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Thursday, March 18, 2004
DTI to building owners: Host IT firms, get perks
TRADE and Industry Undersecretary Gregory Domingo is encouraging building owners in Cebu, who want to serve information technology (IT)-related companies, to register with the Philippine Economic Zone Authority (Peza) and enjoy tax perks.
“It is not difficult to apply as an IT zone with Peza, as long as there is no objection from the local government,” he said.
Like other companies registered with the Board of Investments and Peza, IT zones, which can be in the form of a park or a building, enjoy tax perks such as income tax holidays and tax exemption on imported capital equipment.
To date, there is only one Peza-declared IT zone outside Luzon—Asiatown IT Park, which is developed by Ayala-led Cebu Property Ventures and Development Corp.
On the sidelines of the launching of the consortium of universities at the University of the Visayas Monday, Domingo said that having IT buildings in Cebu will partly meet the demand for more space for IT-related locators such as contact centers and business process outsourcing companies.
During the event, Cebu Investment Promotions Center (CIPC) managing director Joel Mari Yu said one of the things Cebu needs to immediately do to achieve its vision to become a world-class provider of information and communications technology (ICT) in Asia is to provide more IT parks and IT buildings for locators.
Shift
CIPC, which used to promote Cebu as the hub for the world’s manufacturing industry, is now focusing on attracting ICT-related foreign companies to come to the area.
“We have shifted our focus from attracting manufacturing companies to attracting IT firms after we noticed a sharp decline of interest from foreign manufacturing firms to come to the country,” he said.
CIPC has partnered with the Japan External Trade Organization (Jetro) to promote Cebu’s IT potential to the Japanese market.
Yu said the Japanese have noted Cebu’s IT potential, but said the area has a lot of small IT players that are too small to serve their needs.
This is why the Japanese are urging Cebu players to form consortia in three IT fields, which Cebu has potential in. These are computer graphics, software development and contact center capability.
Software developers in Cebu earlier said they will organize themselves to protect and develop the industry, especially the small players.
In a separate forum last week, Glenn Westerman, president and chief executive officer of Lexmark International (Philippines) Inc., urged stakeholders to provide not just office space for IT locators but also the appropriate telecommunications and power infrastructure.
He told participants to the Sun.Star Economic Forum 2004 at Waterfront Cebu City Hotel that Globe Telecom and the Philippine government are now spending a lot on telecom infrastructure.
“But a T1 line required in any IT or tech call center is (still) two to 2-1/2 times more expensive in Cebu than in India.”
India corners 80 percent of the world market in outsourced IT services.
Westerman added that brownouts and voltage regulation should also be addressed. “IT uses a lot of electrical power and well-regulated power supply—not high-voltage spikes,” he said. JBN/CTL
(March 18, 2004 issue)
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