General Santos emerging as BPO hub in Central Mindanao
INQUIRER.net
First Posted 10:02:00 09/27/2008
Filed Under: business process outsourcing (BPO)
GENERAL SANTOS CITY -- More business process outsourcing (BPO) offices are likely to open in Mindanao as key cities like General Santos continue developing business environments especially attractive to information technology (IT) firms.
"Mindanao and its major cities should be aggressive in their campaign to improve the talent, infrastructure and environment needed to advance in the sector of IT and IT-enabled services," said Maria Jamea Garcia, executive director for talent development of the Business Processing Association of the Philippines (BPAP).
According to BPAP, the country is well positioned to corner a 10-percent share of the global outsourcing and offshoring market by 2010, with potential revenues of about $13 billion and additional direct employment of close to one million workers.
Mindanao cities like General Santos, Iligan and Zamboanga have strong potential as competitive offshoring sites—particularly when the labor and infrastructure resources of their neighboring municipalities and provinces are factored in, according to USAID's Growth with Equity in Mindanao (GEM) Program, which is helping to facilitate BPO investment in the region.
"Developing these additional cities would help the Philippines achieve a more balanced distribution of growth [in the BPO sector]. This will ease some of the pressures on costs and help seed development in other parts of the country," Jamea said.
General Santos City, or is the trading and agro-industrial center of Region 12, which encompasses the provinces of South Cotabato, Cotabato, Sultan Kudarat and Sarangani. The regional capital is Koronadal City, less than an hour away from General Santos City.
"General Santos is known as a highly competitive city and the region's entrepreneurs continually think in terms of a global market," said Ellorence Cruz of the Board of Investments in Gensan.
Bing Garcia, vice president and COO of Marbel Telephone System, Inc., said his company has begun laying down a fiber optic network, which he calls the "Ring of Fiber," connecting General Santos City and South Cotabato and Sarangani provinces.
Tacurong City and 11 municipalities in Sultan Kudarat province will also be connected to the fiber optic network, under the Sultan Kudarat Telephone System, Inc.
The "Ring" is being established in preparation for General Santos' planned WiMax system, a wireless digital communications system whose broad coverage can be extended to its outlying districts and rural areas, much like a cellphone network.
Anticipating the expansion of the local BPO sector, General Santos businessman Jan Ced has established the 2.8-hectare Mabuhay IT Park in the city center, a one-stop, fully secured facility capable of carrying voice, video and data services, with backup power supply.
At least seven medical transcription companies and two BPO accounting companies are already operating in General Santos and in Koronadal. In Tacurong City, 25 agents are employed by IQ Scribe, a private healthcare solutions/transcription company.
From his remote desktop in General Santos City, Delmer Paraluman handles all finances and reconciles receipts and books for Arrival Telecom, a phone service firm in Utah, in the US.
"BPO accounting is a lucrative business," said Paraluman. "Foreign companies have said they prefer their accounts to be handled by Filipinos since we have a reputation for trustworthiness."
"We have clients in Manila who order from us outdoor tarpaulins," said Ronald Velasquez, vice president of IDEAS Inc., a General Santos graphic design firm specializing in large formats. "Even with the added freight and shipping, we're still cheaper than firms in Cebu and Manila."
"We're now talking with a furniture company in Europe which is outsourcing their website design to us," Velasquez added.
The cost of BPO labor and operations in General Santos is approximately 25 to 50 percent lower than in Manila and major Philippine cities like Cebu, according to the General Santos City Chamber of Commerce and Industry.
The city alone produces 4,000 new college graduates a year, most of them from Mindanao State University and Notre Dame of Dadiangas University.
"Altogether, General Santos and neighboring areas turn out 15,000 new graduates annually, many of them living a short commute away from the city," said Raymond Diaz, executive director of ICT Solutions Association, a non-profit organization that promotes the development of IT services in Region 12.
Joji Ilagan-Bian, president of the Philippine Call Center Alliance, has run call center training courses in partnership with schools in Region 12 and other areas of Mindanao. She foresees that the expansion of the BPO sector will soon draw locators to other Mindanao cities as well.
Zamboanga, the country's sixth most populous city, has steadily been supplying labor to business process outsourcing firms [BPOs] in Cebu and Manila, said Bian, adding: "Why not then relocate your business closer to your manpower source?"
She points out that Iligan City produces 2,000 graduates yearly through Mindanao Statue University's Iligan Institute of Technology, which has been identified as a Center of Development of Excellence in ICT by the Department of Science and Technology.
Under the government's Philippine Cyber Corridor initiative, these cities have been identified as promising hubs for providers of a wide range of IT services, said Patricia Abejo, director for cyberservices of the government's Commission on ICT.
"I've also partnered with a Marawi-based school and set up a training center there to explore the business potential of the ARMM [Autonomous Region in Muslim Mindanao] as a call center site," said Bian.
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