MANILA, February 27, 2006
 (STAR) By Alma Buelva - Key cities and provinces around the country are building up their ICT capabilities so they could attract the overflow of technology investments that Metro Manila can no longer adequately accommodate.

At the recent e-Services Philippines conference, local governments and private business groups from Luzon (Naga, Bataan, Bulacan, Pampanga, Pangasinan, Baguio, Camarines Sur), the Visayas (Leyte, Bacolod, Iloilo, Bohol, Cebu) and Mindanao (Zamboanga, General Santos, Cagayan De Oro, Davao) showcased the resources and programs that they have to effectively host IT locators.

Some are more advanced than the others. The cities of Cagayan de Oro in Northern Mindanao and Naga in Bicol are bullish about their ICT offerings despite being in regions known to have peace and order problems.

Both cities are confident they can pass an ICT investors’ checklist when it comes to telecommunications infrastructure and other vital utility services, real estate (including business parks and lifestyle amenities), and most importantly, human capital.

But are these cities safe for business? The answer is yes, according to Naga’s investment promotion officer and a Cagayan de Oro-based IT player.

"There is no peace and order issue in Naga. In fact, our city has been awarded the most peaceful city in the entire Bicol," says Ofero Basbas of the Naga City Investment Board.

For Cagayan de Oro, shaking off the Mindanao stigma is best done by showing how the city has become the center of thriving trade in Northern Mindanao (Region 10).

"The problem is people have this negative concept of the whole Mindanao when it comes to peace and order. But Cagayan de Oro is peaceful and quiet," says Stephanie Caragos, chief executive officer of Syntactics Inc., a software development company operating in the southern city.

Tale of two cities

Cagayan de Oro enjoys the distinction of being the capital city of Region 10 and the classification of being highly urbanized. It has well-defined areas for different industries which include business parks and centers for IT ventures.

The most recent that opened last year was the 20-hectare Pueblo de Oro IT Park, the first of its kind and also the first to be registered with the Philippine Export Processing Zone (PEZA) in Mindanao. Its first business process outsourcing (BPO) locator is Link2Support Inc., a call center that offers technical support for Linksys broadband and wireless network solutions users in the United States, Europe and the Asia-Pacific. With its Metro Manila and Cagayan de Oro offices, Link2Support now has a total of 300-plus agent workstations and over 1,200 employees.

Last year also saw Cagayanos putting up their own IT and BPO companies led by Syntactics, Arriba Telecontact Inc. and Paramedix Inc. Aside from being attracted by the city’s incentives to ICT industry-related investments and potential business gains, local entrepreneurs are getting into BPO to help encourage workers to stay in the city.

Engineer Elpidio Paras, president and CEO of Arriba and Paramedix, admits that his "vested interest is to keep our children to work here instead of going to other places."

"If we can keep the business and our people, we will also keep the economic benefits. We know there’s a lot to be gained in IT so we’re being protective," explains Paras.

But for the same reason he also wants to see multinational BPO players to come to Cagayan de Oro as "(they) will up the ante for us and will have our children to return because there will be more work and opportunities here for them."

In the last six months of operating Arriba, Paras has hired 40 call center agents to provide outbound calling support for their customers in the US and United Kingdom. He is not worried about Arriba being dwarfed by the industry’s giants, saying, "The scraps go to the small players, which are still money so we will be happy to get the overflow from the big players."

Cagayan de Oro has a rich source of human capital as it has access to the manpower pool of neighboring cities and provinces in Mindanao. Based on a survey of the National Statistics Office last year, Region 10 has a labor force of 1.9 million and over 19,000 new graduates in various disciplines, 32 percent of whom come from Cagayan de Oro.

Syntactics’ Caragos says the city is able to produce enough graduates, making it easy for her company and other BPO companies to find employable people.

"We have no problem with finding manpower for programming and software development and we also have available manpower for BPOs because we have graduates of accounting, nursing and law. Last year we had some 4,000 graduates of IT and other disciplines needed by the BPO industry," Caragos says.

Naga City’s effort to make itself an IT destination is not much different from Cagayan de Oro. Together with the local government, private business groups and the academe, Naga City has so far created an environment that is hopefully conducive for IT investors.

Eight hours away by land and 45 minutes away by plane from Manila, Naga City has developed hundreds of hectares of land for industries and commercial centers. According to the Asian Development Bank, Naga is one of the fastest-growing economies in the country with an average growth rate of 6.5 percent annually and accounting for 21 percent of total investments in the Bicol region.

"Bicol is known to be the second most depressed region in the country. But Naga is an island of prosperity in a sea of poverty," says Basbas of the Naga City Investment Board

He says one of the city’s immediate thrust is finding new niches in ICT, animation, wireless applications and mobile gaming, while strengthening its services industry and creating more tourism and trade centers.

Just last month Naga saw the opening of its first call center, Global9, which has 100 seats, reports Basbas. Also operating in the city are four medical transcription companies and the city’s first home-grown 3D digital animation company, Geebo Digital.

"Geebo is Bicolano word for work or to create," says Basbas. "And speaking of work, Naga produced almost 8,000 graduates of BPO-related disciplines (last year). Naga is physically small and it’s not a port city nor do we have export processing zones, but we have quality people as our most important resource."

Meanwhile, for IT investors wary of natural calamities wreaking havoc on their businesses, the ICT promoters from both cities emphasized that Cagayan de Oro experiences no typhoons and earthquakes all year-round, while Naga is a long way from the active Mayon Volcano, which is in Albay.

The rise of Bataan

Another province looking at transforming itself into an IT hub is Bataan. One of its main attractions that may help convince ICT investors to locate there is its close proximity to Manila, Subic in Zambales and Clark Field in Pampanga.

According to Edna Dizon, chief of the Business Regulation and Consumer Welfare Division of the Department of Trade and Industry in Bataan, they will soon hold a consultative meeting with the public and private stakeholders to identify the province’s ICT strengths.

"There is potential (for IT) in Bataan and we are now in the process of assessing what it can offer. So far DTI has tied up with various schools to strengthen the IT knowledge base in the province," Dizon says.

Aside from the availability of major commercial telecommunication services in the province as well as reliable water and power supply, Bataan has a fairly large academic community. It has three state colleges and universities, namely the Bataan Polytechnic State College, Polytechnic University of the Philippines, and Bataan State College. The private schools include Sienna College and San Juan de Letran. Dizon says De La Salle University also plans to open a college in the province.

Inside Bataan are three economic zones, one of which is the 165-hectare Hermosa Ecozone. Its marketing manager, Jeronimo Salonga, says they have allotted five hectares that can easily accommodate 10 to 15 ICT locators.

IT hills in Bohol

This top tourist destination has been annually producing nearly 5,000 college graduates over the past three years. This number, the Bohol provincial government believes, can support the operations of BPO locators.

Key telecommunications and other infrastructure are also in place in Tagbilaran City where one will find Abacus, a 10-seater telemarketing firm, and Auza.Net which provides technical support for Internet service and Voice over IP.

Bohol believes that by supporting small BPO startups with 50 to 100 seats, especially those that will specialize in non-voice services, it can slowly build an IT industry of its own. It also recognizes the need to adopt a focused and strategic manpower development program with the help of local schools and BPO companies based in Cebu.

The province, however, is yet to have an IT park although there is a plan to develop its new Capitol site into one. When this becomes a reality, Bohol hopes IT would be another reason why people would want to go there.

Chief News Editor: Sol Jose Vanzi

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