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MANILA, Philippines -- Despite prevailing questions about the peace and order situation in the area, Davao City is becoming an emerging "alternative" city for offshore outsourcing, according to XMG Asia Pacific.

In its "Global Offshoring Leadership" study, the analyst firm said Davao City will be a viable alternative site within the next three years. XMG's ongoing study focuses on forecasting the global demand for offshoring and outsourcing services and the site optimization of emerging cities.

Other alternative offshoring cities mentioned are Montevideo (Uruguay), Jakarta (Indonesia) and Casablanca (Morocco).

Despite periods of turmoil in the Mindanao Region, XMG said service providers who participated in the study are very bullish about Davao City, primarily due to the area's larger population of untapped qualified resources compared to Cebu City.

Cebu, according to XMG, is nearing saturation as it receives more investments, most of which are from the expansion of existing locators in Metro Manila.

Among others, the study highlighted the population of Davao City as considerably higher than other "tier-2" offshoring cities. It is estimated that Davao City's workforce is twice that of Cebu.

Telecom facilities, transportation networks and public transport systems are already in place in Davao City. However, XMG indicated there is a need to further improve and modernize these services. Otherwise, business continuity and disaster recovery plans would go unfulfilled.

Meanwhile, Commission on Information and Communications Technology commissioner Monchito Ibrahim reported three major call center operators that have set up in Davao, including CyberCity Teleservices and Link2Support.

"Ayala Land is building an IT park in Davao which should address investor confidence as peace and order remains a challenge," Ibrahim told INQUIRER.net via phone.

Aside from call centers, he said the CICT is pushing Davao as a hub for software development.

"Worker supply is not a problem because Davao attracts workers from other cities like Butuan and Cagayan De Oro," he said.

• Filipinos still spending on new technology--Nielsen survey
• Yano rings close of trading at PSE
• No sign of governor’s assistance to Cebu Business Month

• Consumer electronics show opens in Vegas