Cebu, 8th Best Site for BPO

ITS booming business process outsourcing (BPO) sector has again gained Cebu City a place among the world’s best.

Tholons, an advisory company on global outsourcing and investments, included the city in a list of preferred outsourcing destinations in the world.

In its “Top 100 Outsourcing Destinations Report for 2013”, Tholons listed the city in eighth place. This is a notch higher compared to the city’s ranking last year.

Aside from Cebu, six other Philippine destinations were included in the list. Manila is now third, moving up from fourth last year. Davao ranked number 70; Sta. Rosa, Laguna, 84; Iloilo City, 93; Bacolod City, 94; and Baguio City, 99.

Tholons ranked the cities based on the quality, availability and skills of the workers in its BPO industry, cost of operations, infrastructure, cost of living, risk profile and quality of life, among others.

According to the report, the Philippines enjoy a more vibrant Information Technology (IT)-BPO industry than either Indonesia or Malaysia.

“Based on the events of 2012, the Philippines continued to garner interest from large, Western providers, not only as an offshore delivery location, but likewise as a potential rich domestic market for IT services,” Tholons said.

In 2012, 17 new BPO companies opened in Cebu.

The Cebu Investment Promotions Center estimates that there are already about 95,000 people employed in the BPO sector in Cebu.

Upon learning about the city’s recent achievement, Mayor Michael Rama said he welcomed the inclusion of the city in Tholons list.

“That wonderful accolade will be for all of us. It was a great surprise personally for me,” he said in his regular news conference yesterday.

Commerce Flows into Subic, Philippines

By: Eden Lorren Pabalan

Subic Bay, Philippines is bordered on the east by Zambales mountains and the South China Sea on the west. A former US Naval base, Subic is now a freeport zone and a gateway for the transportation of goods. And, while it’s topography is more of a jungle paradise, technology, infrastructure, and industry have changed the landscape and the standard of living in the community. Real estate and BPO companies doing business in the Philippines are rising fast in the area and investors are now looking at Subic as a top BPO destination in the country.

The newly completed SCTEx (Subic Clark Tarlac Expressway) a P36 billion peso expressway is a leading avenue through Olongapo, Tarlac and bridges the three cities of Tarlac, Subic, and Clark. Access from the Metro Manila area through the superhighway is convenient, safe and predictable.

Investments in office space and residential infrastructure are growing in Subic. Subic Bay Gateway Park is a commercial hub  home to a number of Korean and Taiwanese companies doing business in the Philippines. It offers 300 hectares of prime industrial land.

Ayala Land Inc., the Philippine’s biggest real estate developer has signed a 50-year lease with the government to develop a 7.5 hectare  commercial hub along Rizal Highway, within the Subic Bay Freeport and are in the steps of final completion for Anvaya Cove, a luxury resort area. An estimated P3 billion pesos are on the line for this investment venture. The proposed plan for the vicinity is to establish a shopping mall, hotel, and a Business Process Outsourcing building.

PLDT Corporation is also eyeing Subic as a BPO hotspot in the Philippines. The company has already inked a 17 hectare development project with the Subic Bay Metropolitan Authority, an  ICT hub that will bring the freeport to the frontlines of ICT infrastructure development in the country. Other call center companies are already open for business in the area, such as US-based Sutherland Call Center and Teletech.

According to Outsourcing Consultant Gregory Kittelson of Kittelson and Carpo Consulting, a Makati-based firm, “We are now seeing more interest from foreign investors in Subic.  Every year,  more and more of our clients are setting up operations in Subic and getting involved in outsourcing, shipping, and the importation and exportation of goods and services in the area.”

The growing BPO business in Central Luzon is continually creating job opportunities for Filipinos. Subic will soon be known not only as a beach and diving paradise, but also as a busy and prosperous economic zone in the Philippines.

Global BPO: Philippines vs. Malaysia

By: Kathleen Yu

Malaysia and the Philippines are two of the largest outsourcing destinations in Southeast Asia, both countries competing to achieve higher market shares in the global Business Process Outsourcing “BPO” industry.

Hailed as the “2nd top Business Process Outsourcing (BPO) Destination in the Asia Pacific” by global market intelligence provider IDC, the Philippine BPO sector has boasted an annual growth rate of 46% since 2006. Three key Philippine cities were recently awarded slots on the “Top Ten Asian cities of the future” by UK-based periodical Financial Times, putting Quezon City at 7th, Cebu at 8th, and Davao at 10th place.

