Software developer pushes for Philippine tech talent


Exist Global CEO Jerry Rapes explains the advantages of using the Philippines as an IT option, at a tech reception at the Philippine Consulate in San Francisco.

SAN FRANCISCO – As the overall performance of the Philippines inches up higher, more businesses are considering the Philippines as the first-option for their software development outsourcing initiatives–and not just for call centers, reported the chief executive of a Philippines-based software development firm.

“Call centers are still our top money makers but we’re not encouraging them,” explained Exist Global, Inc. CEO Jerry Rapes at the recent “Tech Innovation” greet and meet at the Philippine Consulate here.

Exist Global, Inc., an outsourced software development company in the North American and European market, provides architecture and design consulting, application development, independent quality assurance, application maintenance and technical support services.

“The Philippines has plenty of technical talent,” he continued. “English-proficient and amazingly collaborative individuals not just in Manila, but also in IT hubs such as Cebu, (former US Air Force Base) Clark, (former US Naval Base) Subic and Davao.”

Other least known Philippine IT-BPO hubs include Sta. Rosa City, Laguna, Bacolod, Iloilo and emerging Baguio City.

Philippine Trade Commissioner Michael Alfred Ignacio echoed Rapes’ sentiment. “The Philippines used to be known as the Dark Horse of Asia. Now, not to be in the Philippines is to make a competitive risk.”

Rapes made the numbers talk: “According to (the globalization advisory firm) Tholon, Manila displaced New Delhi, and Cebu displaced Dublin, Ireland in the 2012 Top 100 Global Outsourcing Destinations.”

“Software services outsourced to the Philippines were posted at $1.5 billion, a 50 percent growth last year. There was also a 10 percent increase in the employment of Philippine IT professionals of about 55,000. And the IT-BPO revenue was at an all-time high of $13 billion– an 18 per cent growth, employing more than 780,000 in the Philippines last year.”

Top in business English

Rapes revealed that (cloud-based English literacy provider) Global English Corporation ranked the Philippines number one in the world for Business English proficiency. “Some countries turn to the Philippines to learn (Business) English. There are six direct flights from Korea to Cebu,” he added.

When language is not a barrier, negotiation is always “sweet.” Rapes declared, “Some (outsourcing provider) countries nickel and dime you. But in the Philippines, they just charge you one fee. No extras for bandwidth and other details.”

The Philippines has an annual average of 500,000 graduates every year, Rapes reported, some 200,000 them in medical/health sciences (“for your tele-medicine and transcription needs”). An estimated 180,000 are in engineering/IT related courses (“the IT courses in the Philippines are a little different in that they are apps heavy”). Almost 120,000 are in business courses. This sets the Philippines apart for scalability. “You will find your niche and the technology you want in the Philippines,” Rapes claimed.

One admitted problem is the high churn (turnover) rate, or staff retention. Rapes said the Philippines needed more middle managers to retain growth momentum. “The churn rate is almost 75 percent a year. It drives up hiring expenses. You are in a place where you could come back from lunch with a new hire. There’s no at will employment in the Philippines, and it’s very hard to lay-off people.”

Still, Rapes said, “the Full Time Engineering (FTE) revenue or bill per year for engineers in the Philippines is from $8,000 to $9,000, compared with $40,000 in India.”

Incentives to tech investors

Rapes was in the council that put together the US-Philippine Business Support and Delivery last year, to bring jobs and project to the Philippines.  Among the results of this are the added benefits that the Philippine Economic Trade Zone Authority (PEZA) provides to foreign technology investors.

Aside from cutting out the bureaucratic red tape, PEZA grants foreign investors exemption from corporate income tax for four to eight years. After that expires, a five percent gross income tax can be opted instead of taxes.

Also granted are exemptions from duties on imported capital equipment, raw materials, supplies and even spare parts. Exemptions also include wharf dues and export taxes. There’s a 50 percent total cost reduction on manpower training. And permanent resident status is given to foreign investors and their immediate family members.

PEZA has reportedly 137 economic zones in the Philippines with a reputation for a four-day turn-around time for electronics. Also, it is a 24/7 “non-stop shop.” Rapes said, “It is one of the few government agencies I know where zone Director General Lilia De Lima will sign documents in front of you.” Rapes added that Subic, Clark and the Board of Investments all grant the same benefits as PEZA.

Rapes believes that the Philippines is seeing its growing share of techno-alphas for several reasons.

