In an interview with Gigi Virata, executive director for Information and Research, BPAP, she explains why investors are now looking beyond the four walls of an office space and why this is important to them, their employees, and the country.
THE PHILIPPINE STAR: What are the Next Wave Cities?
GIGI VIRATA: The Next Wave Cities are cities and towns in the Philippines that BPAP, CICT, and agencies of the Department of Trade and Industry have selected to assess in terms of their potential to host IT-BPO companies. We excluded Metro Manila and Metro Cebu from the list because we consider these metro areas to be established BPO sites.
We assessed about 50 other cities and towns for talent availability, infrastructure, cost, and business environment, including risk management, using our proprietary Next Wave Cities scorecard. In late 2008, we announced the towns and cities that were in the top 10 of our scorecard — including hubs that are made up of more than one town or city. We published a comprehensive report on these top-10 Next Wave Cities in 2009. The top-10 Next Wave Cities for 2008 to 2009 are Metro Laguna, Metro Cavite, Iloilo City, Davao City, Bacolod City, Metro Pampanga, Bulacan East, Cagayan de Oro City, Bulacan West, and Lipa City.
The list can change depending on the metrics and corresponding weights that we select to use in the scorecard. These are determined by a Next Wave Cities Working Group made up of top executives and officials of BPAP, BPAP member companies, CICT, and concerned DTI agencies such as BOI and PEZA. New data can also cause movements in the ranking.
But more important than the ranking is that the information gathered can be used by both investors and local stakeholders to make good location decisions and to highlight strengths and weaknesses of each site. This should help encourage the spread of the IT-BPO industries away from the more congested areas and ease inflationary pressures. This was the main objective of the Next Wave Cities initiative. For government, the spread of development and employment opportunities is also a primary objective.
What does the Philippines have to offer to potential investors?
A large pool of tertiary graduates, a large English-speaking workforce that is highly trainable and works hard and well in teams, good infrastructure and connectivity, competitively priced salary rates and other operating costs, good quality of life, government incentives.
What are their criteria when they choose a location?
Investors look for specific locations that are accessible to the size and type of workforce that are appropriate for their type of service line and operating models. The presence of other companies competing for these potential employees may also influence their decision. For example, companies looking for the most highly skilled professionals, such experienced analysts, will most likely want to locate in Metro Manila where most of the multinational companies and top universities are — this is applicable to companies specializing in the most complex and high-value services (KPOs) and to shared services centers of large multinationals like financial institutions and energy companies. On the other hand, third-party providers that require a large number of English-speaking customer service representatives may choose to have expansion sites that are more isolated from their competitors — companies such as Sutherland and TeleTech employ such strategies. Being the first to operate in a smaller city outside of the NCR may allow a company to employ the top graduates in local universities.
What are investors looking for when they locate their office in the Philippines?
In general, investors evaluate potential destinations by 1) amount and quality of available and appropriate skilled workforce (also, suitable graduate pool to constantly replenish or expand headcount); 2) cost of labor, office space, utilities (telco and power), other operating costs; 3) availability and quality of suitable office space, with supporting infrastructure (including accessibility, connectivity) and amenities; 4) a business-friendly and low-risk environment (including law and regulations, incentives, security, risk management).
What are the popular locations for investors?
Metro Manila hosts the most investors particularly in Makati City, Pasig/Mandaluyong (Ortigas Center), Quezon City (UP-Ayala Land TechnoHub/ Eastwood City/Araneta Center), Taguig (Bonifacio Global City), Parañaque, Muntinlupa (Alabang), Cebu, and Clark Freeport Zone. Also, Baguio, Bacolod, Iloilo, Davao, and Sta. Rosa.
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Expanding Beyond Key Cities
Ayala Land Businesscapes expands its footprint in areas where investors can potentially locate. In all its developments, it mixes office with leisure spaces, developing office campuses that put the needs of employees in the forefront. Imagine looking out the window of your office and seeing a park instead of the walls of the building next door, or stepping out of your cubicle and not having to walk far or commute for coffee and lunch.
Ayala Businesscapes’ One Evotech in the NUVALI TechnoHub, Laguna is turning out to be a dream place to work in with its low-rise buildings, Wildlife and Bird Sanctuary, and water features. In Cebu, it is building The Peak at Cebu, the first in the 5.3-hectare development called Asiatown IT Park. In Davao, Ayala Land Businesscapes is building the five-story E-Services Building at Abreeza, a mixed-use, 2,500-square-meter structure designed to support the lifestyle of call center agents and is in close proximity to the city’s biggest universities. In Iloilo, it is building the Iloilo TechnoHub, composed of three buildings with support facilities for BPO firms and is close to schools, hospitals and the downtown area.
In all its projects, Ayala Businesscapes subscribes to the new way of designing office campuses: near universities that offer a pool of talented and skilled workers and communities with developed infrastructure and environments that offer tax incentives to investors. In providing the platform where industries can flourish, Ayala Businesscapes is helping the communities flourish as well. Because as more offices are built, more jobs are developed and contribute to the economy. The effect trickles down and trickles up — and it spreads all across the country.