NCR Remains BPO Preferred Location

Rappler by Mick Basa, 11-27-2014

MANILA, Philippines - Drumbeating "next wave cities" in the Philippines to foreign locators remains a tough marketing act, as majority of foreign investors still prefer central business districts (CBDs) in Metro Manila.

While some business process outsourcing (BPO) firms have expanded in outlying cities, many still opt to set up in the National Capital Region, citing well-planned development, said Jose Mari Mercado, president and CEO of the IT and Business Process Association of the Philippines (IBPAP).

"If given a choice, I'd like to go to Metro Manila. That's the normal reaction of businessmen from North America," Mercado said.

Real estate experts cited Taguig's Bonifacio Global City (BGC) as a preferred location, a growing supply of office space, along with well-developed infrastructure.

Apart from BGC, Mercado said another CBD is being eyed as theemerging BPO hub: the Vertis North behind Ayala's TriNoma mall in Quezon City. The project is one of the 6 growth centers unveiled by the Ayala group this month.

Every year, IBPAP conducts a study of "next wave cities" which provides information on cities outside Metro Manila, covering population; educational infrastructure; telecommunications infrastructure; local Philippine Economic Zone Authority (PEZA) zones; and other data of interest to them.

But KMC MAG Group's head of investments Jose Carmelo Porciuncula said: "It's not an easy sell. We are trying to figure out how to bring more investments toward other alternative locations."

"They're trying to defend in front of their investment board where Iloilo is, where Sta Rosa is," Porciuncula added.

'Next wave cities'

BPO expansions are deemed important investments for other cities outside the capital due to employment opportunities.

Bacolod, Davao, Iloilo, Metro Cebu, and Sta Rosa, Laguna, have been identified as "next wave cities" due to an increase in its business continuity, cost competitiveness, infrastructure, and talent pool.

For instance, Cebu is home to more than 20 BPO companies, employing about 200,000 workers, Mercado said.

There are 20,000 employees engaged in the BPO sector in Bacolod; 20,000 in Davao; and 2,000 in Iloilo.

The Philippines remains a strategic location for BPO companies, due to its time zone, English language proficiency, and culture, said Canadian Chamber of Commerce of the Philippines President Julian Payne.

"To ignore those would be just hiding your huge potential for growth," Payne said.