Tourism, BPOs most affected by Cebu earthquake, BMI says

CEBU’s tourism and business process outsourcing (BPO) industries were the most disrupted parts of the province’s economy in the wake of the Sept. 30 earthquake, Fitch Solutions’ unit BMI said, though the impact on economic growth is expected to be minimal.

“We expect the overall GDP (gross domestic product) impact to be minimal, given the localized nature of the earthquake,” BMI Country Risk Analyst Brandon Ong said in a statement dated Oct. 6.

He noted that the damage estimates are smaller than those for major typhoons or the 2013 earthquake in Bohol.

“The recent Cebu earthquake damaged infrastructure, with the local government estimating at least P3 billion in damage or 0.01% of GDP,” Mr. Ong said, referring to the quake centered on northern Cebu island.

The 6.9-magnitude earthquake with an offshore epicenter killed 72, with Bogo City the hardest-hit municipality.

The National Disaster Risk Reduction and Management Council said the quake caused landslides, collapsed structures, fires, and chemical leaks. Images of cracked roads also circulated in the days after the quake.

“The sectors most likely to be affected are tourism, given reports of damage to cultural landmarks and hotels, and the business process outsourcing industry, which accounts for about 15% of the nationwide BPO workforce,” Mr. Ong said.

The Department of Tourism said several tourist destinations and hotels in Cebu were damaged including the Archdiocesan Shrine of Santa Rosa de Lima, the San Isidro Labrador Church, the Museo Sugbo and the NUSTAR hotel.

The BPO industry’s labor practices have come under the spotlight after evening-shift workers were ordered to return to work shortly after the tremor, while others were allegedly threatened with sanctions if they did not show up for work in the days after Sept. 30.

The Department of Labor and Employment in Region 7 cited a BPO after finding that it lacked disaster preparedness plans. — Aubrey Rose A. Inosante