Nomads FC vs. Kaya FC – UFL Quarterfinals and win Galaxy tickets

Football in the Philippines is getting more and more popular. Thanks to the national team the Azkals, but also thanks to the commitment and improved organization of the United Football League (UFL).

After finishing the group stage and last 16 of this year UFL Cup, the upcoming weekend will host the quarterfinals.

For the UFL quarterfinals Nomads Auction Manila FC will be playing Kaya Cignal, on Saturday November 26th 4pm at the University of Makati. Admission is free and the UFL will be raffling off tickets to the LA Galaxy-Azkals match. Match will be televised live on AKTV.

Kaya which is the club of Azkals captain Aly Borromeo, Anton Del Rosario, Yannick Tuason, Nate Burkey, Jaison Sabio and Lexton Moy are perceived favorite for this Saturday’s highlight. However, Nomads Auction Manila FC consists of talented footballer from mainly Europe, but also America and Africa. Team spirit, discipline and simple football are among the successors of their game. Nomads’ defense which did not concede any goal in this year’s cup will be heavily challenged by Kaya’s attacking power. But according to Nomads defender Yves De-Luis “Whoever will be in the first eleven for Nomads tomorrow, will make it very very difficult for Kaya to score. And even if we are underdog, we believe to get to the semi finals, because the decision is made on the pitch – and we are ready.”

Globally, people are paying to watch football. Here in the Philippines it’s still free! What better to do than go and support one of the teams. Wear green for Nomads or yellow for Kaya. See you in the Stadium!

Call Center Industry Flourishes in Cebu

As the local BPO industry continues to grow, the Philippines is on the fast track to becoming one of the  prime outsourcing destinations in the world. Next to Metro Manila, Cebu City is considered as one of the most important BPO destinations in the country. As more and more investors flock to the city, the “Queen of the South” is fast becoming the largest call center hub in the Visayas region.

Business Process Outsourcing (BPO) is one of the fastest growing industries in Cebu City. Because of the low cost of labor, more and more foreign and local companies are now setting up operations in the city. There are already a number of call centers in the area, and more are still on the way. Some of the large Metro Manila based call centers have already set up a second or “provincial center” in Cebu.  Even a few small and medium BPOs have bypassed Metro Manila entirely and gone straight to Cebu.  Coupled with an exceptionally skilled workforce and a lower cost of living, it’s no mystery that the Philippine BPO industry is alive and well in Cebu City.

The ability of most Cebuanos to understand and communicate in fluent English is also an important advantage in the city’s outsourcing industry. As English is considered the lingua franca of the call center industry, a rudimentary knowledge of the language is essential in fields like customer service and telemarketing.

The average salary of a call center agent in Cebu is between Php 13,000 and Php 15,000 per month, while the salaries of Manila-based agents range from Php 15,000 to Php 18,000. This is primarily because Manila is a Central Business District (CBD) and boasts a more competitive workforce than in Cebu. However, employee attrition rates are lower in Cebu, indicating higher job satisfaction among call center agents in the area.

In terms of operational costs, setting up business in Cebu is cheaper than in Manila. Rental rates are 31% lower in Cebu, commercial office space going for as little as Php 250 per square meter. The average rental rate for commercial office space in Manila is Php 800 per square meter.  Electricity and other utility expenses are also 40% cheaper in Cebu, electrical expenses costing as little as Php 4,000 per month for smaller-scale businesses.

According to Gregory Kittelson, Outsourcing Consultant of Makati-based Kittelson and Carpo Consulting, “The growing number of foreign investors is a strong indication that Cebu City is fast becoming an important BPO center in the country. More and more foreign companies are now tapping into the local workforce, injecting large amounts of capital into the economy. I believe that this bodes well for the future of Cebu City’s outsourcing industry.”

The growing BPO industry has also created a number of job opportunities for Cebuanos, providing solid employment for the local workforce . This, in turn, has further boosted the local economy. A recent study by the Department of Trade and Industry puts the GDP growth at 4.5% in 2008. Experts are also expecting a steady increase in employment for the second quarter of 2010.

