BPO, Property Sectors No Strange Bedfellows
by Dennis Estopace | Business Mirror , 10-08-2012
The business process outsourcing (BPO) sector generates billions
for the country and probably millions for the real-estate
Jose Carmelo J. Porciuncula, head of business operations and
capital markets of property-management firm KMC MAG Group Inc., and
Michale McCullough, the firm's co-founder and managing director,
agreed. Porciuncula and McCullough said they believe that the
BPO sector "contributes a lot" to the property sector's growth by
stirring not only the office-space market but also the retail
sector. Also, according to McCullough the BPO sector is
helping build a really strong middle class. He said commercial and
office spaces in Metro Manila are 99 percent leased out because of
call centers, where the sector hold fort. "We're seeing the
biggest year in terms of take-up, and the year  is not over
yet," McCullough added.
KMC MAG Group Inc. posted P3.4 million in revenues at
end-December 2009 and is predicting a 0.4 to 0.5 million-square
meter take-up at year's end. Porciuncula said that they have
seen such brisk deals at the Fort Bonifacio commercial business
district. "Here, as soon as a contract is signed and the buildings
rise, lights come on after two months." Those lights might as
well be shining on the Philippine BPO sector, whose revenues,
according to a statement from the International Outsourcing Summit
(IOS), grew to $11 billion in 2011.
The 201 revenues accounted for close to 13 percent of total
global industry revenue if $87.32 billion, according to the
Business Processing Association of the Philippines (BPAP) and
India's National Association of Software Services Cos.
(Nasscom). The local BPO industry is also credited with
helping in job generation as direct employment jumped 44 percent
from 423,000 in 2009 to 638,000 in 2011. If the Philippine BPO
industry "grows another 20 percent this year, considered by many to
be at least a somewhat conservative estimate, revenues will exceed
$13 billion and account for a slightly higher share of the rapidly
expanding global market pie," the IOS statement said.
While the Philippines is considered the global leader in voice
services and a strong competitor in complex, non-voice services,
India still accounted for 58 percent of global IT [information
technology-BPO revenues in 2011 on the strength of IT and software
services," the statement added. "Software and software
services account for the vast majority of India's IT-BPO export
revenue - 87 percent of exports - and Nasscom says software and
services will grow almost 15 percent this year," it said.
In contrast, the non-voive BPO services in the Philippines
accounted for almost 33 percent of totla IT-BPO revenues last ear.
Such BPO services ranged from health-information management to
engineering and project management services. "Although
voice-services revenues continue to grow rapidly at around 20
percent, growth in the non-voice services is outpacing growth in
voice services," the IOS statement said. The statement added
that health-information management "grew more than 170 percent last
year, and IT outsourcing, which includes software and software
services, expanded almost 40 percent."
Porciuncula and McCullough said the party's not yet over for the
Philippine BPO and real-estate sectors. "It will [be over] if
the BPO [sector] stops growing 20 percent to 25 percent annually,"
according to McCullough. Porciuncula said the party would go
on especially if other players who have been invited show up.
Anna Marco, KMC MAG Group Inc. Associate Director, said the
noise does not come only from big-named BPO firms. "Call
centers start at small scale, and when they grow, they would
eventually drive office space. So while we're seeing the bigger
ones growing even bigger, it should be noted that smaller ones are
also coming in, providing the continuous cycle marking this the
golden age of both the property sector and the BPO industry," she
And, Marco added, "If the government and the private sector work
[together] well and form a proper labor pool, especially the 18 to
25 age group, and we keep producing good graduates from which
business can draw from, I think we're good, not just for BPO
Indeed, the sector has been short of what the BPAP described as
"quality" workers. Since 2009, the BPAP has embarked on a
program to generate manpower to meet the demand for such workers,
with the Aquino administration throwing it support on top of
existing trade incentives given to the BPO sector.
Last year the government said it will release P500million ($11.6
million) to help train "knowledge" workers for the sector. "A
stable supply f qualified labor is among the top concerns of IT-BPO
executives, who believe that the industry can continue to grow
between 20 percent annually if labor supply is sustained," the ION
The BPAP has said it is targeting this year $17,000 college
graduates and other professionals who might consider a career in
the BPO sector. The sector aims to generate 1.3 million jobs
Its work force stands at 640,000, according to the Healthcare
Information Management Association of the Philippines. The
association was looking at some 400,000 unemployed nurses as of
February this year and hoping that some in this idle batch might
give a BPO career a shot.