– City only has four PEZA-accredited areas
– ICT Summit 2009 set in Davao, August 6-7
by Lovely A. Carillo
REAL estate developers “must be more aggressive in order to help the local business process outsourcing (BPO) sector of Davao City become a major player in the country’s BPO industry.”
Thus spoke Lizabel “Wit” G. Holganza, president of the ICT Davao Inc. (IDI), who added that Davao City is among the 2008 Top 10 Philippine IT-BPO Destinations, having been ranked by the Commission on Information and Communications Technology (CICT) and the Business Processing Association of the Philippies (BPAP) as Number 4 out of the 37 Philippine cities during the first BPO summit last December.
“Despite this seemingly enviable position, in reality Davao City only has a one percent market share of the total industry,” Holganza said.
“While we have recently seen a 56 percent growth in the number of IT-BPO jobs in the city, we can still further realize our city’s full potentials in the areas of human resource and real estate development,” she said.
CICT closely monitors the development of the Philippine Cyber Corridor which is fifth out of the five economic super regions created by Executive Order No. 561 signed by President Gloria Macapagal Arroyo on August 19, 2006, to include the Northern Luzon Agribusiness Quadrangle, Luzon Urban Beltway, Central Philippines and Agribusiness Mindanao.
“But we don’t want to be just in the top 10; we want to be in the same place as Manila and Cebu,” Holganza said.
She said a maturing real estate industry which provides the building and spaces for call and other BPO centers will help the city become more competitive, especially in realizing its goal of being at par with Manila, which is not only the center of the country’s BPO industry but is also one of the world’s top offshore destinations.
“Davao already has an edge over Manila and Cebu when it comes to the price of real estate, even if Manila has reduced costs to get more BPO companies to invest,” Holganza said. While Manila’s real estate rate is pegged at P800 per square meter Davao City provides a competitive edge with an average rate of P300 to P400 per square meter.
The city’s real estate players, however, seem to be playing a wait and see game and are hesitant about investing in real estate space until they get commitments from BPO companies that will locate in the city. Holganza said the city’s real estate sector should already prepare the infrastructure, because BPO firms prefer to invest in areas where they can relocate in one or two months.
Lack of PEZA
accredited zones
Aside from the seemingly wait and see attitude of the real estate players in the city, the lack of PEZA-accredited special economic zones in Davao City is also considered a setback for the city’s BPO sector.
Locators prefer to invest in PEZA zones because these special economic areas offer very competitive incentives, non-stop and one-stop shops and sans graft and corruption as well as bureaucratic red tape.
Information technology services that derive at least 70% of their total revenues from foreign clients are among the activities eligible for approval as a PEZA area. The Philippine Economic Zone Authority provides that among the IT-enabled services that can qualify for incentives are transcription services, business process outsourcing, data encoding, call centers, content development and software development, among others.
Holganza said Manila has a total of 68 PEZA-accredited sites and Cebu has 21. However, she said, Davao City has only four PEZA-accredited areas, including Damosa, Robinsons Cybergate, NCCC — and Sun City, which is not even active.
“Iloilo and Bacolod have more PEZA-accredited sites than Davao.” Holganza said. The city’s ICT sector is thus encouraging more technology parks and more ready spaces in the city to accommodate BPO companies that would like to invest here.
To boost its goal of being at par with Manila and Cebu’s BPO sectors, ICT Davao is hosting the ICT Summit 2009 on August 6 to 7. With the theme “Roadmap 2015L Empowering Davao through Information and Communications Technology”, the ICT sector aims to bring together both the private and public sectors to create a blueprint for the BPO industry.
Holganza said the Summit is targeting around 250 participants from the following sectors: IT entrepreneurs, potential investors, the academe, industry stakeholders, local and national government.
While Davao City’s BPO industry is still miles away by comparison to that of Manila and Cebu, the expectation is that it will actually get there, and soon. However, this cannot be done without the support of the government and the private sector, especially the real estate players.
