New wave cities seen as alternate business sites to decongest Metro
Inquirer.net by Matikas Santos, 09-23-2014
MANILA, Philippines-The expansion of Business Process
Outsourcing (BPO) companies in several "next wave cities" outside
Metro Manila may soon help decongest the Philippine's capital
region, an international real estate services firm said.
KMC MAG Group said that there is a growing demand for BPOs to
expand to sites outside of Metro Manila driven primarily by the
desire to lower attrition rates, which in some companies are up to
100 percent annually.
"There are sites here in Metro Manila where they lose a thousand
employees resigning every month," Gerold Fernando, KMC MAG
Associate Director, said in a recent roundtable discussion with
"If you put a site where these people live, [attrition is] cut
down to a significant number, a tenth probably, because the cost of
living is cheaper and you work where you live," Fernando said.
"It's a win-win situation for the company and for majority of the
Among the potential Next Wave Cities around Metro Manila are in
Laguna, Cavite, Pampanga, Bulacan, and also Clark.
Meanwhile in the Visayas region, Iloilo and Bacolod are seen as
the Next Wave Cities around Cebu. In Mindanao, Cagayan de Oro is
being eyed as a Next Wave City near Davao.
"[Expanding to the Next Wave Cities] promotes decongestion of
Metro Manila and promotes uplifting the economy of these Next Wave
Cities. It increases middle income earners making it advantageous
in all aspects," Fernando said.
Michael McCullough, Managing Director of KMC MAG, however, noted
that several key components are still missing in these Next Wave
Cities to make them more attractive to international investors.
"Educational institutions are there, the labor is there, but
there's not a whole lot of available office space there. If you've
been driving in the province you don't see a grade A office space
just waiting to be leased," McCullough said.
Gerold Fernando, Associate Director
"You can't fly some Americans in and take them to a grassy patch
of land and say 'this will be your office, I promise it will look
like this picture.' They don't buy it. They have to see something
that exists and those are mostly always in Metro Manila, Metro
Cebu, and Davao now," he said.
Some BPOs however are bold enough to take the risk in building
sites in Next Wave Cities and some get rewarded when their gamble
works, McCollough said. But when they do succeed in expanding to a
site outside Metro Manila, the big BPO companies are sure to follow
suit in that location.
"The people are easiest for BPOs to find, they already have
[them] inside their company. The Human Resources team says that a
percentage of workforce actually live in Bulacan, for example. So
if they locate to Bulacan they can just promote them or transfer
them," McCullough said.
"They can make the same amount of money and they will have a
shorter commute, they're gonna be happier and less stressed. It's a
win-win for a lot of people. The idea is to help with that trickle
down effect by improving the local economies," he said.