Although call centers in Manila work at a faster pace and are considered more professional, Cebu is still considered the #1 provincial destination for foreign multinationals and BPOs. And As the local outsourcing industry continues to grow, Cebu City will continue to establish itself as one of the prime outsourcing destinations in the Philippines.

BPO Watch: Philippine Outsourcing Industry Soars to New Heights

By Kathleen Yu

Business Process Outsourcing (BPO) is one of the fastest growing industries in the Philippines today. Since it’s advent, the industry has experienced a steady growth in annual revenue, boasting a 23% increase in 2009 alone. To date, the Philippines covers about 21% of the global BPO market, and is considered a prime outsourcing destination in Southeast Asia.

Foreign investors have expressed a growing interest in the Philippine BPO market, projecting a steady increase in the country’s annual revenues. The Business Processing Association of the Philippines (BPAP) expects a 26% increase in annual revenue for the year 2010, totaling to about 8.5 billion USD. A projected increase of 27% is also expected for 2011, bringing the estimated income to 10.7 billion USD. As the Philippine BPO Industry continues to expand, more and more foreign companies are now outsourcing operations to the country, creating job opportunities for the Philippine workforce.

This has translated to 74,000 new jobs in the year 2008 alone. The BPAP estimates that at least 435,000 individuals are currently employed in the country’s BPO industry; 61% in contact centers, 18.5% in back office KPOs, 9.5% in IT Software Development and Maintenance, 5.4% in Engineering, 3.2% in Transcription, and 2.2% in Animation. However, the numbers are still expected to rise in the coming years, as more and more foreign companies set-up business in the Philippines.

The Philippines is the third largest BPO location in the world, next to India and Canada. Considered as a top Offshore BPO destination, the country boasts one of the fastest growing outsourcing industries in the world. The Philippine BPO sector has grown at an annual rate of 46% since the year 2006. According to the BPAP projection, the Philippines is expected to earn between 8-11 billion USD by the year 2010. Several prominent companies have already outsourced operations in the country, among these are computer giants Dell and IBM, HSBC, Convergys, Teletech and Accenture.

According to BPO Consultant Gregory Kittelson of Kittelson & Carpo Consulting, “The Philippines is on its way to overtaking India as a global BPO provider. More and more companies are now taking advantage of the country’s educated workforce and American accent, low start-up costs, tax-free holidays and easily available infrastructure to set up offices here in the Philippines. The future of the country’s BPO industry has never looked brighter.”

Philippine Energy Companies Seize Investment Opportunities

By Jason dela Torre

Renewable energy is a growing industry in the Philippines, thanks in part to increased investor optimism in renewable energy investments. Both foreign and local investors alike, including two of the Philippines’ top trading partners, are confident in the country’s potential as a major renewable energy investment destination. A number of foreign-based energy companies have already set up subsidiaries in the country, led by British company Bronze Oak, which established the San Carlos Bioenergy Company in 2007, and is expected to generate roughly 9 megawatts of electricity, including another 5 mW for grid export.

Vestas Wind System

Vestas Wind System

Danish wind power provider Vestas Wind Systems Asia-Pacific is set to establish an IT hub in the Philippines, expected to employ up to 200 local employees by 2011. The company will assist the Philippine government in meeting their power generation target of 417 megawatts wind energy production by 2013, says regional president Sean Sutton. “Currently, we have supplied 20 turbines in the wind farms in Ilocos Norte that generates 33 MW of power, which is capable of supplying energy to households up to tens of thousands. The Philippines being an abundant source of wind energy, we plan to scale up and get a significant slice of that 417 MW energy target,” Sutton said in a statement to Inquirer.net.

