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Thursday, May 18, 2006
Toral: Real estate developments and IT
By Janette Toral
Digital Filipino
While validating my outsourcing destination matrix report with DigitalFilipino.com club members in Davao, Cebu and Cagayan De Oro, we realized the challenges in front us of that needs to be dealt with at the earliest time.
Davao, despite being an early player in the outsourcing scene, is continuously being left behind by provinces, in terms of locator investment, in different parts of the country. This is because of the lack of buy-in by the real estate sector in their city. Up to this time, there’s no IT (information technology) park or IT zone in Davao City.
From what I was told, an IT park or zone is farfetch for several reasons. First, many people who own properties and buildings in the city have left already and migrated to another country.
They usually just come home to check on their property, pay real estate and building taxes. But they have no intention to sell or develop the land.
As a result, there’s no momentum to follow-through what the IT sector and government have started.
The Davao IT sector used to provide advice to nearby cities like Cagayan de Oro. Those in Cagayan de Oro certainly picked up the advice and have moved forward.
Cagayan De Oro City is the first location in Mindanao to have an IT park where incentives can be applied by its respective locators. Unlike in Davao where the number of IT players is gradually increasing, the IT industry in Cagayan de Oro is very much in its infancy stage where the formation of an IT association will take time. Like Davao, Zamboanga and General Santos City, it has to contend with the predicament of being located in Mindanao.
It takes a lot of convincing for a prospective client to visit the place. Some who do are so paranoid that they always look around, wary that some bad elements will stop by and abduct them.
Although there are properties being developed in these cities for IT parks, there’s no ready-made facility to prod investors to simply make a decision to go and occupy the place. The real estate players in Mindanao have to move fast in developing their areas or they’ll end up missing plenty of opportunities.
As I mentioned last week, Cebu’s main challenge is also the availability of office space, although this is now being addressed by some property developers.
Where space is not available, Iloilo provided a reasonable alternative with a significant number of manpower resource to back-up the location. In fact, it appears now that Iloilo is becoming Cebu’s formidable competitor in attracting locators.
The recent blackout further emphasized the need for a location like Cebu to have its own or alternative source of energy.
Perhaps it is time also for the Cebu community to decide on how much it wants to grow without endangering its environment to waste, traffic and power management.
Meanwhile, locations in Mindanao and new outsourcing destinations have to figure out their vision, what their goals are.
Cebu has already identified Bangalore, India as its benchmark in developing its information and communication technology sector as early as two to three years ago. How about the rest?
Despite these problems, there’s much to be happy about in the development of outsourcing in the Philippines. These problems are now part of the growing pains of the industry and they all present opportunities.
For Bisaya stories from Cebu. Click here. (May 18, 2006 issue)
Write letter to the editor.Click here.
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