First Metro sets aside P1B for BPO investment

First Metro Securities Inc., a subsidiary of the First Metro Investment Corp., announced it is earmarking at least P1 billion for investments in the business process outsourcing sector (BPO). 

“We are looking at allocating at least P1 billion from our equity fund for BPOs,”  Roberto Juanchito Dispo, chairman and nominee of First Metro Securities said in an interview at the sidelines of yesterday’s forum for BPOs considering equity funding. 

“BPO is definitely in our radar. We are in the process of talking to some potential candidates,” Dispo added. 

First Metro Securities recently released P10 billion to fund power projects in Visayas and Mindanao. 

At the moment, Dispo said they have not financed any BPOs but said he is going to meet with Joey Gurango, CEO of Gurango Software. He likewise revealed there are a number of other firms who have expressed interest in equity funding.

Luz Lorenzo, regional economist of ATR KimEng Capital Partners Inc. said this is not the time to raise capital by going public or listing in the public bourse because of the recent market conditions.

Meanwhile, a survey conducted by the Business Process Association of the Philippines (BPAP) showed that 32 percent of the BPOs are considering equity funding while 33 percent said they might go into equity funding in the future. 

Most of the firms or 60 percent of those surveyed said they will use the capital to expand existing facilities and develop initiatives such as setting up a marketing office overseas. A number of the respondents or 49 percent said they would like to develop new facilities while 40 percent said they would like to fund new technology.

A big chunk or 44 percent of those who consider equity funding said that they would do it in two to three years while 21 percent said they will do it sooner or within seven to 12 months.

A clear majority or 58 percent said they are looking at raising P100 million to P500 million while 12 percent said they would like to get at least P1 billion. Only three percent of the BPO firms surveyed said they would like to raise P5 billion to P10 billion. 

The survey showed that 54 percent of the BPOs prefer private placement, 37 percent said they would go for venture capital and initial public offering while 29 percent said they would like to try angel investments.