Aboitiz Power

Aboitiz Power Corporation plans to start up several energy projects by 2011, expected to generate about 400 Megawatts of electricity for the Luzon and Mindanao grids. According to senior vice president Luis Miguel Aboitiz, “The company will be pushing through with the Davao coal and Subic coal power plants and will also complete the expansion of the Ambuklao hydropower plant next year.” Both the Davao and Subic coal plants will make use of clean coal technology.

The Aragorn Power and Energy Corporation, a Philippine-based oil and gas company, recently inked a deal with Chevron Kalinga Limited, a subsidiary of Chevron Geothermal Philippines, to set-up a 100 megawatt geothermal power plant in Kalinga. The 26,000 hectare land was acquired by the Aragorn Power and Energy Corporation and the Guidance Management Corporation from a service contract with the Department of Energy. The project is expected to cost about USD 300 million.

The Paris Manila Technology Corporation (Pamatec) has also set-up a Philippine Rural Electrification Service (PRES) project worth 17.5 million euro, providing 5,129 solar panels to impoverished barangays in Masbate. This project will supply electricity to 665 barangay establishments, and 18,000 households. Pamantec is expected to set-up 1,000 more solar units in Masbate by the end of 2011. As investor enthusiasm continues to grow, government agencies and banks are now showing their support for renewable energy projects in the Philippines.

In February of this year, the Department of Energy (DOE) inked $1.5 billion worth of renewable energy contracts to both foreign and local-based energy companies, boosting investor confidence in the Philippines’ emerging renewable energy industry. Sixty-eight mini-hydroelectric projects, five geothermal and seventeen wind energy projects were awarded by the DOE, which totaled to $1 billion in investments. Twenty-two service contracts for biomass projects were also approved by the agency, worth about $500 million.

The Asian Development Bank (ADB) also plans to establish a $1 billion fund to ensure the continued financing of renewable energy projects in the Philippines. The projects will be conducted over a five year period, and will include hydropower, wind, solar, and wave energy.

Says Gregory Kittelson of Manila consulting firm Kittelson & Carpo Consulting, “Renewable energy is the next big thing in the Philippines. We’re seeing a lot of government initiative and investor optimism in the industry, with many foreign-based companies setting up partnerships with the Aquino government and establishing renewable energy projects here in the country. If this thing takes off, we’ll probably see a lot of developments in the economy as well.”


Sources

http://www.abs-cbnnews.com/business/06/23/10/adb-eyeing-1-b-philippine-renewable-energy-fund (ADB Eyeing $1 billion Philippine Renewable Energy Fund, Reuters)

http://www.philstar.com/Article.aspx?articleid=545859 (DOE inks $1.5 million in Renewable Energy Deals, Donnabelle Gatdula, Philippine Star)

http://www.gmanews.tv/story/173064/philippines-a-major-renewable-energy-investment-destination (Philippines A Major Renewable Energy Investment Destination, Joseph Ubalde, GMANews TV)

http://www.philstar.com/Article.aspx?articleId=598635&publicationSubCategoryId=63
(Masbate Villages get solar energy, Alexis Romero, The Philippine Star)

http://goodnewspilipinas.com/?p=10674
(Danish wind power firm to invest in Philippine IT hub)

http://ezinearticles.com/?Increasing-Investment-in-Geothermal-Energy-Sector-in-Various-Parts-of-Philippines&id=5450028 (Increasing Investment in Geothermal Energy Sector in Various Parts of Philippines, Cortez Misaell)

Public-Private Partnerships to Boost Philippine Economy

By Jason dela Torre

According to Aquino, “The answer to our lack of funds are new and creative ways to address long standing problems. There are a number of investor groups that have expressed interest and confidence in the Philippines. This is the solution: public and private sector partnerships.” He adds that his government plans to shorten the process of build-transfer-operate (BOT) programs in the Philippines, to ensure that foreign and local investments from the private sector would be able to address growing infrastructure problems, and create more job opportunities for the local workforce.

