‘BPO still Cebu’s growth driver’

• By Katlene O. Cacho

Thursday, December 29, 2011

THE business process outsourcing (BPO) industry will continue to propel Cebu’s economy as the province’s major economic driver, industry leaders said. The BPO sector is also poised to grow even bigger in the coming years, they said.

“In 2011, BPO companies accounted for 40 percent of positions posted in a jobs listing website. The expansion of BPO operations led to the rise in the demand for office spaces. This year, the region saw property developers putting additional investments in the leasing business,” said Cebu Property Ventures Development Corp. (CPVDC) president Francis Monera.

The industry recorded a 20 percent annual growth rate.

CPVDC is the developer of Cebu IT Park. It currently has eight building under construction.

Workforce

Monera said BPO companies are continually drawn to Cebu City with its workforce and healthy fiscal environment. He said Cebu is supported by nine large universities that turn out many workers for IT and BPO companies.

“The BPO industry in Cebu is fast-growing because IT/BPO companies in the US have found a viable destination in Asia where they can relocate after the 2008 global economic crash. The industry will continue to offer a lot of opportunities and will become Cebu’s main driver of economic growth,” said Cebu Chamber of Commerce and Industry (CCCI) chairman for information and communications technology (ICT) Jerry Rapes.

This year, global outsourcing firm Aegis People Support unveiled its own Aegis Tower Cebu at the Cebu IT Park. The company said their decision to build in Cebu is a sign of their “commitment to and confidence in the country’s booming BPO industry and Cebu’s workforce.”

Monera said they are anticipating an increase of 20 percent in the current 50,000 workforce with the completion of buildings within Cebu Park District.

CPVDC is looking at an estimated 11,000 additional seats with eBlock 2, Skyrise 4 and the Aegis Tower Cebu.

Stream Global, a major outsourcing company, was reported to be hiring between 60 and 70 employees weekly. Convergys, on the other hand, is also expanding with its new office in Cebu, according to Monera.

Some of the firms that expanded in Cebu this year include HP, Fluor Daniels, Dell, Convergys and JP Morgan & Chase.

Non-voice services

“Wide-spread employment is a by-product of these developments with a 35 percent increase in working population for both parks – majority in the BPO industry. (It strengthens) our bid of making Cebu the BPO capital in the Philippines next to Metro Manila,” Monera said.

Rapes, meanwhile, said Cebu is not only well-positioned for voice services but also for knowledge process outsourcing (KPO), information technology outsourcing and non-voice services.

He said it is just a matter of preparing Cebu “to get to a higher level,” particularly in terms of supplying the industry with skilled, competent and highly qualified workforce.

“There is not always enough people,” said Rapes, the president of information technology outsourcing (ITO) company Exist Global.

He said companies now move out from major call center hubs like Metro Manila and open offices in “next wave cities.”

Monera, who sits as the chairman of the board for Cebu Educational Development Foundation for Information Technology (Cedf-it) said the private sector, academe and local government have collaborated to improve the skills of potential workers for increased manpower pool via proficiency/certification, retraining and jobs-skills matching programs. The stakeholders are also intensifying programs that support infrastructure and tourism service to strengthen the investment climate in Cebu.

Scalability

Monera emphasized the need for talent scalability, not only in terms of available quantity of the workforce but also in training to match the skills required by companies.

Cedf-it announced last October it will get part of the P500-million stimulus fund committed by the Aquino government to facilitate “near-hire” training programs of IT-BPO companies. It said about P5 million worth of scholarships from the Technical Education and Skills Development Authority (Tesda) will be used to conduct “near-hire” trainings for 1,000 prospective IT-BPO employees here.

Monera also cited Cebu’s “big opportunity” in higher level services or KPO. He said although, manpower requirement for this category may not be as high as voice-related jobs, these are high-value services that mean higher average compensation for the Filipino talent.

While there is continued growth ahead in the BPO industry, Rapes said “being complacent” may threaten BPOs’ rosy outlook for 2012.

“We need to create more people for the industry rather than compete with each other. We need to produce more skilled workforce for a bigger ecosystem,” he said.
Rapes also announced that the outsourcing industry will soon start the second phase of the Cebu IT/BPO roadmap so it could further maximize the potential of IT/BPO services.

