Central Visayas’ financial resources tackled in summit

Local

CENTRAL Visayas has P874 billion in bank deposits that could help finance business expansion and investment, but lending figures point to room for the region to channel more of its financial resources into local economic activity.

Dr. Gregorio E. Baccay II, bank officer at Bangko Sentral ng Pilipinas (BSP) Cebu Regional Office, presented the figures during the 2nd City of Talisay Business Summit 2026 at Robinsons Galleria Cebu on Tuesday, Oct. 27.

Baccay said Central Visayas recorded P874.27 billion in bank deposits, equivalent to 3.94% of the country's total deposit liabilities in the first quarter of 2026.

However, the region's loan-to-deposit ratio stood at 53.1% in 2025, indicating that the value of reported loans remained considerably lower than the deposits held by banks.

The ratio measures how much banks lend relative to the deposits they receive.

While it does not establish that the remaining funds are idle, Baccay said the region could explore ways to maximize available financial resources to support enterprises and investment.

“There are resources in Cebu, in Talisay, in the region that we can maximize,” he said.

The region's loan-to-deposit ratio increased from 46.1% in 2022 to 53.8% in 2023, before declining to 51.9% in 2024 and recovering to 53.1% in 2025.

Talisay City showed an even lower ratio, with banks holding P23.988 billion in deposits as of June 30, 2026, while outstanding loans reached P7.862 billion. This translated to a loan-to-deposit ratio of 32.78%.

The figures highlight the potential to strengthen the connection between the region's banking resources and the financing needs of businesses, although the ratios alone do not show where banks deploy funds outside their local lending portfolios.

Baccay said Central Visayas could improve its economic prospects by strengthening connections among industries and enabling local enterprises to supply the needs of larger businesses.

Manufacturers, for instance, could reduce production costs by sourcing raw materials and other inputs from local suppliers instead of relying entirely on imports.

This could also create opportunities for micro, small and medium enterprises to participate in manufacturing supply chains.

Tourism could generate additional demand for local farmers, food processors and other businesses, while digital financial services could help enterprises operate more efficiently.

Baccay said the region's long-term economic prospects would depend on its ability to expand industries, improve productivity and address structural constraints that increase business costs.

He also encouraged business leaders to look beyond the availability of banking services and consider whether financial products are accessible and affordable to the people and enterprises that need them.

Central Visayas had 788 banks, including 656 in Cebu and 132 in Bohol, according to his presentation.

The region also had 1,744 automated teller machines, with 82.7% located in Cebu and 17.3% in Bohol. Talisay had 44 ATMs, comprising 19 on-site and 25 off-site machines.

However, Baccay cautioned that a higher number of banking offices does not automatically translate into better financial inclusion, which also depends on customers' distance from branches, the affordability of services and their ability to access and use financial products.

Despite the region's financial resources and business opportunities, Baccay identified infrastructure deficiencies, logistics bottlenecks and rising operating costs as major threats to sustained economic growth.

Poor road connectivity, congestion and limited cargo links increase transportation expenses and delay deliveries, making it more expensive for businesses to move goods and obtain production inputs.

Dependence on imported materials also exposes companies to external price movements and higher fuel and shipping costs.

Baccay said these constraints must be addressed to help businesses become more competitive and allow local industries to benefit more fully from available financial resources.

Inflation remains another concern. His presentation cited headline inflation of 8.3% in Central Visayas, compared with 7.2% nationally.

He attributed the price pressures to factors including higher global oil prices, increased transportation fares and the risk that El Niño conditions could disrupt agricultural production.

Because Cebu and neighboring provinces rely on food shipments from other areas, disruptions to agricultural supply and transportation could further affect prices and business costs.

Baccay said the BSP could use monetary policy to influence demand and anchor inflation expectations, but addressing supply-side problems would require complementary government action.

“It must be a whole of government approach,” he said.

His presentation projected headline inflation at 6.1% by the end of 2026 and 6% in 2027, before easing to around 3.3% in 2028.

Baccay also identified energy reliability, agricultural vulnerabilities, workforce shortages and cybersecurity threats as emerging risks that could undermine Central Visayas' economic prospects.

Power reliability remains a concern for businesses that depend on stable electricity to sustain operations.

Energy disruptions or higher power costs could add pressure to companies already dealing with expensive logistics and production inputs.

Agriculture also faces vulnerabilities from weather-related disruptions and animal diseases, which could affect food supply chains and the availability and prices of agricultural products.

The region must also address shortages of skilled workers, particularly engineers, technicians, digital professionals and cybersecurity specialists, as businesses expand and adopt new technologies.

Baccay said some industries were struggling to retain employees, including banks seeking frontline personnel and compliance officers.

He noted that younger workers sometimes leave frontline banking jobs after only a few months to pursue other opportunities.

Workers are also moving between industries, with some leaving agriculture for construction and business process outsourcing jobs.

Such labor shifts could make it more difficult for businesses to find and retain the personnel they need to support expansion.

Meanwhile, the growing use of technology in business operations has heightened concerns over online fraud and cybersecurity risks. Companies and financial institutions must protect digital transactions and customer information as they adopt more digital services.

Baccay said the region's ability to sustain growth would depend not only on demand but also on its capacity to address these structural weaknesses.

Despite the challenges, Baccay said business leaders remained generally optimistic about Central Visayas' economic prospects, although operating conditions were not expected to become easier.

Manufacturers anticipated sustained demand from the expansion of semiconductor and artificial intelligence-related industries.

Hotel operators expected domestic and international tourism to continue supporting growth, while retailers anticipated resilient household spending, particularly on essential goods.

Financial institutions also projected continued demand for credit and digital financial services.

Baccay said businesses that control costs, adopt digital tools and remain responsive to customer behavior would be better positioned to navigate an uncertain operating environment.

He identified efficient logistics, resilient agriculture, a skilled workforce, reliable energy and secure digital payments as important factors in strengthening the region's long-term competitiveness.

The three-day City of Talisay Business Summit 2026 opened on October 26 with discussions on tourism and investment, including efforts to promote Talisay as a historical and culinary destination.

Talisay City Mayor Gerald Anthony “Samsam” Gullas Jr. delivered the keynote address during Tuesday's Business and Economic Growth Day, which brought together government officials, business leaders and industry stakeholders to discuss investment opportunities and economic development.(MyTVCebu)