Batangas: The next Metro Manila

(Part 2)

BATANGAS province has been attractive to a diversified group of investors. The manufacturing segment was bolstered by the approval in 2018 of the 162.6-billion Liquefied National Gas (LNG) terminal project of FGEN LNG Corporation in Batangas City with a capacity of 5 million tons per year. German firm Knauf Gips Kg, the world’s leading manufacturer of gypsum-based plasterboard, is setting up a $50-million plant in Batangas province, marking the start of local production for both domestic and overseas markets. The investment is expected to initially generate 100 direct jobs. The project broke ground in 2018 for the manufacturing plant within the industrial park of the Udenna Group in Calaca, Batangas.

Japanese firm Citizen Finedevice Philippines Corporation is investing 11.73 billion ($36.83 million) for the production of electronics products in the First Philippine Industrial Park II in Sto. Tomas, Batangas. The company will produce crystal blank devices and component part soft products such as watches, mobile phones, IT products, home appliances, and automobiles. The PEZA-registered project is expected to employ 530 workers. Once operational, it is expected to produce $12.3 million annual worth of exports. In the area of transportation and logistics, Southwest Gallant Ferries, Inc., is going to operate a 1750-million 2,944-GT passenger ship to service the Batangas-Caticlan routes.

In the tourism and real estate sector, Torre Lorenzo Development Corporation (TLDC) is partnering with the Philippine operator of the Dusit Thani hotel brand to develop a 13-billion Dusit Princess Lipa Hotel in Batangas. The project will be the first international brand hotel in the city of Lipa. Set for completion in 2021, the hotel will have 152 rooms, as well as an all-day dining restaurant, a fully equipped gym, swimming pool, and function rooms. It will be located within a complex that will also host two residential condominiums.

Batangas is also rich in educated manpower. The province hosts numerous colleges and universities and is known as the Center of Learning in Calabarzon. In 2017, the University of Batangas saw an opportunity to expand and acquire the 1.4-hectare vacant parcel of land in front of its Hilltop campus in Batangas City. In December of the same year, it broke ground to usher in the construction of its Millennium campus. The University of Asia and the Pacific, now based in Ortigas Center in Pasig City, has announced plans to set up a 40-hectare campus in the town of Sto. Tomas, which is becoming a city before 2019 ends. One of the country’s most prestigious private universities, De La Salle University, has a campus in Lipa, Batangas. For over 50 years, it has been the source of highly qualified professional people in law, management, engineering, tourism, and other specializations.

Batangas is becoming a favorite of the BPO-IT sector that earns more than $25 billion yearly, employing some 1.2 million highly educated workers. Property developers have noted that the demand for office spaces will reach 1.95 million square meters in the next few years should the number of full-time employment outside the National Capital Region double to 780,000. As Metro Manila becomes increasingly saturated and as the industry expansion outpaces the supply of office spaces, the potential of Metro Batangas is obvious. The criteria for an ideal location for BPO-IT enterprises include a healthy labor pool,

local government support, fiber-optic connectivity and accessibility. Batangas province has been identified to meet these requirements as it is known to have a highly educated manpower base and local government commitment to support small and middle-sized BPO operators. The increased demand for office space in Lipa City is driving real estate prices to levels approximating those of some districts of Metro Manila. According to Cuervo Appraisers, in the Poblacion of Lipa (P. Torres St.), land prices are reaching 145,000 per sq.m. Estimates in other cities like Batangas City and Sto. Tomas City yield prices of anywhere from 18,000 to 113,600 per square meter in the business districts.

Lipa City has been included among the Next Wave Cities (NWC) for many years. The NWC are assessed on the basis of a scorecard that carries four criteria – talent availability (40 percent), infrastructure (30 percent), business environment (20 percent), and cost (10 percent). Talent availability was assessed using a city’s number of graduates that are within the 25-kilometer radius from the city concerned. Already US-based BPO firm Alorica hosts its largest site in the Philippines in Lipa, currently employing some 2,500 agents. Other BPO firms operating in Lipa are TeleTech Customer Care Management Philippines, Inc., Tele-Accent Call Center Solutions, Inc., Bubu IT Solutions, Inc., Lasting Line Contact Center, Inc., Primary Care Management, Inc., Clear to Close Services, Inc., SPT Business Resources, Inc., Maestro Systems Technologies, and The Results Companies. Especially in the subsection of Knowledge Process Outsourcing, which is less threatened by Artificial Intelligence and robotization than the voice-oriented call centers, Batangas is benefitting from its high competitiveness index among Philippine cities and municipalities. It ranks 9th out of 75 provinces in the 2018 Cities and Municipalities Competitiveness Index, primarily an assessment of an area’s economic dynamism, government efficiency, infrastructure, and resiliency. In the category of resiliency — which refers to localities’ capacity to facilitate job generation, productivity gains, and increase incomes — Tanauan City in Batangas ranked 19th overall.

Batangas’ population will be increasing to 3 million in the next five years as households in the province lead the country in graduating from low middle-income status to high middleincome. Like the National Capital Region, its poverty incidence will fall below 10 percent. In addition to the abundant opportunities for high-paying jobs in manufacturing and services, Batangas province is fortunate for belonging to the Calabarzon region which is touted to have the highest number of Overseas Filipino Workers (OFWs) with close to 30% of the country’s total OFWs of more than 10 million who continue to remit their earnings at an average annual increase of 3 to 5 percent, literally “come hell or high water.” Even in the worst of times during the Great Recession of 2008 to 2012, the OFW remittances never failed to increase by 3 to 5 percent annually, surpassing the $30-billion mark by 2017. To illustrate the importance of OFW remittances to the economy of Batangas province, the municipality of Mabini (named after a national hero) used to be a third-class municipality at the turn of the millennium. By 2009, it became a first-class municipality as a quarter of its 1,200 residents migrated to Italy to find work. Today, Mabini is often dubbed “Little Italy” and lives up to that label by having many of its houses built in the image of an Italian villa.