Visayas logistics sector growing, players urged to innovate - economists

SINGAPORE — Despite inflation, peso depreciation, and the global slowdown, logistics continues as a standout growth sector in the Visayas, and economists urged industry stakeholders to embrace innovation to boost its growth.

Experts from the University of Asia and the Pacific (UA&P), in a recent economic briefing in Cebu, expressed confidence in the island province’s prowess amid economic pressures mainly brought by the now-winding-down Middle East war.

In fact, they described the island province as “one of the country’s most diversified regional economies.”

READ: Better logistics, food supply key to cooling Central Visayas inflation

Cebu’s manufacturing output is more than double the national average in proportion to its economy.

For UA&P senior economist Dr. Winston Conrad Padojinog, this meant a structural advantage that continues to anchor the region’s growth even as the broader Philippine economy slowed to 2.8 percent in the first quarter of 2026.

“Unlike the Philippines, which is experiencing a hollowing out of its industrial sector, Cebu continues to maintain a very robust industry and services sector, especially industry,” Padojinog told members of the media.

Growing logistics sector

Openness to trade may have exposed Cebu to market volatility, but it has barely dented its strength as a logistics, transportation, and trading hub for the wider Visayas.

“Anything related to wholesale, retail, trade, transport, and logistics will be doing very well. Whether prices are high or low, we still need to move goods across islands,” Padojinog said.

To drive his point further, the economist cited UA&P research findings indicating that the logistics sector in the Visayas, led by Cebu, continues to expand, supported by increasing inter-island trade flows.

READ: Central Visayas inflation for April highest in PH, at 10.8%

Growing consumer activity has also bolstered this upward trend, he added.

Part of Cebu’s advantage lies in its geography.

Padojinog noted that imported goods arriving at major ports, whether in Batangas or Cebu, are redistributed to the other islands of the Visayas and portions of northern Mindanao, making Cebu an indispensable node in the country’s supply chain architecture.

“Cebu has a very vital role as far as the other regional economies are concerned,” he said.

READ: PH economy seen to grow by 3% this year

Likewise, the economist emphasized that logistics was recession-resistant by nature.

In other words, demand does not disappear when prices rise, because goods must still move across the archipelago regardless of economic conditions.

Innovation key to sustaining growth

Despite the sector’s resilience, experts warned that sustained growth will require deliberate innovation from industry players.

That’s why Padojinog urged industry players as well as stakeholders to embrace digital integration, citing the increasing use of transport network vehicle services (TNVS) apps, third-party delivery platforms, and social media as e-commerce channels to accelerate growth.

“More and more companies make use of TNVS to deliver. What they do also is tie up with digital apps for delivery and sales,” he said.

Social media, in particular, has increasingly become a direct commerce platform that logistics providers must learn to serve.

He also encouraged businesses to pursue upstream and downstream value chain integration, moving beyond pure transport into sourcing, warehousing, and last-mile retail delivery as a way to capture more value and build scale.

“You just don’t produce, you already start distributing. And from distribution, you start retailing,” Padojinog said.

Gaps

Dr. Bernardo Villegas, UA&P co-founder and economist, meanwhile, flagged the logistics gap in agribusiness as an area ripe for investment, noting that post-harvest losses remain a significant drag on agricultural value chains.

“You may have the most productive vegetable farm in Benguet. By the time the produce reaches Manila, 30 percent are already lost — and that’s before you even factor in transport costs,” Villegas said.

The observation carries direct implications for the Visayas, where farm-to-market connectivity remains uneven across provinces, and where food inflation has been among the sharpest in the country.

Both economists agreed that infrastructure investment, particularly in roads, ports, and digital connectivity, remains the most critical enabler for long-term logistics growth in the region.

“The more roads available, the more vehicles are purchased, and the more goods move,” Padojinog said.

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