What to do

He said the study will “drill down what Cebu needs to get to higher level.”

“We have to know where we are going and what to do next now that we know we have the capabilities to do more KPO,” Rapes said.

He said that while waiting for the second phase of the study, entrepreneurs should start looking at opportunities in offering KPO services.

He said India has higher revenues than the Philippines because they do difficult services. “But if the Philippines will capitalize on its KPO potential and do its homework, the IT/BPO revenues will grow eventually,” Rapes said.

The Business Process Association of the Philippines targets to grow the industry by $25 billion in revenues in 2016 and increase IT/BPO employment to more than one million.

A bill seeking to create a Department of ICT was also filed as a support to the growing industry.

Published in the Sun.Star Cebu newspaper on December 30, 2011.

Remittances, BPOs fuel real estate

• By Katlene O. Cacho

Wednesday, December 28, 2011

REAL estate in Cebu is booming and the industry is optimistic growth will continue next year, with the continued strong inflow of overseas remittances, low interest environment and growth in tourism and business process outsourcing (BPO).

“Growth in Cebu’s real estate industry continued as is evident in the number of construction projects in the city,” said Cebu Holdings Inc. president Francis Monera.

He pointed out accelerated development within the Ayala-owned Cebu Park District (Cebu Business Park and Cebu IT Park).

Monera said construction in Cebu has become more dynamic and diversified.

“This reflects the increasing number of condominium units, which is expected to grow by 74 percent to over 5,000 units to complete in 2011, together with an expanding office space that may reach some 460,000 square meters of usable area or 15 percent more than in 2010 in Cebu,” Monera said.

Growth drivers

Philippine Association of Realtors Board Inc. – Cebu Realtors Board Inc. (Pareb-Cereb) president Antonina Fritzche credited the growth of the industry to BPOs, foreign students like Koreans learning English here, foreign retirees, Cebu’s warmer climate, surge of overseas remittances and increased purchasing power.

OFW remittances went up by seven percent to $16.534 billion in the first 10 months of the year from $15.456 billion in the same period last year, according to the Bangko Sentral ng Pilipinas.

Attractive financing schemes also boosted the housing sector.

According to Rizal Commercial Banking Corp. first senior vice president and RBG deputy group head for VisMin sales Prudencio Gesta, lending activities this year increased because of the low interest environment. Car and home loans are also on the rise.

The Pag-ibig Cebu branch, meanwhile, reported releasing P688 million as of November this year to finance the home loan applications of 776 borrowers. Pag-ibig estimated 70 percent of these home loans are for house and lot; 15 percent for lot only, and five percent for condominiums.

“Generally, 2011 is a bullish year for property developments,” Fritzche said.

Innoland Development Corp., meanwhile, topped off its flagship mixed-used project Calyx Centre in the Cebu IT Park. The company also announced it will build Calyx Residences, a residential condominium project at Cebu Business Park and The Link, an office-space building also at Cebu IT Park.

Taft Property Venture Development Corp., meanwhile, broke ground last November for its first condominium project, Horizons 101, which will have a total of 1,468 units.

Taft Property chief operating officer Manuel Colayco said Cebu has an unserved requirement of 167,000 units for the middle income category for house units with prices ranging from P1.25 million to P3 million.

Maria Luisa Properties, on the other hand, recently announced its latest premier development, The Heritage, in Mandaue City.

Big players like Ayala Land Inc. and AboitizLand Inc. also unveiled their latest projects in Cebu like Alveo Land’s Solinea and AboitizLand’s Hanaya.

Monera said tourism is a key factor in the continued growth of Cebu’s real estate industry.

“In the past few years, the entry of foreign tourists, businessmen, returnees and local travelers amplified the range of hotel accommodation in the city, which now varies from boutique and businessmen’s hotels, leisure-oriented resorts, five-star luxury hotels and casinos to travelers’ inns,” he said.

Hotel rooms

Monera said Cebu has more than 30 established hotels or some 6,000 rooms that vary from economy to first class.

Developer Megaworld Corp. recently unveiled 8 Newtown Blvd., a condominium development in its 16-hectare The Mactan Newtown project in Cebu. The project is targeted at the retirees market.

