The Future of BPO and KPO: Next Wave Cities in the Philippines

As the Philippines continues its growth as the world's largest exporter of BPO and KPO services, its range of next-wave cities has also expanded over the years. Next wave cities are viewed as emerging information and communications technology (ICT) hubs selected based on available labor force supply, telecom infrastructure, and other factors needed to sustain a BPO industry. These locations may also have developments, signaling investor interest in the area.

In case you are looking for an office space or a new location for a production or manufacturing facility, here are some of the next wave cities to look out for:

Cebu City

According to global advisory firm Tholons' Top 100 Outsourcing Destinations, Cebu is the 8th most important outsourcing destination in the world. The city quickly grew its popularity with its English-speaking labor pool, extensive port facilities, and proximity to major air and boat routes. In 2012, the city posted a growth rate of 18.8% in real estate sector, signaling high investor confidence and strong economic indicators. Today, it houses over 98 BPO and IT companies, employing over 95,000 people. As of this writing, 100 commercial buildings in Cebu are in the pipeline and will be completed by 2015, and another 170 to 200 buildings are anticipated for turnover in 2017.

Davao City

Another next wave city on the rise is Davao City, which already owns the 69th spot in the Tholons' world rankings as a BPO hub. The city's strategic location, modern infrastructure, and low crime rate make it one of the fastest-emerging BPO hubs in the country. Currently, the Davao government is conducting studies to increase the province's investment potential as most of the investments are focused on the capital Davao City. Major players have already shown interest in expanding in the capital. Operating PEZA-accredited IT parks are Damosa IT Park, Abreeza (Ayala Land), Robinsons Cybergate, Luisa Avenue Square IT Center, NCCC IT Building, and SM City Davao IT Building.

Baguio City

Baguio joined the roster of next wave cities in 2010, ranking 9th among the preferred sites for BPO companies based on the rankings of DOST and ITBPAP and 99th on the Tholons' world rankings. Its cold climate, lower prices for food and other commodities, as well as talented, workforce (graduates from UP Baguio, Saint Louis University, as well as graduates from nearby provinces Pangasinan, Ilocos Sur and Norte, and La Union), are just some of the factors that encourage entrepreneurs and BPOs to choose the city. Some BPO firms currently operating in Baguio are Convergys in Baguio Ayala Land Technohub and Sitel in Baguio City Economic Zone.