rising energy demands.

Conclusion

Cebu’s compelling growth story is driven by its diversified economy, anchored in tourism, IT-BPM, and manufacturing. As the province addresses energy security challenges, it positions itself as a leading economic hub in the Visayas, unlocking opportunities for progress and improving the quality of life for Cebuanos.