Laguna, Cavite top next wave of locations for BPOs

By Jesus F. Llanto,, Newsbreak

Posted at Nov 03 2008 03:20 PM | Updated as of Nov 04 2008 12:22 AM

Clusters of cities and municipalities in Laguna and Cavite topped the list of the 10 next wave of locations for outsourcing in the Philippines, a scorecard of the BPO industry showed.

Metro Laguna—composed of Santa Rosa City, Calamba City, Los Banos, Cabuyao and San Pablo City—was cited as the best outsourcing location in the Philippines outside Metro Manila and Metro Cebu by the scorecard ranking of the Commission on Information and Communication Technology (CICT), Business Process Association of the Philippines (BPAP) and the Department of Trade and Industry. Metro Laguna got a score of 88 percent out of 100.

Metro Cavite—composed of Dasmarinas, Bacoor, Imus and Cavite City—was ranked as the second best outsourcing location with a score of 85 percent.

The scorecard also included two cities in the Visayas, two cities in Mindanao,  a city in Batangas, the  Angeles-Clark- Mabalacat cluster in Central Luzon and two clusters of local government units in Bulacan.

The scores of the other top ten next-wave cities are as follows: Iloilo (81%), Davao (80%), Bacolod (78%), Angeles-Clark-Mabalacat (77%), Baliuag-Marilao-Meycauyan (74%), Cagayan de Oro (73%), Malolos-Calumpit (73%) and Lipa City (73%).

The BPAP-CICT-DTI scorecard computed the scores using the following criteria: availability of talent (50%), infrastructure (30%), cost (5%) and business environment (15%).

Best performers

Secretary Ray Anthony Roxas-Chua III of the CICT said the availability of huge potential talent pool in Laguna was behind its high ranking. “Metro Laguna taken together ranked the highest for availability of graduates and workers out of the more than 30 locations assessed.”

Oscar Sanez, chief executive officer of the BPAP, meanwhile, said that Angeles-Clark-Mabalacat was included in the list because of the presence of economic zones that spur development. Angeles-Clark-Mabalacat also got a perfect score of 100 for the infrastructure category, which took into account the quality of roads, access to international and domestic flights, hotels, and presence of providers of fiber optic networks.

Bacolod City, meanwhile, topped the business environment category. Sanez said the presence of PEZA sites and ICT council in the city boosted its score in this category.

The business environment criterion, said Sanez, also took into account incentives from the local government units, peace and order situation, vulnerability to natural disturbances, travel advisories and crime rates.

The cities of Iloilo and Cagayan de Oro, meanwhile, topped the cost criterion, which took into account the cost of labor and office space.

Beyond Manila and Cebu

Sanez said that cost is not a big factor in the ranking because investors have realized the cost advantage of locating outside outsourcing hubs like Manila and Cebu.

“Moving outside Manila and Cebu can create more economic opportunities outside these cities,” Sanez said adding that they have learned from the experience of India, where overcongested locations have driven up wage and rental rates.

Industry data show that 80 percent of the Philippine outsourcing industry operations is concentrated in Metro Manila.

Celeste Ilagan, executive director of the investments promotions group of the Board of Investments said that industry concentration has put “tremendous pressure” on Manila and Cebu when it comes to manpower supply.

“We have to show the investors that there are other places where they can go," Ilagan said. “ Otherwise pressures to raise rental rates and salaries in these major metropolitan areas would go unabated.”

Chua said that having BPO locators outside Manila and Cebu can also boost the economy of the provinces and cities. “It can spur the local economy because of the high disposable income of the workers.”