Last week, we started this 2-part series as Business & Leisure’s yearend report, as we have always done as the year comes to a close.
For this, the second part, we start off with the IT-BPAP (Information Technology Business Process Association of the Philippines). Association president Mr. Jose Mari Mercado said that the outsourcing industry continues to grow this year with $18 billion in sales, with roughly one million Filipinos employed by the industry. Talent is their biggest asset, or liability because like the tourism industry, they are always in search for a certain level of competency and skills, which many of our graduates do not possess. Because of this, they started working with the Dept. of Higher Education and developed a Service Management Program, a 21-unit training program that is now being rolled out in 17 state universities and colleges in the last two years of their college course. The tourism industry which includes hotels, resorts and casinos is hoping to employ more Filipinos, with one casino advertising to fill out 8,000 positions versus the IT-BPO’s 140,000 expected job vacancies to fill.
The health care work coming from the United States continues to top the list of best-performing sectors here as well as the back-office sector, specifically in the field of accounting. With about 3,000 new CPAs every year, the Philippines seems to be an ideal location indeed for this particular need.
The fields of animation and game development, however, are not doing as well because of stiff competition and our lack of skills development, which prompted the Board of Investments to look at these as their focus points for 2015 as far as marketing and promotions are concerned.
In the voice sector, the Philippines is far, far ahead of other countries including India ($10 billion for Phl vs. $7 billion for India), but overall, India still tops the list at $70 billion against our $18 billion. The association aspires to reach $25 billion by 2016, and hopes to have the first batch of 1,000 interns in their 2-year educational program. So far, they have trained 83 teachers in the Calabarzon region, and develop the Next Wave Cities together with TESDA.
HOUSING – The president of CREBA (Chamber of Real Estate & Builders Association) Mr. Noel Carino notes that 2014 was a very good year for expansion, with new urban centers created, better than 2013 indeed. According to Mr. Carino, our housing backlog stands at 5 billion, and this Congress has attested to, and as our economy continues to improve, he hopes that more responsive programs will be initiated. Outmoded laws and ancient programs have to be thrown out, housing being a vital component of all the important developments happening in the country now.
The opportunities still lie in socialized housing, which, Mr. Carino says, can still be a profit center. A Housing Summit, the first ever in the country, will be called through the initiatives of Sen. JV Ejercito and Congressman Albee Benitez, with CREBA as lead convenor next year. All stakeholders and relevant associations will be invited to this public-private endeavor where CREBA hopes responsive resolutions will be adopted.
CEMENT: This industry grew by 8 percent in 2014, according to Mr. Ernesto Ordonez, president of CEMAP (Cement Manufacturers Assoc. of the Philippines). The price of cement now is better than stable, he says, with a bag of cement now costing P210, down from P220. Cement smuggling has also been minimized with the recent interception of six big shipments from Vietnam and China of sub-standard quality cement that were mis-classified to boot.
The Philippines has the highest standards of quality as far as cement is concerned, with testing conducted every month as against every two or even five months with other countries, and the only one with a proficiency lab. With the government having increased its infrastructure projects by 30 percent this year, and another 26 percent in 2015 (excluding PPP projects), the industry has built up their capacity in order to fully serve the requirements. CEMAP has maintained its leadership and has started its own website in the ASEAN region, and is proud to have the best quality and cheapest price in the region.
EXPORT: This sector is still the best performer in the region, according to Mr. Sergio Ortiz-Luis, president of PhilExport, despite the odds. The port congestion certainly impacted both the import and export sectors in terms of soaring expenses and turn-around time, lost customers and shortage of available merchandize. The PhilExport president looks at it as a policies-and-procedures problem, and despite the government pronouncements that the issue is being addressed, many are not convinced and expect the port congestion to linger
They expect a 5-6 percent growth for exports in the Philippines, but because our economy continues to be small compared to, say Malaysia, this figure is comparable to a 2-3 percent growth in more stable economies. The new Customs Law offers a beacon of hope, which might make the ports more of a trade facilitation area than simply just a tax collection one for Customs.
ELECTRONICS: Mr. Danilo Lachica, president of the Semi-conductors and Electronic Industries in the Philippines (SEIPI) says the industry is looking at a 5-8 percent growth in their sector, which is good news indeed, considering the 4 percent contraction in 2013. In fact, this is despite of the monstrous effects of the port congestion. In this industry, 70 percent is attributable to semi-conductors where logistics happen by air, versus the 30 percent of electronics where the materials come in and finished products leave through the seaports. For the electronics, we’re talking of manufacturing services for consumer goods, automotive electronics and office equipment. Some companies were so badly affected due to lack of materials that they have stopped work and sent home their workers.
The impending power shortage is a major issue for them in 2015, as is the need to localize our materials because as things stand now, between 60-70 percent of their materials are now still being imported, which makes them vulnerable to delays in shipments. Likewise, the number of holidays in the country, which increases their labor cost by 30 percent, considering the fact that most of the companies work 24/7. Traffic, hijackings and pilferage continue to be major concerns. On top of these, the K-12 educational system is pushing back the availability of qualified workers, and the brain drain continues, which makes our talent pool even smaller. Mr. Lachica hopes that the electronics industry can be re-invented so as not to be dependent on test/assembly of legacy products or contracting manufacturing services but in the “wave of the future”. The association president acknowledges TESDA, PEZA and DTI as their best partners.
FRANCHISING: The Philippine Franchise Association (PFA) vice president Ms. Bing Limjoco acknowledges the brisk growth of franchising in 2014 especially in the food sector. While the global growth centers on health and wellness, there is now a growing acceptance at home for healthy food and “vegan” dining.
The government has finally giving them support, with CITEM footing the bill for the booths they had in their first franchise show in Jakarta where nine of our local retailers participated.
In 2015, they will have their two annual shows, but in October next year, they will stage the Retailers Conference & Expo, with eighteen countries participating. In February, they will have a trade mission to the US, and they will be conducting road shows next year as well and have tied up with the SM Malls to hold franchising seminars.
Mabuhay!!! Be proud to be a Filipino.
Comments: businessleisure-star@stv.com.ph / sunshine.television@yahoo.com