4. One of the fastest growing
economies in Asia
2014 GDP at 6.1%, second
in Asia Pacific after China
With GDP growth forecasted
to be 6.5% in 2015
Expected to lead the growth
in ASEAN region
ASEAN countries GDP at
only 4.6 to 5.1%
PHILIPPINE TAILWINDS
5. KEY ECONOMIC GROWTH DRIVERS
OFW
Remittances
IT-BPM Industry
Tourism and
Services
Public-Private
Partnership
By 2017, the IT-BPM Industry
will overtake OFW remittances,
with revenue of USD 29 billion
inUSDbillion
8.9 11.0 13.2 16.1 18.1 21.3
18.7
20.1
21.3
23.4
24.3
25.6
2010 2011 2012 2013 2014 2015
6. GREAT TIME FOR THE PROPERTY SECTOR
Demand for residential properties
is being driven by the middle class
Of the USD 24.3 billion
repatriated by Overseas Filipinos
in 2014, a third or USD 7.0 billion
went to property investments
The performance of the IT-BPM
industry is translated to higher
demand for office requirement
Retail market and developments
of hotels are also expected to
buoy the property market
By 2018, half of retail property
supplies will be in the provinces
2010
48.6%
2030
56.3%
2050
66%
Source: CNN Philippines, 4 August 2015
Percentage of
population living in
urban areas
7. REGIONAL GROWTH RATES
9.2
5.4
6.8
6.2
4.4
6.7
1.3
8.1
3.4
7.4
5.3
6.7
8.4
5.9
3.2
5.7
6.4
9.0
5.1
6.5
4.2 4.5
8.4
7.2
9.4
6.4
NCR CAR Ilocos Cagayan
Valley
Central
Luzon
Calabarzon Mimaropa Bicol Western
Visayas
Central
Visayas
Northern
Mindanao
Davao Socsargen
2012-2013 2013-2014
Central and Northern Luzon Southern Luzon MindanaoVisayas
Fastest
growth
in 20142nd fastest
growth in
2014 3rd fastest
growth in
2014
36% of
GDP
9% of
GDP
17% of
GDP
Source: Philippine Statistics Authority
8. CONSTRUCTION PROJECTS: 2Q 2015
CAR, 1.0%
Region I, 6.8%
Region IVA, 27.7%
Region IVB, 2.0%
Region VI, 4.0%
Region VII, 8.1%
Region IX, 3.2%
Region II, 2.9%
Region III, 10.7%
NCR, 8.2%
Region V, 2.8%
Region VIII, 4.5%
Caraga, 3.1%
Region XI, 5.7%
Region XII, 2.0%ARMM, 0.0%
Source: Philippine Statistics Authority
No 2
No 1 No 3
No 4
No 5
9. THE ASPIRATIONAL MARKET
The future of the market is with
the growing middle class
Consumers are now giving in to
aspirational needs
Middle class is now spending
more for holidays and home
improvements
Upscale Filipino is already
comfortable financially and like
finer things in life
They set the standards for the
aspirational middle class
As the Philippines sees more of both
kinds of consumers, the challenge for
brands and the markets is to understand
them, and offer not only products and
services but experiences that touch on
their inner needs
129
208
320
Disposable Income
2009 2013 2018
InUS$billion
10. FILIPINO MIDDLE CLASS
4
3
III, 12
IV-A, 19
2 3
VI, 7
VII, 6
3 2
3 4
3
NCR,
26
2
0
2
I
II
III
IV-A
IV-B
V
VI
VII
VIII
IX
X
XI
XII
NCR
CAR
ARMM
CARAGA
Out of 21 million households, the middle class
accounts for 3.6 million or 17%
With monthly family income between Php
31,500 to Php 78,900
Combined lower middle and upper middle is
about 9.87 million households or 47%
1/3 of Overseas Filipino Workers belong to the
lower middle class, at 5.8 million households
Source: Rappler, 8 July 215 using data from the Philippine Statistics Authority
InPercent(%)
11. OUR 2.3 MILLION HEROES
NCR
10.5
CAR
2.2
I
8.2
II
6.7
III
15.5
IV-A
17.9
IV-B
2.1
V
3.4
VI
8.6
VII
6.5
VIII
1.1
IX
2.6
X
3.4 XI
2.7
XII
4.6
CARAGA
2 ARMM
1.8
InPercent(%)
CALABARZON, Central Luzon,
National Capital Region,
Ilocos Region and Western
Visayas
Source: Philippine Statistics Authority, 2014 Survey on Overseas Filipinos
12. NICHE MARKET
4
2
III, 9
