Cebu moves up to join top ten international list of emerged destinations for BPO

Cebu City has moved up in the ranking of global sites for business process outsourcing (BPO) and information technology.

”From its 2009 status as the no. 1 “emerging BPO destination” in the world, Cebu City is now in the next category of “emerged” destinations in 2010, grabbing the ninth spot in the list of top 10 Emerged Destinations for BPO.”

The upgrade in category, which reflects a maturing industry that employs about 50,000 workers in Cebu, was announced yesterday by Joel Mari Yu, managing director of the Cebu Investments and Promotions Center (CIPC).

The ranking was made by Tholons, an international outsourcing and investment advisory firm, and will be reflected in its 2010 annual survey.

Tholons’ assessment will spur more growth for the industry in 2011, said Yu.

“When a BPO company looks for a place to expand, it always refers to the ‘emerged’ list where Cebu is now included. We can only expect more growth from this industry as early as today even and more next year,” Yu said.

Jonathan Defensor de Luzuriaga, Tholons managing director for Southeast Asia, confirmed the upgrade.

He said Cebu is in the ninth spot in the list of top 10 Emerged Destinations for BPO.

“In the list, only two entries are new, which includes Cebu and Shanghai for ninth and tenth places, respectively,” De Luzuriaga said.

“Manila” or the National Captial Region is already in the list and ranks fourth place. The top spots are taken by cities in India.

He said the results of the 2010 survey were presented by Tholons officers in their meeting in their Manila office about 2 a.m. yesterday. He couldn’t say when the full results would be posted but the next survey would be released in 2011.

For a city to be declared an “emerged” destination for BPO and IT, it has to pass six assessment criteria, which included talent, business environment, cost, infrastructure quality and risks.

If the city fails to meet any of the criteria, it may land in the list of “emerging destinations,” said De Luzuriaga.

In 2009, the top global outsourcing sites according to Tholons were Bangalore, Delhi and Mumbai (all in India) followed by Manila or NCR.

Yu explained that to be in the “emerged” list, the city should have a good supply of quality talents as well as the quality and quantity of facilities. Another criteria is presence of infrastructure support such as broadband network services, as well as government incentives.

“Cebu has been the top emerging city for BPO and IT for the last couple of years. We have been working to be in the “emerged” list. Now that we have it, I could only say that we have a bright future ahead of us for this industry,” Yu said.

Cebu ranked first in the list of 50 emerging global outsourcing cities by Tholons in the 2008 and 2009.

Even before yesterday’s announcement was made, at least three major BPO players had plans to expand in Cebu, said Yu.

“J.P. Morgan Chase is already with us and they have already said that they will be expanding and adding more people. IBM is already here and Accenture will be adding another delivery center in Cebu. These are only three of the biggest names. We are expecting more big names to come here,” he said.

The growth in demand will come from both voice and non-voice services in Cebu because of the availability of a very wide pool of talents in various disciplines and education backgrounds, said Yu.

“Now we have more non-voice companies. There are 40 companies with non-voice services while there are only 29 voice or call center companies here now,” he added.

According to Yu, Cebu has a big potential for non-voice services such as medical transcripition, banking, accounting, legal services, and higher end programming services.

Yu said Cebu City is the only city in the country that is taking steps to ensure a steady supply of talents for BPO and IT by putting up training programs tied with BPO companies like Aegis People Support and IBM.

Most BPOs are located in the Asiatown IT Park in Lahug.

The support of the Cebu city government for BPO growth includes plans for a Masters in Business Administration (MBA) program geared for BPO and IT workers.

Last year, Rep. Tomas Osmeña of Cebu City south district, who was then Cebu City mayor, announced a “green field” project for an MBA campus at the South Road Properties.

Cebu City donated five hectares of land to the University of the Philippines for it to set up a campus offering MBA programs that would enable BPO and IT employees to pursue degrees while they’re working and earn more credits for future career advancement.

Yu said this kind of initiative from the local government in partnership with the private sector will help bring in more growth for the BPO industry as well as Cebu’s economy.

About 40,000 to 50,000 people are employed in BPOs in Cebu based on figures of the Cebu Educational Development Foundation for Information Technology (Cedfit). (CDN)



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Cebu tops other PHL cities for its biz-friendly reforms

Cebu City emerged as the “star” city to have adopted reforms in providing conducive environment in doing business in all 20 cities in the Philippines, this according to a study conducted jointly by The World Bank and International Finance Corporation (IFC).

In the last three years, Cebu City has implemented reforms especially in implementing easier requirements in starting a business, lessening the cost of construction permits, and employment of full computerization specifically in the Registry of Deeds.

However, although Cebu City has implemented reforms and improved its regulations in making it easier for businesses to open or start a business, it has to work more to be competitive with the rest of the world, said Mierta Capaul, Global product specialist, Sub-national doing business of The World Bank and IFC.

Capaul and other officials of the IFC and The World Bank and local counterparts were here in Cebu to present the result of the 2008 result of “Dong Business in the Philippines” survey, to stakeholders as well as to present similar program that will be started in 2011.

According to Capaul, although Cebu City has done a good job in lessening the number of requirements for starting a business, and other necessary documentations especially in real estate related investments, it has to coordinate closely with the national government in order to further lessen the paper requirements, and time in completing any documentary process.

The Philippine Cities, including Cebu City, also has to benchmark with other countries, how they are able to attract investment and provide easier process in starting a business, such as in New Zealand, of which it is only requiring one procedure in online access, which makes it less costly and time-friendly.

Although, there are reforms implemented by Philippine Cities in terms of procedures in doing business, specifically in the local government level, the average 15 to 22 procedures are not business friendly and most of all costly.

