Cebu bound to attract KPO investments, jobs

By Ehda M. Dagooc (The Freeman) Updated November 02, 2009 12:00 AM

CEBU, Philippines - After Cebu successfully etched its name as one of the world’s preferred investment sites for Business Process Outsourcing (BPO), especially for voice services, the province is now expected to attract another segment in the outsourcing industry, the Knowledge Process Outsourcing (KPO).

Business Process Association of the Philippines (BPAP) former chairman Bong Borja said Cebu could leverage on attracting this high-level outsourcing service especially that Cebu is now working at making the MBA hub in Southern Philippines.

Borja, currently the chief executive officer of call center giant Aegis People Support, said that although the BPO voice service still has a huge room for growth in the next few years, the huge KPO market is expected to greatly augment the employment generation as well as the investment revenue of the province.

KPO is an emerging segment in the outsourcing sector that the Philippines has yet to penetrate. This market is currently dominated by India.

This middle and higher level outsourcing service will need professionals such as financial analysts, people who have degree and masters in human resource management, accountants, among others.

KPO is a form of outsourcing, in which knowledge-related and information-related work is carried out by workers in a different company or by a subsidiary of the same organization, which may be in the same country or in an offshore location to save cost.

Unlike the outsourcing of manufacturing, this typically involves high-value work carried out by highly skilled staff.

KPO firms, in addition to providing expertise in the processes themselves, often make many low level business decisions—typically those that are easily undone if they conflict with higher-level business plans.

The profile of people being hired to serve within KPO service companies are more diverse than just being drawn from technical IT services – these are people with MBAs, and medical, engineering, design or other specialist business skills.

KPO delivers higher value to organizations that offshore their domain-based processes, thereby enhancing the traditional cost– quality paradigm of BPO.

The central theme of KPO is to create value for the client by providing business expertise rather than process expertise. So KPO involves a shift from standardized processes to advanced analytical thinking, technical skills and decisive judgment based on experience.

“These are the very expensive or high-paying type of outsourcing. I believe we have the talents and raw ingredients to attract the KPO market,” Borja said.

Although some existing outsourcing companies in the Philippines already cater to KPO jobs, Borja said “we have only done a small number of KPO works,” and it still has to be improved.

In an earlier interview with British Ambassador to the Philippines Peter Beckingham, he encouraged industry players to work on positioning the Philippines as the preferred KPO destination in the world, most especially for companies in the United Kingdom.

Beckingham said knowledge outsourcing is one of the BPO sectors that will make the Philippines as the preferred offshore site for British companies; this aside from the traditional call center operations that are also growing.

He said it is much cheaper to do research works in the Philippines, rather than doing it in London.

“India obviously still has far more investment,” Beckingham said but the influx of British BPO firms is expected in the Philippines, as the country has gained popularity among companies in the UK.

He mentioned that some BPO or KPO companies realized that Philippines offers more competitive workforce equipped with infrastructure that is at par with that of Bangalore (India).

Cebu could learn from Hawaii's tourism blueprint

(The Freeman) Updated November 24, 2009 12:00 AM

CEBU, Philippines - In order to sustain and further improve its tourism advantage, Cebu should get support and learn from Hawaii in terms of effective tourism blueprint.

Cebu Investments and Promotions Center (CIPC) managing director Joel Mari S. Yu said that Cebu should take advantage of the Hawaii government’s interest, especially from Honolulu Mayor Mufi Hannemann, to forge a stronger relationship between Cebu and Honolulu.

“We should learn how they were able to promote Hawaii [in terms of tourism]. We have the same attraction, unlike Paris, France and other well known destinations,” Yu said.

In 1994, the Cebu government forged a partnership with the Honolulu government, and one of the primary concerns was to learn from Hawaii, on how to formulate an effective tourism promotion blueprint.

However, Yu said the planned partnership was not successful because of the political transitions. Now, Yu hopes that the tourism private sector will lead in getting technical support from Hawaii.

“You see, Hawaii and the Philippines have the same attraction — sea, climate and the sun. We should learn from them,” Yu said.

