Outsource sector still Cebu’s key economic driver
The outsourcing industry continues to drive Cebu’s economy this year with 17 new foreign business process outsourcing (BPO) locators setting up shop in IT parks in Cebu and Mandaue cities.
The new locators added at least 11,000 jobs to the estimated 75,000 BPO directly-hired employees in 2011. This increases the total employees in the industry to at least 86,000 this year, said Joel Mari Yu, Cebu Investments and Promotions Center (CIPC) managing director.
The figure, however, didn’t account for the expansions by existing companies in Cebu like Accenture Philippines and Stream Global Services, Inc. which both recently opened their third delivery centers in Cebu.
90,000 workers
“If you put in an estimate, I’d say we are already hitting 90,000 directly hired people in the industry including the expansions which we could safely say to be at least 5,000 jobs this year,” said Yu.
With the 17 new locators added to 81 outsourcing firms, the BPO companies in Cebu number 98 this year.
“The average growth of the industry is about 15 percent which mirrors that of the industry growth in the country. That is a very robust growth,” said Yu.
Gregg Victor Gabison, Cebu Educational Development Foundation for Information Technology (CEDF-IT) president, agreed.
bullish
“The year 2012 was really bullish. We were able to validate our being 9th in the outsourcing IT-BPO global destinations. We got good placement of graduates, more new players setting shop here in Cebu City, and warm assistance from the government, resulting in an ideal ecosystem,” Gabison said.
“This, of course, is realized with the help of the different sectors, industry, government and academe. Though we had our own share of problems like the closure of a very few IT companies, these were only part of the hazards, as we go through such exercise. At least every problem encountered becomes a learning experience,” he said.
Non-voice sector
Most of the 17 companies are from the non-voice sector.
Yu said that this was an indicator that Cebu was already seen as a destination for higher value skilled manpower.
Only two of the new firms are call center companies which are Japanese majority-owned Asian Global Creation Philippines, Inc; and Singaporean firm Quest Rightshoring Services Pte. Ltd. Philippines branch
office.
Five companies are softward developers. Two handle backoffice processes, the others are engaged in IT-enabled services, engineering, architectural and other design services, IT research and development. One handles multi-media graphics, animation, and
printing.
BALANCED
“This is something we should be happy about because it makes the industry more balanced, thus more resilient to any economic adversities in the future because if we have more voice-based companies, we would be very dependent on the US market. With the new companies coming in, we see a diverse industry catering to many other markets. We now have Japan, Singapore, Australia and Great Britain,” said Yu.
The 17 firms are located in Mandaue and Cebu Cities.
In Mandaue, there’s the KRC IT Zone and AD Gothong IT Center.
Cebu City has the Cebu IT Park, Crown 7 IT Center, Cebu Business Park, Robinland IT/BPO Center, Robinsons Cybergate Cebu, and JY Square IT Center
fueled the growth
According to Gabison, the robust growth is an indication that Cebu stakeholders are doing something right in creating an “enabling” environment for investors.
“It’s more about the natural commitment of everyone. The academe continues to produce graduates and closely works with industry and likewise the industry reaches out to the academe,” Gabison said.
BETTER ECOSYSTEM
“Then the city and provincial government is setting up policies and schemes to facilitate technology and business creation, resulting in a better ecosystem,” he said.
Yu said investor confidence in President Benigno Aquino III’s administration influences this growth as well as it stimulates interest in the Philippines and particularly
Cebu.
2013 PLANS
According to Yu and Gabison, if 2012 saw robust growth, 2013 will see more growth.
“We expect more to come next year especially if the government can maintain investors confidence in the administration. We see a lot of growth next year not only in the outsourcing industry but other industries like manufacturing,” said Yu.
Gabison said that they forsee exciting developments in the non-voice space with IP-creation or KPO (knowledge process outsourcing) in the global delivery of IT services.
Gabison said he was expecting continued job placements and new companies setting shop in
Cebu.
Department of ICT
President Aquino has not approved proposals to set up a Department of ICT but Gabison said having one would lead to more growth by having the department focus on initiatives that would create an enabling environment around the country.
“I am still positive that the creation of a Department of ICT will be realized. It can really provide the needed push, if we are to realize our road map for 2016. But despite this absence, the IT industry will continue its growth. But it will grow by leaps and bounds if this is actually undertaken,” said Gabison to set priorities and policies.
He cited as a “classic example”the controversy over Republic Act 10175, also known as the CyberCrime law.
“This could have been handled much better if an ideal office or personalities had been called on to work it out. Having a department of ICT would help establish better policies and laws,” said Gabison