“Similar to Hawaiian islands such as Honolulu and Maui, Cebu boasts both natural wonders and urban conveniences, which are appealing to retirees,” said Philippine Retirement Authority (PRA) general manager Veredigno Atienza.

Megaworld inked a partnership with the PRA to facilitate Special Resident Retiree’s Visa (SSRV) applications of qualified foreign clients through their investment with 8 Newtown Blvd.

The firm said construction is also under way for One World Center, a five-level office building designed to serve the needs of top firms in the BPO and IT industries at The Mactan Newtown.

Monera, meanwhile, said plans are underway to start construction of a BPO building within Cebu Business Park as well as the third sequel to the eBloc Tower within Cebu IT Park.

He said that with the success of 1016 Residences, Ayala Land Premier is also set to launch another residential condominium within Cebu Business Park. Avida, on the other hand, also plans to launch a third tower by next year.

Fritzche also said more developers will offer a resort feel and low-rise condominium developments. She said more projects will gear toward the “work-live-play” concept for the young professionals market.

Challenges

When asked about potential challenges in 2012, Fritzche mentioned the lack of support infrastructure and worsening traffic problem as some of the factors that might hamper growth.

“The challenge would be not in selling the development, but in convincing those investors to invest with us when we cannot sustain more buildings,” she said.

Meanwhile, the Philippine Allied Chamber of Real Estate Brokers and Licensed Salesman (PhilAcre) is also asking the government to come up with an effective promotional program to help them sell the Philippines as a vacation destination, especially that global property buyers are now slowly shifting their interest to Asia.

PhilAcre president Anthony Leuterio said international investors, largely Americans and Europeans, are now turning their attention to properties in Asia. He said bulk buying of condominium units is becoming a trend for global investors.

“If the Philippine Government will remain less supportive in promoting the Philippines as a long-term vacation destination like Hawaii, investors’ interest may be snatched by other Asian countries, which actively promote property investments,” Leuterio said.

Published in the Sun.Star Cebu newspaper on December 29, 2011.

Lucio Tan firm bullish on mid-income housing prospects for 2012

(The Philippine Star) Updated December 30, 2011 12:00 AM

MANILA, Philippines - Belton Communities, Inc. (BCI), a fully owned subsidiary of Lucio Tan’s property arm Eton Properties Philippines, Inc. (EPPI), said it is confident that the good sales prospects for middle-income developments will continue in 2012.

Said EPPI president Danilo Ignacio, “The outgoing year has seen brisk take up of our middle income projects. We see this continuing next year given the now established preference of the market for residential projects like BCI’s as these are not only accessible to their workplace, but also have excellent features and amenities.”

BCI was established by Eton Properties to particularly cater to the mid-market segment by coming up with projects that will meet the financial capacities of middle-income families, where most OFW families belong, as well as families with monthly income of at least P50,000.

Mid-income markets now account for about a third of residential buildings in Metro Manila. Said Ignacio, mid-income earners are definitely the ones that fuel the industry’s growth in recent years, with developers like BCI tailor fitting their projects to suit the needs of this segment.

BCI’s projects, for example, are accessible or a short travel away from work and other frequented destinations like schools and malls. And aside from attractive features and amenities, the affordable pricing that comes with several flexible-financing options is the one that makes the market put their money on mid-market homes.

With its aggressive stance to capture this market segment, the steady growth in the number of residential projects of BCI mirrors the rise of mid-market condos in Metro Manila. From its first project, The Manors at North Belton Communities in 2008, BCI now has in its sleeves several other mid-market residential developments, also within North Belton Communities, namely, West Wing Villas and West Wing Residences. It also has its latest residential haven in Quezon City, West Wing Tropics. These projects range from house and lots, mid-rise condominiums and townhouses. To know more about BCI projects, please call 983 5932 or visit www.beltoncommunities.com.

North Belton Communities is BCI’s 13.8-hectare multi-enclave development along Quirino Highway in Quezon City. An SM mall will be built on the three-hectare lot inside North Belton Communities. Living beside a major mall promises to be one of the best conveniences North Belton Communities could ever offer its residents.