Established by President Aquino under Executive Order No. 8, a Public-Private Partnership Center was recently set-up in the Philippines, to provide assistance to local government units and their attached agencies in the implementation of different projects, as well as to recommend implementation policies, monitor projects, and manage funding under the Project Development and Monitoring Facility. Says Executive Secretary Paquito Ochoa Jr, “This executive order is just the first of many steps this administration will take to provide our people with the infrastructure they need, the infrastructure required to make our country more attractive to investors.”

The private sector is also doing its part in promoting public-private partnerships in the Philippines: the Philippine Constructors Association (PCA), the PCA Foundation Inc. (PCAF), the Bankers Association of the Philippines (BAP), the Investment Houses of the Philippines (IHAP), and the Research, Education, and Institutional Development (REID) Foundation recently signed a Memorandum of Cooperation forming a public-private partnership (PPP) coalition geared toward assisting the Aquino administration in the successful implementation of PPP projects for infrastructure. The coalition is prepared to provide funding, resources and expertise to assist local governments in their respective infrastructure projects.

According to Gregory Kittelson of  Philippines Business Consulting Firm Kittelson & Carpo Consulting, “Public-private partnerships not only promise to restore investor trust in a government once plagued by allegations of corruption, it also enables us to take advantage of the private sector’s expertise in developing lasting, quality infrastructure for public benefit.”


SOURCES

AmCham Journal October 2010 (Promoting Public-Private Partnerships in Infrastructure Development, Enrico Basilio, Jeremiah Acena, Rafael Hernandez, et. al)

http://online.wsj.com/article/SB10001424052748703700904575390802484639706.html (Philippines’ Aquino Seeks Public-Private Partnership, Cris Larano, Wall Street Journal Online)

http://www.abs-cbnnews.com/business/09/12/10/aquino-issues-eo-8-creating-public-private-partnership-center (Aquino issues EO 8 creating Public-Private Partnership Center, abs-cbnNEWS.com)

(Philippines’ Aquino: To Pursue Public-Private Partnership To Boost Economy, Cris Larano, Dow Jones Newswires; 632-848-5051;cris.larano@dowjones.com)

Bright Prospects Ahead for Philippine Agribusiness

Philippine Agriculture - Vegetable Farm

Philippine Agriculture - Vegetable Farm

The last ten years has been crucial to the development of agricultural and rural infrastructure in the Philippines. The country now boasts a nautical highway which has significantly eased the transport of agricultural products from the island of Mindoro to other parts of the country. A number of modern highways and road systems have also been built to connect the areas of Clark, Subic, and Tarlac in Central Luzon, all major trading areas, thereby making it easier for farmers living in these locales to transport their goods to Metro Manila. These and other developments, coupled with the increasing popularity of agribusiness in the Philippines, has led to the development of the country’s agricultural industry, as well as to a significant increase in agricultural profits.

In 2009, the country’s Agriculture, Fishery, and Forestry (AFF) sector contributed to about 15% of the Philippines’ national gross domestic product (GDP). Projections from the International Monetary Fund (IMF) puts the Philippines’  2011 GDP growth rate at 5%, having already risen by 7.5% in the first nine months of 2010. The Philippine Agricultural sector is also expected to grow by at least 2.5-3.5% in 2011. According to Dr. Rolando Dy, an agricultural specialist from the University of Asia and the Pacific (UA&P), harvests from the final quarter of 2010 are likely to spill over to the first quarter of 2011, while crops like rice, corn, and banana are expected to continue as top performers in the next year.

Data and statistics from “Project JobsFit:The Dole 2020 Vision”, a recent labor market study conducted by the Philippine Department of Labor and Employment (DOLE), predicts that agribusiness will emerge as a key employment generator in the next five to ten years. Criselda Sy, director for local labor, says that the agribusiness sector boasts a number of, “hard to fill in demand posts.”

A number of recent developments in the Philippine Agribusiness sector have already boosted investor interest in the industry. Philippine-based company AgriNurture, a local producer of farm goods, recently undertook Php 1.7 billion worth of agribusiness projects with the Chinese government of Guangxi province, and is currently negotiating the export of vegetables and other commodities to the United States. Thailand-based company Charoen Pokphand (CP) Foods has also invested Php 1 billion in a hog production facility in Concepcion, Tarlac.