In the Philippines, Capaul said unless human-interaction will be lessen, bribery is still rampant. “Each time there is an interaction-- there is a big possibility of bribery.”

Thus, the use of full automation in the processing of new business registration, permit, among others is highly recommended to lessen the possibility of corruption and bribery at the same time hasten the number of procedures.

The study noted also, that in the Philippines, only the reforms created by the local government units (LGUs) have been implemented, while the national government still has to implement a program to cut off the bureaucracy and processing procedures, Capaul said.

In Cebu City, one of the outstanding programs it has implemented is the joint coordination with the Cebu City government, and national agencies in providing the one-stop-shop business registry called NERBAC (National Economic Research and Business Action Center).

Over the past two years, 13 out 20 cities in the Philippines carried out 19 regulatory improvements to make it easier to start and operate a business in their localities.

The “Doing Business in the Philippines 2011” is a joint IFC-World Bank report, is the second in a series analyzing business regulations from the perspective of a small to midsize domestic firm in Philippines cities. Five cities were added this year, bringing the total of 25 cities.

Doing Business in the Philippines 2011 documents the wide variations in local business regulations across the country. The high numbers of procedures, expenses, and requirements continue to be the biggest challenge for local entrepreneurs.

The study was conducted in partnership with the Asian Institute of Management Policy Center. It was funded by the Australian Agency for International Development, the Canadian International Development Agency (CIDA), the United States Agency for International Development and the Investment Climate Advisory Services of the World Bank Group. (The Freeman)

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Philippines bests India as No. 1 BPO

After challenging India for the top position for several years, the Philippines is now the world leader in business support functions like shares services and business process outsourcing, according to the latest reports and trends analysis.




In fact, the country overtook India in these categories last year, according to IBM’s latest Global Locations Trend Annual Report, released recently in New York.

India now ranks No. 2, the first time it was not in the leading position for these activities, according to the IBM report, launched in October but made available online last month.

The IBM report said the Philippines offered a similarly attractive business environment for international business support functions as India. Unlike India’s BPO hot spots, however, labor costs here have not increased as much.

The Contract Center Association of the Philippines said the country had become the call center of the world, with around 350,000 Filipinos working in call centers against India’s 330,000-strong workforce.

Revenues from the country’s call center industry are also expected to reach $5.7 billion this year, higher than India’s $5.5 billion, the CCAP said.

The call center industry, which provides so-called “voice” services like customer support and sales, is part of the BPO industry.

Call centers make up 70 percent of the BPO industry in the Philippines.

Currently, there are 600,000 Filipinos employed in the country’s BPO industry, according to the Business Processing Association of the Philippines. (PDI)



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Dumaguete now in top 10 BPO Next Wave Cities

Baguio and Dumaguete are the new entrants to the top 10 best outsourcing locations which are projected to generate $ 1.2 billion in revenues for business process outsourcing (BPO), bringing the industry’s total earnings to $ 9 billion in 2010 from $ 7.2 billion last year.

Davao City topped the list as it scored 99 percent in the availability of graduates and workers out of the more than 30 locations assessed, results of Next Wave Cities scorecard revealed.

The talent criterion carries the largest weight of 40 percent in the overall ranking which makes the city the best outsourcing destination in the country so far.

Sta. Rosa, Bacolod, Iloilo, Metro Cavite, Lipa, Cagayan de Oro and Malolos also topped the scorecard ranking of the Business Processing Association of the Philippines (BPAP), Commission on Information and Communications Technology (CICT) and the Department of Trade and Industry (DTI).

In addition to talent, the other factors affecting city ranking are infrastructure, cost and business environment.

In particular, cities are scored for the quality of their roads, access to international and domestic flights, presence of providers of fiber optic networks, reliability of power supply, availability of property sites, cost of labor and office space, vulnerability to natural disturbances, peace and order situation, among others.

BPAP chief executive officer Oscar Sañez said that in 2010, Metro Clark advanced from Next Wave City status to an established information technology (IT)-BPO hub, joining the ranks of Metro Manila and Metro Cebu.

Sañez attributed this to Metro Clark’s excellent infrastructure with 100-percent rating, proven ability to market itself globally and its ability to provide investor assistance.
Bulacan East and Bulacan West this year were also consolidated into Malolos area.
The two slots earlier occupied by Metro Clark and Bulacan thus were filled up by new entrants Baguio and Dumaguete.

Apart from the top 10 best outsourcing locations, Sañez identified other aspirants as Dagupan, Legazpi, Metro Subic, Metro Naga and General Santos.

Gigi Virata, BPAP’s information and research director, said sites included in the list of Next Wave Cities are the focus of their promotion efforts.

Virata said these cities would have some advantages when they also market themselves to the media and the investors.

For his part, Sañez said the Next Wave Cities program provides a great avenue for local empowerment.

He said these cities will increase talent pool and stem salary and rental inflation in “first-wave” locations.

“Having 10 Next Wave Cities and more will ease the pressures to raise salaries and rental rates in these major hubs, and spread the benefits of employment, higher incomes and increased business activity across the country,” he noted.

As of end-2009, there were about 442,000 employees in the Philippine IT-BPO sector.
Virata estimated that the identified top locations for outsourcing could generate an additional 265,200 employment in the next two years.

Commission on Information Communications Technology (CICT) Secretary Ray Anthony Roxas-Chua III said the Commission is fully committed to the Next Wave Cities initiative of championing regional growth through ICT.

“These Next Wave Cities will continue to be our rallying points where, given the impetus and the correct resources, will spur economic growth the way this government has envisioned to be. We see prosperous cities in regions across the nation as a result of their maturity and readiness to compete in the IT-BPO arena,” he said. (PNA)

 

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