In his recent visit to Cebu, Hannemann urged Cebuanos and the prime movers of the tourism industry here --- both government and private sector --- to re-enforce the partnership between Cebu and Honolulu which was started by Cebu City Mayor Tomas Osmeña over a decade ago.

“We can develop strong partnership together. Don’t just learn from our successes, but ask us why? We can help,” Hanneman told Cebuanos during his visit in Cebu as part of the 21st Trade Mission to the Philippines organized by the Filipino Chamber of Commerce of Hawaii and the Honolulu local government.

Today, the tourism industry in Honolulu is a US$2.5 billion industry, providing over 500 thousand jobs.

Despite its success in the tourism trade, Hanneman said his government is continuously pursuing projects that will further develop the tourism industry in Hawaii, investing further in infrastructure and sustainability projects.

“There a lot of opportunities for us to learn from each other,” Hanneman said.

While Cebu and Honolulu had already forged sister-city agreement years back, Hanneman said it is also high time for the business sector in both cities to forge strong linkages.

Recently, the Cebu Chamber of Commerce and Industry (CCCI) and the Filipino Chamber of Commerce of Hawaii signed a memorandum of agreement (MOA) for stronger linkage.

CCCI chairman for Trade Missions Nelson Bascones hopes that CCCI will be able to immediately connect with the Filipinos based in Hawaii and the Honolulu local government in order for Cebu to learn from them most especially in the area of tourism promotion. — Ehda M. Dagooc

Cebu to overtake India in attracting high-value non-voice BPO investments

(The Freeman) Updated November 25, 2009 12:00 AM

CEBU, Philippines - The Philippines is seen to overtake India in capturing the non-voice outsourcing investments in the next few years, as long more active promotions will be started highlighting the capability of the country to accept high-value BPO jobs.

Cebu, in particular, is moving towards attracting the non-voice BPO investors which will provide high-salary opportunity for professionals in different fields of expertise.

Cebu Investments and Promotions Center (CIPC) managing director Joel Mari S. Yu said that while Cebu has already made its name as the preferred location for voice-related BPO investments, it has to focus its promotions on inviting the high-value BPO investments in the Knowledge Process Outsourcing (KPO).

“We have to prove that we are more competitive than India in terms of quality and quantity. Right now, the Philippines is best for voice BPO, but there is bigger market in the non-voice segment,” Yu said.

KPO is the emerging segment in the outsourcing sector that Philippines has to yet to penetrate. Currently, this market is dominated by India.

This middle and higher level outsourcing service will need professionals such as financial analysts, people who have degree and masters in human resource management, and accountants, among others.

Cebu, on the other hand, has slowly attracted the software development investments, as it has proven to the existing software development companies, that talents here are far more competitive than that of India.

In a separate interview with Willem-Geert Lagemaat, chief executive officer of Lighthouse Holdings B.V., a new software development company recently opened in Cebu, he said that the firm found out that it is much easier to work with Filipino software developers than Indian.

Lagemaat said it is more difficult to deal with Indian software developers compared to Filipinos. “Culturally, it is easier to connect with Filipinos. The Philippines has long relationship with Europe and America. It did affect how people act and react.”

The Dutch outsourcing firm recently opened its software development and data processing facility in Cebu, its second facility in Asia.

According to Lagemaat, Cebu has huge potential to attract more outsourcing firms such as software development because of its impressive and easy to deal with pool of talents.

Compared to Indians, Filipinos can communicate well with foreign bosses, also Filipinos can easily adjust with the culture-difference working with foreign clients.

Lagemaat mentioned the “90 percent problem” often experience by outsourcing companies based in India. He said Indian developers can complete job assignment 90 percent on time, but can’t usually solve the remaining 10 percent of the job.

Inability to communicate well with their foreigner bosses is one of the problems faced by outsourcing firms based in India, Lagemaat added.