Prospective growth for the industry is evident; the Philippines’ agricultural resources include 29.81 million hectares of agricultural land, and 5.7 million hectares of arable land; however, only about 27.19% of the Philippines’ total agricultural land have proper irrigation systems. Lack of development in these areas has led to a significant decrease in crop production, with rice harvests experiencing a 25% shortfall in 2008. Crop production also contracted by 7.24% in 2010, with palay and corn production dropping by 14.95% and 15.39% respectively, and registered losses in coconut and sugarcane farms. Philippine agribusiness bounced back in other areas, nonetheless, particularly in livestock and poultry, fisheries and bio-fuel development.

The livestock sub-sector grew by 1.07% in 2010, and accounted for 12.74% of the Philippines’ total agricultural production. Both carabao and dairy production boasted significant gains at 3.6% and 14.59% respectively, while hog production rose by 0.77%. The livestock sub-sector grossed a total amount of Php 152.1 million, registering a 9.44% increase from 2009. The poultry sub-sector, on the other hand, rose by 3.01% in 2010, and had a 15.53 percent share in the Philippines’ total agricultural output. Production gains from both chickens and chicken eggs, at 2.82% and 5.87% respectively, also contributed to the sector’s overall growth performance. Poultry production grossed a total amount of Php 113.2 billion, about 7.10% higher than 2009 levels.

The fisheries sub-sector, on the other hand, inched up by 0.69% in 2010, and contributed a 27.37 percent share to the country’s total agricultural output. Production increases at municipal fisheries and aquaculture were recorded at 0.53% and 1.91% respectively, while production at commercial fisheries declined by 1.79%. The sub-sector grossed a total amount of Php 163.6 billion, a 1.81% increase from 2009 levels.

Bio-fuel development in the Philippines is also attracting a large number of foreign and local investors, thanks in part to the country’s “attractive investment sites for bio-fuel projects”, this according to Chris de Lavigne, the Global Vice President of US-based company Frost & Sullivan. In fact, a number of public and private sector initiatives have already been set-up to develop bio-fuels in the Philippines, including a Php 12 billion private sector investment expected to produce about 240 million liters of bio-fuel annually, and various public private partnership (PPP) projects between the Aquino government and the private sector.

Says Gregory Kittelson of Philippines consulting firm, Kittelson & Carpo Consulting, “We’re seeing a lot of growth potential in the Philippine agriculture industry, particularly in the poultry and livestock, fisheries, and bio-fuel development sub-sectors. A number of foreign and local companies are already tapping into these industries, and opening up employment opportunities in Philippine agribusiness. If this persists, we could easily be looking at sustainable growth in the Philippine economy.”


Sources

Tourism Enterprise Zones Take Global Competitiveness to New Heights

By Jason dela Torre

Republic Act (RA) 9593, or the Tourism Act of 2009  passed by the Arroyo administration, cements a national policy bolstering investments and improving employment in the Philippines’ tourism industry. Fast forward to 2011, less than two (2) years since the law’s inception, and the country is seeing a rise in international visitor arrivals, which spiked to 7.89% in the first quarter of 2010.

The Act recognizes tourism as an “indispensable element of the national economy and an industry of national interest and importance, which must be harnessed as an engine of socio-economic growth and cultural affirmation to generate investment, foreign exchange and employment, and to continue to mold an enhanced sense of national pride for all Filipinos.” Under this law this translate to increased funding and resources for the Philippine Department of Tourism (DOT) and its affiliate agencies to effectively implement a “national policy for tourism” that would serve as “an engine of investment, employment, growth, and national development” in the Philippines.

