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Global Sourcing of Services & Philippines

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Presentation by Anthony Rojas-Chua at the World Bank seminar on Global Sourcing of Services, April 16, 2008

Presentation by Anthony Rojas-Chua at the World Bank seminar on Global Sourcing of Services, April 16, 2008

Published in Technology , Business
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Transcript

  • 1. Secretary Ray Anthony Roxas-Chua III Commission on Information and Communications Technology April 16, 2008 The Philippine Offshoring and Outsourcing Industry
  • 2. Industry Overview
  • 3. Industry Growth Source: Business Processing Association of the Philippines Total Jobs (000s) Revenue ($B)
  • 4. Segment Breakdown Source: BPAP, CICT, Department of Trade and Industry 2007 Breakdown by Revenue 2007 Breakdown by Employees Software 9% Contact Center 74% Back Office 8% Transcription Engineering Animation Software 10% Contact Center 66% Back Office 13% Transcription Engineering Animation 4.9B USD 300K Employees 6% 3% 2% 4% 3% 2%
  • 5. Philippine Cyber Corridor Cities with Operators Bacolod Bacoor Baguio Batangas City Cagayan de Oro Cainta Camarines Sur Prov. Cebu Clark/Angeles Davao Dumaguete Iloilo Legaspi Lipa Manila NCR Sta. Rosa Other Ready Cities Cabanatuan Dagupan General Santos Leyte Prov. Subic/Olongapo Urdaneta Cities with Operators Other Ready Cities
  • 6. Awards and Distinctions Offshoring Destination of the Year: Philippines Top 10 Asian Cities of the Future: #7 Quezon City #8 Cebu #10 Davao Top 50 Emerging Outsourcing Cities: #4 Cebu #23 Pasig #36 Baguio Top 10 Outsourcing Cities in Asia Pacific: #2 Manila
  • 7. Critical Success Factors
  • 8. Abundant Talent Source: Commission on Higher Education Manila NCR Rest of Phils. Total 2006 Graduates 104,858 435 5,145 727 86,394 7,167 4,990 330,646 956 8,265 1,318 245,706 44,443 29,958 435,504 1,391 13,410 2,045 332,100 51,610 34,948 Baccalaureate Total Doctorate Master’s Post-Baccalaureate Pre-Baccalaureate Technical-Vocational
  • 9. Quality Human Capital
    • Abundant labor force of 32 million
    • English proficiency
    • Cultural adaptability
    • Strong customer service orientation
    • Large pool of accounting and business graduates
    • Highly trainable
    • Cost effective
    • High level of commitment and loyalty
  • 10. World Class Infrastructure
    • Telecommunications
      • $10B high-bandwidth fiber backbone and digital network
      • Redundant international connectivity
      • Deregulated telecommunications industry
    • Power
      • Reliable electricity with excess capacity over current demand
    • Real Estate
      • Low rental rates with favorable terms
      • Dedicated IT parks in urban areas
  • 11. Government Support
    • Investment Incentives
      • Income tax holiday
      • Duty free importation of capital equipment
    • Training
      • PhP350M (USD8M) in training scholarships allocated to O&O industry
    • Promotion
      • Philippine O&O competencies highlighted during trade missions
  • 12. Cost Effective Labor Source: McKinsey Global Institute, 2006 Labor Cost Index (USA = 100)
  • 13. Service Oriented People
    • Significant Overseas Filipino Worker (OFW) population
      • 8 million Filipinos worldwide
      • Remittance of USD14.4B in 2007
      • Includes nurses, doctors, sailors, musicians and IT professionals
    • O&O industry allows Filipinos to provide services globally without leaving the country
  • 14. Socio-Economic Benefits
  • 15. Creates Jobs Source: BPAP Total Offshoring and Outsourcing Jobs (000s)
  • 16. Provides High Incomes O&O Salaries Quintile 1 st 2 nd 3 rd 4 th 5 th
  • 17. Supports Related Businesses O&O Industry TAXES
  • 18. Brings Work to the People Source: National Statistics Office and BPAP Population Breakdown O&O Jobs Breakdown Manila NCR Manila NCR Rest of Phils. Rest of Phils.
  • 19. Challenges
  • 20. Challenges Ahead
    • Talent development
    • Currency appreciation vis-à-vis USD
    • High concentration of customers in USA
    • Dependence on voice services
    • Sustainability of labor cost advantage
    • Competition from other countries
  • 21. Thank You!