Outsourcing firms favor Cebu for work force, infra

CEBU continues to attract the most number of knowledge process outsourcing (KPO) firms in the country outside Metro Manila, due to its infrastructure and residential projects and the supply of university graduates the area produces, a property consultancy firm said.

Based on Colliers International’s preliminary study of the Cebu market, the firm said that KPO companies have chosen to set up shop in Metro Cebu due to the area’s adequate infrastructure, internet connections, the supply of skilled college graduates, as well as a high level of urbanization boosted by the development of townships and infrastructure projects.

“Colliers believes that Cebu is still the most practical choice for KPO firms looking for viable locations outside of the country’s capital due to its diverse and skilled labor pool,” the firm said in a statement released on Tuesday.

Major outsourcing companies such as Accenture Philippines are now present in the area as part of their expansion strategy. With four facilities in the area, Accenture Philippines currently employs over 5,000 people and expects to hire a thousand more in 2017 to handle programming accounts.

Hanoi- based FPT Software opened in the city in 2015 to establish a presence in the country, initially hiring 62 software engineers with plans to have an employment base of 2,000 people by 2020. Meanwhile, health and information firm Medcor has also started hiring nurses to expand its clinical software development capabilities.

Other KPOs that started operations in Cebu within the last 18 months include Synchrony, Cardo Engineering, Google, and Catapult International.

The growth of KPOs in Cebu has prompted developers to boost their projects in the area. Colliers noted that some 300,000 square meters of office space are expected to be available from 2017 to 2019 from projects such as Philam Life Center, Central Bloc BPO Towers 1 and 2, GT Time Square, and Cebu Exchange.

Sustaining the expansion of KPO firms in Cebu will depend on the quality of graduates the city produces. Of around 30,000 Cebu graduates in 2017, 25% are expected to have business degrees while a combined 35% come from engineering, IT, math, and medical courses.

“We see Cebu’s shift to highervalue outsourcing being sustained by an ample supply of graduates with relevant college degrees… Meanwhile, the local government should grant additional incentives to KPO companies that will provide free training to college students and graduates,” the firm said.

Next to Metro Manila and Cebu, Colliers sees Clark, Cavite, Laguna, Iloilo, and Bacolod as areas with the potential to become the next KPO hubs, Colliers Research Manager Joey Roi H. Bondoc said in an e-mail.

“(Bacolod) is a key hub for health information management (HIM) while Iloilo is being groomed as a feasible location for game development services,” Mr. Bondoc said.

Mr. Bondoc said that Cavite and Laguna have been catching up based on outsourcing investments due to the large number of graduates they produce each year. With 26,000 graduates annually, one third are accounting or business degree holders while 40% are graduates of engineering, math, medical, and allied fields.

“The expansion of the skilled labor pool in Cavite and Laguna will be supported by a 3% annual population growth, higher than the national average of 1.7%. This should support the eventual shift to KPO,” he added.

Meanwhile, the presence of some established large universities in the Angeles-Clark- San Fernando corridor in Pampanga makes the area another viable source of outsourcing talent, the company said. With over 10,000 graduates every year, one-third hold business degrees while around half graduated in the engineering, IT, math, and medical fields. —