For his part, Commission of Information and Communication Technology (CICT) secretary Ray Anthony Roxas-Chua said that the industry is now focusing on diversifying into the higher value-added non-voice services, such as software development, which will provide higher paying jobs to Filipinos. — Ehda M. Dagooc

Waterfront seeks P2 billion for loan restructuring

By Zinnia B. Dela Peña (The Philippine Star) Updated November 25, 2009 12:00 AM

MANILA, Philippines - Gatchalian-led hotel operator Waterfront Philippines Inc. plans to borrow up to P2 billion for the restructuring of its loan with the Philippine National Bank and the renovation of its hotels.

In a disclosure to the Philippine Stock Exchange, Waterfront said its shareholders approved a board resolution authorizing the company to apply for loans of up to P2 billion.

Waterfront earlier remitted P826 million to the Philippine National Bank as complete payment of its outstanding obligation provided under their court-supervised compromise agreement. This brought the total amount paid by Waterfront to PNB to approximately P2.9 billion over the last eight years from the original loan amount of P780 million in 1997.

The original loan doubled its peso amount upon conversion as a result of the devaluation of the peso

The compromise deal forged in Nov. 21 prevented the foreclosure of the 562-room Waterfront Cebu City Hotel & Casino, the biggest in Cebu City and Waterfront’s flagship property, and the 167-room Waterfront Airport Hotel & Casino Mactan.

Part of the loan will be used to upgrade the company’s hotels in Cebu City, Mactan City, Davao City and Manila.

Shareholders also approved a plan authorizing Waterfront to convert up to P600 million of its advances to Waterfront Cebu City Casino Hotel Inc. into common shares of Waterfront Cebu City Casino Hotel Inc. at par value.

The settlement of the outstanding loan will allow Waterfront to focus on improving its hotel facilities and building inroads into new and emerging tourist markets.

Hong Kong Adopts Guidelines on Property Marketing

By JONATHAN CHENG

HONG KONG – Notoriously aggressive marketing tactics for Hong Kong residential property that helped turn the 46th floor of a landmark development into the 88th floor will soon be toned down.

Under new government guidelines, real-estate developers here will have to clearly state the floor number and square footage of condominium units in their sales materials.

"The government is deeply concerned about some recent sales tactics in the first-hand uncompleted residential property market and confusing market information," a government spokesman said Friday. "The new measures will further enhance the transparency of transactions ... and the clarity of property information."

Associated Press

New guidelines in Hong Kong require developers to clearly state the floor number and square footage of condominium units, after one builder represented the 46th floor of a landmark development, shown above, as the 88th floor.

Last month, blue-chip developer Henderson Land Development Co. said it sold a unit in its luxury condominium, 39 Conduit Road, for about US$56.6 million. The unit, which was marketed as sitting on the 68th floor of the building, was actually on the 44th floor.

The building's floor numbering plan skipped scores of numbers deemed to be inauspicious (those containing the number four, for example, which sounds like a Chinese word for death) and highlighted the ones considered lucky (such as ones containing eight, which sounds like a word for prosperity). The top floor of the 46-story building is called the 88th floor.

Now, the government says developers will have to "set out the floor numbering information clearly" in the front of their sales brochure.

The government also focused on how big developers say an apartment is. Typically, Hong Kong's developers include each unit's share of the public hallways, air conditioning units and the gym and spa in quoting its gross floor area to homebuyers. Developers don't always report the so-called "saleable," or usable, square footage of the apartment -- which includes only the unit itself, plus any extra balcony or utility areas.

Under the government's new measures, which it announced Friday in conjunction with the Real Estate Developers Association of Hong Kong, developers will have to show the per-square-foot price of individual flats, using saleable area.

At 6,158 square feet, the apartment at 39 Conduit Road sold for US$9,200 per square foot. After stripping out the extras, the condo is only 4,671 square feet, which works out to over US$12,000 per square foot.

A Henderson spokeswoman said that the developer would comply with any guidelines issued by the Real Estate Developers Association. Previously, Henderson Chairman Lee Shau Kee said the numbering of 39 Conduit Road was a response to market demand.

Under the government's new arrangements, developers will also have to disclose information about primary market transactions more quickly, within five days instead of the current period of one month.