Existing and future homeowners of residential enclaves within North Belton Communities will likewise enjoy close proximity to other major QC malls. It is right across SM Hypermarket Novaliches and 10 minutes away from Eton Centris, SM City North and Trinoma. Schools and hospitals are also within easy reach. The rest of metro Manila and nearby provinces are accessible via Quirino and Mindanao Avenues and the new Mindanao-NLEX access.

Said Ignacio, “Through BCI, Eton Properties is proud to be a part of the industry’s move in the past few years to provide quality, strategically located and affordable homes to more and more hardworking Filipinos. We are committed to bring more dreams of home ownership come true.”

Widespread rains forecast over parts of Vis-Min

By Helen Flores (The Philippine Star) Updated January 02, 2012 12:00 AM

MANILA, Philippines - Widespread rains may trigger flashfloods and landslides in parts of the Visayas and Mindanao over the next three days, the state weather bureau said yesterday.

Robert Sawi, weather division chief of the Philippine Atmospheric, Geophysical and Astronomical Services Administration (PAGASA), said mostly cloudy skies with scattered rainshowers and thunderstorms would prevail over the Visayas and Mindanao, becoming cloudy with widespread rains over eastern and central Visayas and eastern and southern Mindanao which may trigger flashfloods and landslides.

Sawi also said a low-pressure area was spotted 410 kilometers east-southeast of General Santos City at 8 a.m. yesterday.

A wind convergence was affecting eastern Visayas, he added.

The low-pressure area was not expected to become a storm, according to PAGASA weather forecasters.

Nathaniel Servando, PAGASA administrator, said Luzon will also experience mostly cloudy skies with light rains due to the northeast monsoon.

One tropical storm is likely to affect the country in January, he added, although no tropical storm is expected in the first week of 2012.

However, rains will prevail over most parts of the country due to other weather systems, the agency added.

PAGASA officials had warned that La Niña rains will continue to affect most parts of the country until May this year.

La Niña refers to the abnormal cooling of the sea surface temperature in the Pacific and is characterized by excessive rainfall.

Relocation sites for families displaced by tropical storm “Sendong” will be prepared starting next week, the government said yesterday.

In a telephone interview, executive director Benito Ramos of the National Disaster Risk Reduction and Management Council (NDRRMC) said the relocation sites are near Barangay Sta. Elena in Iligan City and Barangay Calaanan in Cagayan de Oro City.

“These (preparations) will begin next week,” he said. “There will be ground preparations. The soil should be flattened first. This is something that they (affected residents) can probably call their own. They do not need to go back to the edge of the river.”

Ramos said among the areas being eyed as relocation site is a land near Sta. Elena owned by the National Steel Corp. The property may be acquired through an arrangement that would allow the company to settle its tax dues to the local government, he added.

Previous reports said the local government aims to build about 3,000 houses on the 10-hectare lot.

The other relocation site is the nine-hectare property in Barangay Calaanan owned by the Cagayan de Oro City government.

Ramos said the construction of the houses may take three to six months.

“The agencies are fast-tracking this,” he said. “If they go back to the areas where they used to live, they would be vulnerable to disasters.”

The Department of Social Welfare and Development (DSWD) would also provide financial assistance to the affected families to allow them to rebuild their lives.

Sen. Loren Legarda called on the government yesterday to prioritize the needs of some 14,000 children affected by Sendong who are still in evacuation centers.

Citing reports from the UN International Strategy for Disaster Reduction (UNISDR), Legarda said children who are in evacuation centers are most vulnerable, especially when separated from their parents.

“As children continue to face threats, particularly to their health and safety, even after Sendong had left the country, the government should prioritize the provision of their basic necessities,” she said.

Legarda urged the government to focus on providing food, potable water, basic vitamins, medicine, and clothing.

Stress debriefing activities are important to help children cope with the trauma that the devastation had caused them, she added.

Legarda said the DSWD’s Child Protection Working Group Program was organized to protect children from abuse, exploitation and trafficking in evacuation centers.

“While victims of Sendong are still reeling from the effects of the disaster, we have to create a sustainable environment that will shield the most vulnerable citizens of the nation,” she said.

“For what will the future hold for our children and the future generations if the disasters of today are continuously destroying the resources we have? Disasters threaten our basic human rights - food, potable water, shelter, decent livelihood and life itself.