The Act also provides for the establishment of “Tourism Enterprise Zones” in strategic areas in the country, geared toward luring foreign investors and tourists to visit these sites. Some recently established tourism enterprise zones include places like Cebu, Davao, Iloilo, Bohol, Laguna, Cavite, Boracay, and Palawan, chosen for their cultural and historical significance. Tourism Enterprise Zones are designated by the Tourism Infrastructure and Enterprise Zone Authority (TIEZA), the government agency responsible for regulating and supervising these sites.

This has not only improved the Philippine Tourism industry as a whole, but also created more job opportunities for residents working in these areas. Says Gregory Kittelson of Manila consulting firm Kittelson & Carpo Consulting, “The Philippines is a beautiful country. It boasts some of the most scenic beaches, and spectacular scuba diving in the world. Beach resorts are also more affordable here, and readily available to tourists looking for a real bargain without sacrificing quality service and overall beauty. With the implementation of tourism laws, and the establishment of Tourism Enterprise Zones, the future of the Philippine tourism industry has never looked brighter.”

Philippines Tax Talk: Understanding the REIT Act

By Kathleen Yu

In a bid to boost the stock market, the Real Estate Investment Trust (REIT) Act was recently passed into law, marking the fourth legislative attempt to bolster economic growth and development in Philippine markets. The Real Estate Investment Trust (REIT) Act of 2009 (Republic Act No. 9856) promises to promote economic development in capital markets, democratize the distribution of wealth by increasing Filipino participation in the Philippine real estate market, enable the financing of infrastructure and other projects through the management of capital markets, and provide protection to the investing public.

But let’s get back to basics: What is REIT? And how can it help improve our economy?

A Real Estate Investment Trust (REIT) is a corporate institution that invests in real estate, while reducing and (in some cases) eliminating corporate income taxes. In exchange, REITs are required to distribute 90% of their annual income to shareholders. The REIT structure provides a framework for real estate investments in the same way as mutual funds provide investments in stocks. Like any corporation, REITs can either be publicly or privately held, and are classified as either equities, mortgages or hybrids.

The Real Estate Investment Trust (REIT) Act of 2009 proposes several incentives for establishing these corporations in the country, including tax exemptions on revenues and shareholder dividends. REITs will also benefit from the documentary stamp tax exemption recently issued on its original shares of stock.

According to Philippine Stock Exchange  (PSE) president and chief executive officer Francis Lim, “The REIT law promotes transparency for tax reporting purposes. Moreover, the new business opportunities that will be created should translate to a broader tax base for the government. An independent study conducted by a team from the University of Asia and the Pacific concluded that the government will not only recover every peso of tax incentive but stands to gain between P0.15 and P0.35 more over a 15-year period. This conclusion was made on the basis of the March 28, 2009 version of the bill, which granted far more liberal tax incentives than the enrolled version.”

Michael McCullough of Manila brokerage firm, KMC MAG Group, adds, “The REIT is a promising new investment option allowing many small investors to take part in large scale real estate developments through simply purchasing stocks in the REIT.  The entire commercial real estate industry is excited as REITs will encourage more real estate development, which will be beneficial to the local economy.”

In order to qualify for tax exemptions under the REIT Act, companies must first meet the following requirements:

  1. Company must be listed in the Philippine Stock Exchange (PSE) and distribute dividends of at least 90% of its net income
  2. Company must invest only in real estate or real estate assets
  3. Company must invest at least 70% of its total assets
  4. Company must not undertake in property development activities nor invest in unlisted property development companies
  5. Company must invest at least 35% of its total assets in real estate
  6. Not more than 5% of its investments in listed or unlisted debt securities and listed shares of or issued by property and non-property corporations (local or foreign) and other locally-registered REIT should be invested in any one issuer’s securities or any one manager’s funds
  7. When investing in real estate as a joint owner, the REIT should acquire shares or interests in an unlisted special purpose vehicle (SPV) constituted to hold down the real estate and the REIT should have freedom to dispose of such investment
  8. Company’s total borrowings and deferred payments should not exceed 35% of its deposited property
  9. A full disclosure on the identity of the parties and the transaction should be made to the PSE if it acquires assets from or sells assets to interested parties or invests in securities of or issued by interested parties
  10. Company must conduct a full valuation of a REIT at least once a year
  11. Company must comply with the applicable minimum public ownership requirement of the Philippine SEC
  12. In addition, to qualify for the exemption of taxes imposed on the transfer or sale of assets, REIT must retain or hold the assets sold or transferred for a period of five years from the date of sale or transfer to the REIT