“Successful US-based Filipino entrepreneurs like Dado Banatao; (Exist Global, Inc. co-founder and CEO of the world’s leading cloud provider, Morphlab) Winston Damarillo;  (Founder of the largest and fastest growing service provider to find care givers, Sheila Marcelo and others have decided to come to the Philippines to share their experiences and mentor our young entrepreneurs. “

The Philippines’ IT sector can learn from being exposed to Silicon Valley, Rapessaid. “Our returning entrepreneurs have started the initiative of sharing this innovation mind set. We just need to be focused and consistent because it’s a long term initiative.”

The collaboration among government, industry and academe has been enhanced in the Philippines, creating the right ecosystem, business model, infrastructure and supply of talent. “The Philippines is currently in a perfect position to grab international recognition due to its sound business environment and performance.”

And don’t forget the fun factor. Rapes said, “We always keep our relentlessly happy psyche no matter if bad weather hits us or if projects hit a snag. I know there are hard-working engineers everywhere, but Filipinos have the most cheerful spirits of them all.”

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  • xasthur abao


  • mjp78

    Every talent, skill, english proficiency will not cut it, until the base business infrastructure and support system improves. Electricity cost is high, internet is slow, government is slow and corrupt, work commute long and stressful, to name a few. Do you honestly think business will thrive here?

    • Mozart Blues

      Hi, you are 100% right!

      As an American business man in Phils, the landscape is horrid for all the reasons you mentioned, also the barrier of entry for foreign investment is in the dark ages, unless you deal with the likes of Lucio Tan and Henry Cy, these people have done so much harm for Filipinos.

      The government corruption is massive, the world knows this, don’t see any improvement in the near future, guess Phils needs to get worst before voters think about getting better politicians…

      • mjp78

        The midterm elections just ended…and yeah it would seem you are right…the country needs to get worse for the voters to change…the only question is how low should the country go? It might be a bottomless pit for all we know…

  • sheina83

    Out of Topic, pero what an unfortunate last name, Jerry Rapes.

    • marienkind

      First thing I noticed too. Yes, I have no life.

  • pinoynga

    The IT sector and software design in particular are growth areas where Pinoys can excel and compete globally. We have the talents and expertise. We only need true leadership in helping and growing this sector. Next to the entertainment industry, the IT sector should be able to promote Pinoys who can be superstars in the IT field and software design.

  • gilbs72

    We should also look into microelectronics design. This is very similar to software design in terms of required skills, just a different area – and higher value. We’re being left behind by other Asian countries.

    • Mozart Blues

      “We should also look into microelectronics design. This is very similar to software design in terms of required skills”

      As a software developer for 20 years also worked with firmware, this is not true, you need to consider the human interface is not the same as a device…

  • kismaytami

    Karamihan sa mga local IT professionas, kumukuha lang ng experience locally tapos aabroad na. Paano ba naman kasi, kung ikukumpara sa kinikita ng mga IT professional abroad eh nickel and dime lang ang pasahod ng mga IT company dito sa bansa. At ang talagang nakikinabang ay ang management, at nakuha pang humingi ng tax breaks para mas malaki ang tubo!

    • mjp78

      Haha…management ng isang IT company eh dapat mga IT din…problema kasi sa ibang mga non-IT papasok management…lol..kala mo sila ang magbibigay ng value…anlalaki pa ng sweldo…wala namang alam sa IT…

  • OFW Watch

    At OFW Watch, we applaud the Philippine IT-BPO Industry. When they say they have created 780,000 jobs – what they really mean is..

    There are now 780,000 mothers, fathers, sons or daughters who will now stay in the Philippines instead of being ripped from their families and shipped overseas. Keeping our families intact is priceless.

    On a side note, we hire quite a few programmers at OFW Watch and we can attest to the skills of our own young Mindanao programmers.

    Saludo ako to the Philippine IT-BPO Industry.

  • farmerpo

    Yessssssssss! We should not be shooing away our very own talents. Let the big guys come over. Give them the tax breaks etc so that they will come over in droves…

  • balikpinoy

    Unfortunately, Rapes doesn’t highlight the fact that maybe at most , only 15% of IT graduates in the Philippines are actually qualified. The rest need at least a year training to get to basic entry level as many of the so-called IT schools in the country really are there to extract the hard-earned tuition money from their students and their parents and have no concern for quality of their instruction or instructors.

    • Mozart Blues

      Yes, and 15% is a generous number, the staff will require significant training, mentoring and supervision for productive endeavors, My wife a nurse in Miami for major hospitals reveled the same, in fact, many hospitals stop “importing” Phils nurses for the same reasons.

      I, personally, see potential in Phils for software business, mainly based on my 20 year development experience, however, even in the USA, good management is sparse, so the lower resource expense with Phils software developers will not cover the delays and lack of quality…

  • superpilipinas

    More of this is what we need and the government should make a significant effort to contribute in order for the private sector to flourish. This is how S. Korea, Japan, and Taiwan grew fast.

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