Sun.Star Economic Forum

CEBU is the most promising city worldwide in terms of hosting Business Process Outsourcing (BPO) investments, a study from a strategic advisory firm said.

Dr. Cayetano Paderanga, UP School of Economics professor quoting a report from the Cebu Investment and Promotions Center (CIPC) said BPO companies based in Cebu employ 50,000 people and there have been no reports of retrenchments in the industry.

Paderanga said the economic downturn has created opportunities for Cebu and the region.

He said it has not restrained Cebu’s fast-advancing BPO industry,  according to regional office of the National Economic and Development Authority (Neda), even if other export industries have stopped expanding and were even forced to downsize operations, the BPO and related industries have continued to expand and remain bullish.

Contributing to this development is the local officials pledged of commitment to support BPO companies in all aspects, even with their immigration concerns.

The cost of doing business in the province is also relatively lower with office space rentals only one-third of the going rate in Metro Manila and electricity rates are approximately 30 percent less than the rate in Metro Manila at P7 per kilowatt-hour.

A labor force with more than 3.7 million members is also present in the province and these workers are fluent in English, equipped with working knowledge, and trainable. Roughly one-fifth of the annual 23,000 college graduates hold engineering and computer-related degrees.

Cebu City also leads the Top 50 Emerging Global Outsourcing Cities according to a recent study released by Tholons, a strategic advisory firm for global outsourcing and investments (2009), he added.

Another driver for Cebu’s growth is tourism, Paderanga said. Cebu posted an 8.51 percent growth in tourist arrivals despite the drop in key foreign markets at the onset of the global economic crisis last year, data from the Department of Tourism (DOT) showed.

A record from the DOT’s Planning and Promotions Department revealed that Cebu generated a total of 321,116 foreign tourists in the first semester of this year and topped the over-all foreign arrival comparative by provinces.

Paderanga said there are also other industries that benefited a spillover of tourism and BPO and these are: Other
banking, construction, power, retail trade, transportation, investments related to tourist accommodations, spa centers and fitness & wellness hubs.

However, the global crisis threatens foreigners’ buying power and the manufacturing industry in the region has been in a “hemorrhagic state” due to the lifestyle change of the province’s foreign markets stemming from the economic downturn.

Paderanga said Cebu’s growth drivers are also being challenged with some problems like the lack of software developers that threatens BPO sector’s growth.

The CIPC also reported that infrastructure is Cebu’s weakest point. Paderanga said water and power supply should be the main focus and it should be privatized to ensure stability of supply. The roads should be improved to address congestion in the streets

He added that strong private-public partnership should continue to be harnessed in view of addressing major challenges, and eventually improving Cebu’s ranking.