The National Economic Development Administration has acknowledged that the Business Process Outsourcing or Information Technology industry, which celebrates its tenth year today, is the major economic driver in Central Visayas. Of course when NEDA says Central Visayas, it's 99.9% in Cebu City. As reported in SunStar last Monday, the government earned P435.4 million in taxes and fees from the BPO/IT industry.
I'm glad that NEDA is finally acknowledging this fact. In the early 2000 during one of my interviews with my good friend, Joel Mari Yu of the Cebu Investment Promotion Center he told me straight to my face that the furniture industry was a sunset industry and I thought that this industry would stay with Cebu forever. But Joel was correct, the furniture industry was sinking fast and the US recession fast tracked the collapse of the US housing sector, which resulted in a chain reaction to our furniture industry. No new homes, meant no new furniture! As they say, nothing lasts forever!
But while Joel issued that clarion call for NEDA or the local government units to come up with ways to prop up the furniture industry. None of them lifted a finger and soon, furniture companies folded left and right and now only a few remain. Perhaps after US President Barrack Obama exits from the White House, the American economy might just bounce back (there are already encouraging signs from what I gathered from Bloomberg TV) and the housing market in the US may boom once more. I just hope that Filipino businessmen especially those who were once in the furniture industry would bounce back with it.
But that interview with Joel Yu wasn't all bad news because he pointed to me that a new opportunity was already on our radar screens, though still off the horizon, called the BPO/IT industry. But then when you talk about IT or BPO I felt that it was too technical for Filipino entrepreneurs. But then that was in the Year 2000 and three years later, the AsiaTown IT Park was launched and Cebu took the right path to grow with this industry.
Go to AsiaTown IT Park and you will never see any 10-year old buildings there that used to be the Lahug Airport. Most of those buildings are less than five years old. Before the explosion of the BPO/IT industry, the tallest buildings in Cebu were the Marco Polo Plaza Hotel or the MetroBank Building. Prior to that it was the Ludo & Luym Bldg. in downtown Cebu City. Of course, Mango Ave. will soon have the distinction of having the tallest building in Cebu when the 101 Tower will be completed. But the most number of tall buildings in one place can be found only in the AsiaTown IT Park.
Last March 2012 during a golf game with Joel, he told me that the BPO/IT sector in Cebu City already shifted from just call centers to Knowledge Process Outsourcing or KPO's. KPO's already had 52 companies hiring some 45,000 employees, which meant that out of the 75,000 employees in the BPO/IT industry only 30,000 are now working in call centers. This is a dramatic shift, which makes Cebu City even more attractive to foreign in-vestors, which should be more encouraging for young students who may want to work in the BPO/IT and now KPO industry.
To think that less than five years ago, Cebu City was tagged by Tholons Survey as an "Emerging BPO Destination." Two years ago, Cebu City made it to the top 10 BPO's in the Tholons Survey. Yesterday, I received in my email the Overall Rankings for the Year 2013 collated by Tholons and Cebu City was still at number 8th. The number one BPO is Bangalore, India, followed by Manila, which is followed by the Indian cities of Mumbai, Delhi, Chennai, Hyderabad, Pune and Cebu City. After Cebu City, number nine went to Krakow in Poland and Dublin, Ireland came in at number ten.
However just because Cebu City is in the top ten list of the Tholons Survey, it doesn't mean that we should sit on our laurels and enjoy this enviable distinction. If you ask me, NEDA must come up with schemes and programs to bring in more BPO or KPO companies to invest in Cebu City, which means, improving conditions that turn off these investors like bad traffic or uncollected garbage or poor planning and yes, more incentives, which NEDA and most especially the Bureau of Internal Revenue should sit down together to make things easy for the foreign investor. Why the BIR? I just heard that the BIR doesn't submit to what incentives that the government has prepared for these foreign investors.
Today the BPO industry has some 250,000 direct employees. Add 200,000 indirect employees working in the service industry and this is the principal reason why the skyline of Cebu changed so rapidly. But other cities like Kuala Lumpur, Beijing, Hanoi, and Shanghai are offering better incentives. So if NEDA doesn't give out the best incentives, we could lose it all.
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Email: vsbobita@gmail.com.