REITs must have a minimum paid-up capital of Php 300 million, with 1,000 public shareholders, having at least 50 shares each. Although the act seems promising, it is important that the incentives and exemptions given to investors must be offered with caution, as it may impact other industries, and even government funds.

Manila lawyer, Amanda Carpo of Kittelson & Carpo Consulting stated that: “The REIT law will allow Philippine real  estate market to be truly global and it holds a lot of promise for the industry. Hopefully, the law will be implemented as written and the different government agencies will not try to inject their policies into the implementing rules and regulations. Those concerns should have been aired and dealt with in the deliberations. We must trust our lawmakers and not second guess the wisdom of the law.”

Aquino Vows to Improve Foreign Investments in the Philippines

By Kathleen Yu

President Noynoy Aquino

President Noynoy Aquino III

In his first state of the nation address (SONA) on July 26, 2010,  newly elected president Benigno Aquino III vowed to boost foreign investments in the country, fight corruption within the government sector and create job opportunities for the local workforce. Aquino promised to “boost collection and fight corruption in the tax and customs bureaus”  and to provide for the education, housing, and health care needs of working class Filipinos.

He vowed to improve PhilHealth coverage for government and private employees, as well as to “build more classrooms” and “fund service contracts under the Government Assistance to Students and Teachers in Private Education Program (GASTPE).” Aquino also proposed conditional cash transfers to assist parents in educating their children, and promised to improve the Philippine educational system by expanding the basic education cycle from seven years to the global standard of twelve years.

To accomplish this, he proposed the establishment of public-private partnerships between the government and the business sector. He acknowledged the need to attract foreign investors to the country, and promised to implement stable economic policies that would not only “level the playing field” for potential investors, but also make the Philippines a more attractive investment destination in Southeast Asia. This would, in turn, reduce unemployment and create job opportunities for the local workforce.

According to statistics from the Association of Southeast Asian Nations, the Philippines registered only $1.5 billion in direct foreign investments in the year 2008, compared to Thailand’s $9.8 billion and Indonesia’s $7.9 billion. Economic growth in the Philippines averaged 3.7% in the last twenty years, as opposed to 4.7% in Thailand and 6% for Malaysia. During his speech, Aquino vowed to consider “each and every item of the budget” and promised to improve direct foreign investments in the country. Budget secretary Florencio Abad also proposed the implementation of government austerity measures, and promised “dramatic” improvements in both the education and health sectors.

In his speech, Aquino promised to improve business registration procedures in the Philippines, to encourage foreign and local investors to set up operations in the country. Under the leadership of Department of Trade and Industry (DTI) secretary Gregory Domingo, the 4-8 hour process of registering a business name would now be cut down to just 15 minutes. The 36 documents required for the procedure would be cut down to 6, and the 8 page application form would be shortened to just one page. This would make it easier for foreign and local investors to set up business operations in the Philippines.

According to BPO Consultant Gregory Kittelson of Manila consulting firm Kittelson & Carpo Consulting, “Many foreign investors are hopeful that Aquino will provide an enabling and transparent business environment that will encourage growth and promote fair competition among foreign and local companies. The keyword here is confidence. Once investors are confident that Aquino will come through with his promises and put the right processed in place, we can expect a surge in long term investments.”

Kittelson added, “The general mindset of foreign investors was to wait and see if all went well during and after the recent elections.  Once Aquino was sworn in and the country appeared to demonstrate continuous stability, foreign investors regained confidence and carried out their investment plans for the Philippines.”

Let’s hope that PNoy (as President Aquino is affectionately known to the masses) is true to his word.