“Disaster preparedness is our shield against the risks that natural hazards may bring to our sources of fundamental needs,” she said. - With Alexis Romero, Christina Mendez

Cebu expects more malls, boutiques to open in 2012

By Ehda M. Dagooc (The Freeman) Updated December 31, 2011 12:00 AM

CEBU, Philippines - Consumers will expect more sophisticated products, affordable yet good items, and wider array of choices across consumer product lines, as more shopping malls, boutiques, and branded names will be opened in Cebu in 2012.

The upbeat retail sector in Cebu in the last few years, will be further sustained in the “Year of the Dragon,” as purchasing power of Filipinos, specifically Cebuanos is on the rise, boosted by the active tourism, real estate, BPO sectors and other industry investments.

“Now more than ever, retailers are preparing their innovative programs in order to compete. This will benefit the consumers, as bringing down the prices to competitive levels is one of the priorities of retailers while competition is in its hottest,” said Philippine Retailers Association (PRA-Cebu) incoming chairperson Melanie C. Ng.

Interestingly, the strong usage of social networking among Filipinos is expected to beef up the growth figure of the retail industry in 2012, as this phenomenon pushes people to frequently buy new things, as well as update travel plans.

Retailer Jay Jonathan P. Aldeguer said that the advent of social networking has changed the movement of retail and travel businesses, while vacation plans now are not dictated by season, but depends on the availability of airlines’ low fares, prompted largely by also updating people’s networking pages through new photos, especially on Facebook.

Buying new gadgets, apparel, trying new restaurants, among others also pushed Filipinos, for the sake of showing off to friends within their network.

According to Aldeguer, this trend is based on a study recently conducted, indicating the strong impact of social networking to retail and travel in both domestic and international destinations.

“Because what you do is now being published in social networking sites, this encouraged people to keep on updating their gadgets, apparels, as well as travels,” said Aldeguer.

Aldeguer, whose company owns apparel retail and travel firm the Islands Group, said that impact of social network to these businesses have helped these industries achieve good performance, amid the unpredictable economic situation.

Also, Aldeguer mentioned that the advent of social networking such as Facebook, and the existence of Bloggers in the Internet, have made a significant impact on influencing consumers’ attitude.

People are so trusting—even on strangers. Bloggers whom people do not know of even can generate impact on consumers.

“Reactions now are so fast. Everybody knows instantly about what’s new, what’s not to try, or must try product and services,” he said adding that these among other factors that affect the choices of consumers have to be dealt with seriously by retail players.

“The world is changing. So with the retail game,” said Aldeguer, who company owns the chain of Island Souvenir Shops in the Philippines, and other tourism-related businesses.

Although, retail and travel have stayed dynamic in the fragile economic state, players are also encouraged to look at another dimension of challenges, where competition is tougher, and consumers’ attitude is too complicated.

The improving market confidence and the growing capacity of purchasing power of Cebuanos have fueled the promising outlook of retail sector in Cebu, Ng said.

Past PRA national chairman Bernie Lie said that 2012 is a different and more exciting year for the local retail sector, while players are now challenged to be at par with the international retailers in terms of providing quality product, superb customer service, while still enjoying good business.

“We are optimistic about 2012. The government has already announced to pump-prime the economy, the more that people will have capacity to buy,” said Liu who owns the Golden ABC Inc., the company that operates several power-brands in the apparel sector, like Penshoppe, For Me, Regatta, among others.

Unlike in the past, that consumers were only limited to what they can see on display in the physical stores, now competition already includes the existence of online market, said Aldeguer.

While purchasing power is strong, and consumers are active, retailers on the other should not be complacent, but urged to always keep their “hands and eyes” in the business all-the-time.

Malls will be sprouting within Metro Cebu area within the year, following the recent opening of the J Centre Mall in Mandaue City, SM chain is set to open its north-based shopping mall in Consolacion within the year.

Also, Ayala Center Cebu, will start its P2 billion mall expansion in the first quarter of 2012. The opening of the Ayala Center expansion which is set to complete before the end of 2013, will house signature brands like Louis Vuitton and other luxury names. (FREEMAN)