Convergys Philippines is the largest BPO company in the country, employing over 22,000 professionals in the local outsourcing industry. Philippine BPO revenues were up by 19% in 2009, totaling to $7.2 billion. The Philippines is considered the third largest BPO destination in the world, dominating 15% of global markets.

According to BPO Consultant Gregory Kittelson of Makati-based firm Kittelson and Carpo Consulting, “With low operational costs and a large number of government-issued tax incentives, the Philippines is an ideal investment destination for foreign multinationals and other start-up companies.  Foreign BPOs prefer setting up operations in the Philippines because the Philippine workforce is exceptionally skilled, and boasts a large number of English-speaking professionals. Filipinos are also known for their hospitality and friendly manner, which has earned the country an enviable reputation as one of the prime outsourcing destinations in the world.”

Located south of the Philippines, Malaysia is another prime outsourcing location in the Southeast Asian region. The country is home to a number of international BPO companies, like Scicom (MSC) Bhd, SnT Global Sdn Bhd, and Vsource Asia Bhd.Malaysia offers unique advantages in government support, human capital, infrastructure, and domain expertise, which makes it an ideal destination for start-up BPOs.

Contact centers and BPO companies in Malaysia are growing in number, mainly because of the Malaysian economy’s resiliency in facing the global economic crisis. The inflation rate in Malaysia is 2.4%, lower than most Southeast Asian countries.

Bolstered by a change in political leadership, Philippine BPO is expected to register a 30-40% profit increase for the first quarter of 2010. The Malaysian economy, on the other hand, will continue to feel the effects of the 2009 Global Economic Recession, which has already caused a 2% slump in the country’s GDP for the previous year alone. Although both countries are ideal outsourcing destinations, the stability of the Philippine economy puts it at a sharp advantage over less secure Malaysian markets. Whether similar trends will prevail in the future remains to be seen.

Global BPO: Philippines vs. Latin America

By: Kathleen Yu

As the global Business Process Outsourcing “BPO” market continues to expand, outsourcing destinations like Latin America and the Philippines are seeing more foreign investors and increasing annual revenue. These areas expect a 30-40% profit upswing from BPO for the first quarter of 2010.

Latin American BPO is poised for growth, with large multinationals like Citigroup, Pfizer, and Ford setting up operations in the area. Other international offshore players in the area include TCS, Convergys and IBM. Latin American countries offer a number of fragmented domestic IT and BPO services, which enable bigger companies to capitalize on local acquisitions. Proximity to the United States and similar time zones may have led to 32% growth in voice transcription services in 2009 for the region.  Whatever the reason, the tides are shifting toward Latin American shores and away from India, the traditional leader in the voice transcription field.

The Philippine BPO sector dominates 15% of the global market, and is the third largest in the world. Call centers comprise 80% of Philippine outsourcing, which relies on the local workforce to supply voice transcription services for foreign multinationals. The Philippine BPO market is expected to overtake India as a global outsourcing provider, with revenues expected to reach $13 billion by 2010. A more mature BPO market , English speaking workforce, government support, fiscal incentives, special tax zones, and strategic location translates to better service providers and more cost efficient service gives the Philippines clear advantages over Latin American BPO.

According to BPO Consultant Gregory Kittelson of Kittelson and Carpo Consulting, “The Philippine BPO industry is one of the fastest growing in the world. Many foreign companies prefer the Philippines because of its low operational costs, educated workforce, and numerous tax incentives. Not only does this bode well for the country’s economy, it also sends a message to the rest of the world, that the Philippines is indeed a force to be reckoned with.”

Both markets are competitive and have unique advantages and disadvantages. By analyzing the nature of both industries, as well as their respective geographical locations and legal environments, it is possible to determine which country is best suited as an outsourcing location for your enterprise. The right information is key.

Philippines vs. Malaysia: Call Centers and BPOs

By: Eden Lorren Pabalan

Malaysia and Philippines are two of the top four offshore countries in Asia together with India and China. As the BPO industry progress, the first two countries are battling neck to neck in striving to achieve a higher global market share. Both the Philippines and Malaysia are experiencing unprecedented growth rate and revenue. Call center companies are booming in both countries and are expanding quickly.

The Philippines, composed of approximately 7,107 islands, is a country boasting of growth and development in Southeast Asia and home to different international BPO companies. Office spaces in the Philippines are being filled up by start-up BPO companies and the Philippines was hailed as the “2nd Top Business Process Outsourcing (BPO) Destination in the Asia-Pacific” by International Data Corporation (IDC). Three of its key cities were also awarded a slot in the “‘Top Ten Asian Cities of the Future” by Financial Times, placing Quezon City at 7th Place, Cebu at 8th and Davao at 10th place.