Philippine BPO: Exploring Metro Manila’s Cyber Parks

By Kathleen Yu

Cyber Parks (Techno Parks, IT Parks, Ecozones) are ideal destinations for setting up a BPO or call center in the Philippines. Outsourcing companies prefer to locate business operations inside technoparks, mainly because of the large number of tax incentives and government exemptions available in these areas. Businesses established inside IT Ecozones are eligible for numerous benefits, including income tax holidays from 5-8 years, permanent residency status to foreign-based business owners and investors, as well as the payment of 5% tax on gross income after the company’s income tax holidays have expired. Government exemptions on capital equipment, the employment of foreign nationals, and gross income remittances are also readily available to foreign and locally-owned BPO companies in these areas. Metro Manila, considered as one of the top BPO destinations in the world, is home to a large number of these Cyber Parks, some of which include the Eastwood City Cyber Park in Libis, the McKinley Hill Cyber Park near Fort Bonifacio, UP-AyalaLand Technohub in PHILCOA, and the Northgate Cyber Zone in Alabang.

According to Michael McCullough of real-estate brokerage firm KMC MAG Group, “More and more foreign and local companies, BPOs and call centers are now setting up business in these cyber parks to take advantage of the numerous tax incentives, low operational costs, and easily available commercial office space. Locating your enterprise inside an IT Park offers a lot of benefits for your company, including the opportunity to collaborate with other companies in similar fields.”

The Philippines has experienced a great deal of economic improvement from the establishment of Cyber Parks, especially in terms of IT-related services. Data from the Board of Investments (BOI) and Philippine Economic Zone Authority (PEZA) has revealed that over 17 investment sites are managed in the National Capital Region (NCR) alone. It was also stated in the Manila Bulletin that there are currently 70 contact centers and 50 licensed business process outsourcing (BPO) establishments in the Philippines and it is very likely that the country will soon monopolize a larger portion of the global BPO market. Statistics from the Department of Labor and Employment (DOLE) also revealed that the employment rate for IT establishments grew by more than 20% in the first quarter of 2010. Some of these job positions include programmers, IT sales representatives, technicians, software developers, IT planners, IT engineers, network specialists, business consultants, and many more.

Listed below are some of the Cyber Parks found in Metro-Manila

NORTHGATE CYBER ZONE, ALABANG

Northgate Cyber Zone Alabang

The Northgate Cyber Zone is a business center and IT Park located in the town of Alabang, which boasts a large number of information and technology industries. IT companies from overcrowded cities like Metro-Manila and Makati are now relocating operations to the Northgate Cyberpark in Alabang, injecting capital into the thriving industrial park. More and more foreign multinationals are also looking at Alabang as an ideal destination for setting up outsourcing industries in the Philippines.

MCKINLEY HILL CYBERPARK, FORT BONIFACIO
McKinley Hill Cyberpark is a 14 hectare PEZA Economic Zone that houses a large number of BPOs and information technology companies. Recently declared an IT park by President Arroyo, the Cyberpark promises to create a large number of job opportunities for the working Filipino. A number of foreign and local BPOs have already set up operations in the area and more are still arriving on a daily basis. McKinley Hill is also considered as one of the largest cyber parks in the country.

EASTWOOD CITY CYBERPARK, LIBIS
Eastwood City, considered as one of the most progressive cyber parks in the Philippines, is a 16 hectare state-of-the-art commercial district, located in Quezon City. Eastwood is considered as one of the most important commercial and residential centers in the country. Call centers and BPO companies have already set up business in the area, and more and more are still arriving. Multinational companies like IBM and Citibank also have offices in Eastwood City.

UP-AYALALAND TECHNOHUB, PHILCOA
The UP-AyalaLand TechnoHub is located along PHILCOA, near the University of the Philippines, and is a Science and Technology (S&T) Park that aims to bring together colleagues in related fields, strengthen existing synergies and spark ideas for the research and development of the Science and Technology Industry.