Outsourcing comes  to the rescue of RP property market

The 1997 Asian financial crisis left the Philippine property market reeling but business process outsourcing (BPO) came to the rescue, breathing new life into old office buildings and sparking a building boom in cities throughout the country.

Today, the business district of Makati is bustling round the clock as an army of workers from call centers and other agencies service their clients from all over the world.

Both the government and the business sector expect more investment in the coming years, especially in the business process outsourcing (BPO) industry.

BPO involves the contracting of a task to a third-party provider. Services include call centers, financial management, software writing, medical and legal transcription of files and even animation.

Socioeconomic Planning Secretary Romulo Neri said the Philippines expects such BPO functions to bring in $3 billion in revenues this year, with annual revenues of $10 billion  in five years.

“That is why the real estate industry has gone up significantly in the past two years,” he said.

Industry leaders have placed the Philippines just behind India as the ideal place for BPO investment, thanks to the country’s highly educated, western-oriented, English-speaking population.

The BPO industry was still in its infancy in the Philippines when the financial crisis hit, causing economic growth to come to a halt.

Office buildings that were started in the boom period of the early-1990s were completed just after the crisis hit.

As a result, many of these shiny, new structures were left with a shortage of tenants as corporations cut back.

Mitch Locsin, executive director of the Business Process Association of the Philippines, the local BPO industry group, recalled how gloomy Makati was in those days. “The buildings were empty with office space priced at P300  per square meter.”

In 2000, BPO industries, including call centers, took off and have kept on growing, he said.

“If you are looking at a class A office space in Makati, there is nothing left. It is all fully booked,” Locsin said.

Locsin estimates that there are 230,000 people involved in the industry now and numbers are growing.

The government’s Board of Investments expects there will be more than 920,000 Filipinos working in BPO centres by 2010 as existing businesses expand and new investors come in. — AFP