Convergys Philippines is the top BPO employer in the country with approximately 12,000 employees. Setting up a business in the Philippines is a good investment because of the high growth rate of its economy. The BPO annual growth in the Philippines average at 46% since 2006, thus, bringing in more jobs to Filipinos. The BPO output for 2008 in the Philippines was US$ 6.1B, making the country the 3rd largest BPO destination (15%) after India (37%), and Canada (27%).

Meanwhile, Malaysia is a country located south of the Philippines in Southeast Asia. It has a land area of 329,845 square kilometers and is currently ranked next to Philippines as a BPO destination. Malaysia is home to many international BPO companies such as Scicom (MSC) Bhd, SnT Global Sdn Bhd, and Vsource Asia Bhd. Malaysia has a unique advantage in government support, human capital, infrastructure, and domain expertise for supporting Asia-Pacific over neighboring countries.

Contact centers and BPO companies in Malaysia, like the Philippines, are also growing in number. The advantage of Malaysia is that their economy is more stable in the past few years than the Philippines’ before the Global Economic Crisis. The inflation rate of Malaysia (2.4%) is not as low as the Philippines’ (5.0%).

According to Gregory Kittelson, Business Consultant for Kittelson and Carpo, a Makati-based consulting firm, “Asia is awaiting the Philippines’ rise, especially with the change of political leaders of the country this year. BPO companies prefer the Philippines to other Southeast Asian countries because of the Filipinos’ skill of having a good command of English. Malaysia has already shown its tremendous progress from 2007 to 2008 before the Global Economic Crisis while the Philippines is yet to rise this year. It’s about time the country advance economically.”

The Philippines is expected to have an increase in revenue for 2010 especially after the elections in the country. More BPO companies are seeing the Philippines as a potential place of investment for the industry. Malaysia, on the other hand, is predicted to feel the effect of the 2009 Global Economic Crisis this year which affected their GDP tremendously at -2.0%, thus, giving the Philippines an advantage.

Subic is development hub of the north; BPOs thrive and survive

By: Eden Lorren Pabalan

Subic Bay, Philippines is flanked on the east side by the mountains of Zambales and surrounded by the bay and the South China Sea on the western end. It is known for its beaches and natural beauty. Subic has also been a gateway for transporting goods through its ports and a hot diving spot in the Philippines. Despite the nature-friendly features of this paradise, technology has also improve the standards of this community. Real estate and BPO companies doing business in the Philippines are fast-rising in the province.

SCTEx (Subic Clark Tarlac Expressway) is one of the leading avenues for the progress of Olongapo, specifically Tarlac. It is a 94-kilometer four lane expressway which actually costs P36 billion pesos and helped bridge the three cities which is Tarlac, Subic, and Clark.

Investments in office space and residential infrastructure are also growing in Subic. Subic Bay Gateway Park is a commercial hub which is home to mostly Taiwanese companies doing business in the Philippines. It offers around 300 hectares of prime industrial land. Meanwhile, top real estate developers are also starting to invest in the area.

Ayala Land Inc. has signed a 50-year lease with the government in developing a 7.5 hectare potential commercial hub along Rizal Highway within the Subic Bay Freeport. An estimated P3 billion pesos are on the gamble for this investment in this venture. The proposed plan for the vicinity is to establish a shopping mall, hotel, and a Business Process Outsourcing building. BPO companies continue to set up their businesses in the area.

PLDT Corporation is also eyeing Subic as a BPO hotspot in the Philippines. They already inked a 17 hectare development project with Subic Bay Metropolitan Authority and prioritizes it as an ICT hub to bring the freeport to the frontline of ICT infrastructure development in the country. Other call center companies are already open for business in the area such as Sutherland Call Center, an American Call Center company, and TeleTech has also expanded business to Clark.

According to Gregory Kittelson of Kittelson and Carpo Consulting, a Makati-based firm, “We are now seeing more interest from foreign investors in Subic.  Each year we place more and more of our clients in Subic involved in outsourcing, shipping, importing and exporting goods and services.”

The growing BPO business in Central Luzon is continually creating jobs and growth for Filipinos. Subic will soon be known not only as a beach and diving paradise, but also as a busy and prosperous economic zone in the country.

