MANILA, January 22, 2006
 (STAR) Cebu Rep. Eduardo Gullas wants national economic development planners to further build up Cebu as a global business process outsourcing (BPO) hub, saying a lot more could be done to help promote the province’s qualities as an ideal location for information technology (IT)-enabled service industries.

"Cebu can take in more BPO providers. The province has all the attributes needed by BPO providers – a business-friendly local policy environment, extensive infrastructure, efficient connectivity and adequate human resources," Gullas said.

Gullas, a former provincial governor, also said that with highly competitive office rent and wages, doing business in Cebu is more cost-effective compared to Metro Manila.

"Cebu is the center of higher learning in Visayas and Mindanao. We produce thousands of English speaking, high work ethic, computer literate and Internet savvy college graduates each year," Gullas pointed out.

At present, Gullas lamented that over 80 percent of BPO providers operating in the country are based in Metro Manila.

Cebu now hosts 12 call centers, including those operated by US-based global BPO providers Convergys Corp., Sykes Enterprises Inc., eTelecare Global Solutions Inc. and PeopleSupport Inc.

Convergys’ Cebu call center is in Banawa, Cebu City, while Sykes’ is in Subangdaku, Mandaue City.

The Cebu call centers of eTelecare and PeopleSupport are both at the Ayala Corp.-owned, 24-hectare Asiatown IT Park in Lahug, Cebu City.

Apart from their four call centers in Cebu, the four global BPO providers combined also operate 14 call centers in Metro Manila.

Gullas, meanwhile, urged the Central Visayas Regional Development Council (RDC) and the Commission on Higher Education to draw up a plan to further hone Cebu’s competitive edge as an outsourcing hub.

"Going forward, we have to reinforce the skill sets of our college graduates, for them to readily qualify for more IT-enabled service jobs. For instance, we may have to identify and invigorate two or three local universities as potential centers for English mastery and engineering proficiency," Gullas said.

He also prodded the RDC to help identify more buildings in Cebu that may qualify for IT zone status.

The Philippine Economic Zone Authority recently lowered from 5,000 to 2,000 square meters the minimum floor size of a building outside Metro Manila and Metro Cebu that may seek IT zone status.

IT zone locators enjoy income tax holidays, tax-free capital equipment importation, exemption from local governments imposts, simplified customs procedure and permanent residency for foreign investors, among other perks.

High oil prices remain as main threat to inflation this year By Donnabelle L. Gatdula The Philippine Star 01/22/2006

The Bangko Sentral ng Pilipinas (BSP) said over the weekend that high oil prices will remain as the main threat to inflation this year.

BSP Governor Amando Tetangco Jr., however, assured that the monetary authorities will continue to monitor these risk factors.

"The main risk we see for domestic demand is high oil prices which have already taken some of the buoyancy out of consumer spending last year. Rising oil prices also continue to be the key source of risk to inflation, although the strong peso and easing food prices should help balance inflationary risks," Tetangco said.

The BSP is targeting the inflation rate to average between four to five percent in 2006. The inflation forecast for the year, however, is placed at 7.5 to 8.2 percent.

But Tetangco expressed confidence that the rate would be kept at manageable levels this year.

"While inflation may range from 7.5 to 8.2 percent, we see a downward trajectory given expectations of an easing of oil prices from peak levels in 2005 and a short-lived impact of the revised value-added tax (VAT) on prices of goods and services," he said

The BSP chief noted that market interest rates are also expected to benefit from ample liquidity, improving fiscal performance, and better prospects for the country’s sovereign credit rating.

The top monetary official is also optimistic that the country’s external position is likely to continue to benefit from dollar inflows from remittances and investments.

The peso-dollar exchange rate, he said, will continue to be kept at a favorable level. "With healthy inflows, the peso is likely to remain generally stable in the course of the year," he said.

Tetangco pointed out the need to preserve the momentum for economic reforms that will sustain growth in the long-term.

"At the BSP, our job will be to be more steadfast in fighting inflation and reforming the financial sector," he said.

In the area of banking supervision, the BSP said it would focus on reducing the stock of non-performing loans of banks.

But Tetangco said this would only be achieved with the help of the country’s lawmakers.

At present, there are legislative measures pending in Congress such as the extension of the special purpose vehicle law.

There are also moves to enhance the prudential regulation environment of the banking system to align it with international standards and best practices; strengthen corporate governance standards and market discipline mechanisms; develop the domestic capital market further; enhance the payments system and improve the BSP’s supervision technology and capacity.

In response to the need to further enhance financial information critical to investor decisions, the BSP will also continue to work on the establishment of rating agencies, highlighting their role particularly in the conduct of banks’ risk management.

In addition, Tetangco said they would continue to work with Congress on the creation of a centralized credit information bureau system to help private enterprise get better access to credit, reduce borrowing costs and minimize the risk exposures of financial intermediaries.

Chief News Editor: Sol Jose Vanzi

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