Real-Estate Market Flourishes as Fort Bonifacio GROWS

By: Eden Lorren Pabalan

Fort Bonifacio is just one of the many financial districts flourishing in the Philippines. From an old army post to a thriving potential financial capital, the Fort is proving its worth as a pot of gold for the local real estate market. As business prospers in the area, luxury residences and office buildings are rising up from the fields and empty lots.  Real estate developers and brokers are also expanding operations in the district to provide for the increasing housing demand. This has created an unprecedented boom for the Philippine real estate industry, as more and more foreign investors inject capital into Fort Bonifacio and the surrounding vicinity.

Fort Bonifacio, formerly known as Fort McKinley, is a 25.78 square kilometer historical landmark with a colorful past. Unlike today, Fort Bonifacio used to be home to the Armed Forces of the Philippines, and was a barren piece of land. Establishing malls and highrise buildings may seem ironic due to its proximity to the Libingan ng mga Bayani and the Manila American Cemetery. Despite this, its distance between Makati CBD and Ortigas has made it a top choice for real estate investors and clients.

In 2009, Fort Bonifacio recorded the largest number of new office space occupied- around 62,000 square meters. Despite the Global Economic Crisis, the Fort is still thriving at establishing businesses in the area and constructing infrastructure. Two Serendra is under construction, Shangri-La has started breaking ground, St. Luke’s Medical Center has even established a Global City branch, and BPO companies are continuing to expand in the district. Investing in real estate is considered the best option for those who wish to live in a continually expanding Fort Bonifacio.

The Makati Central Business District, home to many of the country’s top captive BPO companies, such as HSBC, Deutsche Bank and JP Morgan Chase, has recently declined in rental rates for prime office space, suffering a drastic decrease of around 35% in the last quarter of 2009. In contrast, Fort Bonifacio’s rental rates have only decreased by 17%. The Fort is currently the best alternative to Makati CBD in terms of real estate and office spaces.

Future plans for Fort Bonifacio include the establishment of the country’s tallest buliding, which is set to beat out the current title holder: Makati’s 52-story PBCom Tower. Federal Land will construct the 66-storey skyscraper at the heart of the Fort. It’s first 25 floors will be occupied by the Grand Hyatt Hotel. Condominiums in the Fort are also competing in number against Makati’s prime units.

According to Michael McCullough, Director of Makati-based real estate brokerage company KMC-MAG Group,  “Real-estate in Fort Bonifacio has already seen an increase of demand since the first quarter of 2010. Prices are already comparable to real-estate in Makati, with buildings primarily catered toward the growing BPO industry. First-class rental and selling rates, new facilities and prime locationing mean that more BPO companies will be looking to make long term real-estate investments in the Fort as the district continues to thrive.”

KMC-MAG Group is a brokerage company that assists clients interested in establishing business in The Fort, and other business districts in the Philippines. They also provide top-notch service to clients in need of office or residential space. Whether for rent, lease or sale, KMC and it’s experienced team of brokers will guide you along the way.

Arroyo visits Inquirer in media charm drive

MANILA, Philippines—President Gloria Macapagal-Arroyo has embarked on a tour of private media outlets—including those known to be critical of her administration—in what an aide described as an effort to be “more properly understood and appreciated” by the media.

But she has done so under her own terms—no discussion of politics.

On Tuesday, Ms Arroyo hosted dinner at the Philippine Daily Inquirer office in Makati City, the third stop in her newspaper tour.

The affair was generally cordial with Ms Arroyo talking about her fitness regimen, eating habits, and the BPO (business process outsourcing) sector, the only topic she agreed to be put on record.

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Ayala BPO arm buys US firm

Ayala Corp., the country’s largest business group, on Wednesday disclosed that its business process outsourcing investment arm has acquired a US-based “strategic research and decision support firm”.

The acquisition of Grail, based in Cambridge, Massachusetts was done through Integreon, owned by Ayala’s BPO investment arm LiveIt Investments. Grail was acquired from Monitor Group, a global advisory, capability-building and capital services firm.

Terms of the transaction were not disclosed.

Among Grail’s clients are Microsoft, cosmetics giant Estee Lauder and majority of the top 10 pharmaceutical companies.

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The benefits of living high

Just a few years back, living in a high-rise condominium was simply out of the question to most Filipinos. This is because the dream of owning a plot of land wherein they could build their “dream home” has remained one of the strongest aspirations most Pinoys have.

Fortunately, this dream is still attainable. However, one could safely say that the demands of modern-day living) has changed this mind-set a bit. Living in a high-rise at the center of the metropolis is truly more preferable at times, than living in sprawling suburban communities that necessitate twice daily two-hour commutes.

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