IV-A,
15
4 3
VI, 7
4
3 1
4
2 1
NCR,
37
2
0 1
I
II
III
IV-A
IV-B
V
VI
VII
VIII
IX
X
XI
XII
NCR
CAR
ARMM
CARA…
The rich numbering 150,000 households or 0.7% of
the national total
With a monthly family income of at least
Php157,800 and above
Combined with the upper income at 320,000
households or 1.5%
The number of high net worth Filipinos (with assets
of USD 30.0 million and above) grew by 4.5% in
2014 to 690 from 660 the previous year
Value of these individuals grew by 5.3% to USD100
billion in 2014
Source: Rappler, 8 July 215 using data from the Philippine Statistics Authority; UBS Ultra Wealth Report 2014
InPercent(%)
13. WHO WILL BE SHAPING THE MARKET
• The Filipino
millennials
• In 2014, 27.0
million or quarter
of the Philippine
population
• Now acccounting
for 50% of the
current workforce
• Those in the age
bracket of 28 to
33 are now getting
married
27.0 million with
disposable income
Tech-savvy, 70% of
internet users
Parents still influence
decision
Most prefer to rent
than purchase
Prefers luxury over
necessity
Sustainability-
conscious
14. PROPERTY CYCLE IN THE PHILIPPINES
Mid end
Residential
Hotel and
Lesiure
•Late upswing
•Sustained growth in
demand, increasing
construction
Luxury
Residential
•Early downsizing
•Positive but falling
demand, increasing
vacancy
•Late downsizing
•Falling demand,
decreasing
vacancy
Office
Industrial
Retail
•Early upswing
•Increasing demand,
decreasing vacancy
15. HOW IT-BPM IS DRIVING THE GROWTH
OfficesOffices
RetailRetail
ResidentialResidential
EducationEducation
Shift to a “township” or
“communicities” model”
A “live, work, play environments”
versus one-off products
Welcome refocusing by the IT-
BPM industry
Compared to others, those in IT-
BPM have higher income
16. 2015 TOP10 OUTSOURCING DESTINATIONS
1 Bangalore, India 6 Hyderabad, India
2 Manila, Philippines 7 Pune, India
3 Mumbai, India 8 Cebu, Philippines
4 Delhi, India 9 Krakow, Poland
5 Chennai, India 10 Shanghai, China
Metro Laguna
82
Metro Laguna
82
Metro
Bacolod
90
Metro
Bacolod
90
Iloilo
91
Iloilo
91
Baguio
95
Baguio
95
Metro Clark
98
Metro Clark
98
Source: Tholons
17. OUTSOURCING AND OFFSHORING
Business
Process
Business
Process
Specific business
processes
Specific business
processes
Back Office
(Internal functions)
Back Office
(Internal functions)
Front Office
(Customer Services)
Front Office
(Customer Services)
Data and Document
Management
Data and Document
Management
Knowledge
Process
Knowledge
Process
Business process with
more complexity
Business process with
more complexity
EngineeringEngineering
LegalLegal
MedicalMedical
Information
Technology
Information
Technology
Infrastructure,
software
development to
maintenance
Infrastructure,
software
development to
maintenance
Application
development
Application
development
Staff augmentationStaff augmentation
InfrastructureInfrastructure
Professional
Services
Professional
Services
Subject matter
expertise on a specific
field
Subject matter
expertise on a specific
field
Business processBusiness process
EngineeringEngineering
Environment and
Sustainability
Environment and
Sustainability
19. ARCHITECTS IN THE IT-BPM SPACE
IT-BPM
Industry
Architectural
Designers:
Offices,
Homes, Retail,
Recreation
Fit-Out
Contractors:
IT-BPM Offices
IT-BPM
Talents:
Engineering
Service
Outsource
20. TYPICAL IT-BPM CENTER
Meeting Room Training Room Coaching
Room
Pantry/Cantee
n
Rest/Break
Area
Clinic Comfort
Rooms
Lockers/Pigeo
n Holes
21. WHERE ARE THE 1.3 MILLION JOBS
Central Luzon Hub
3%
Metro Manila
75%
Calabarzon Hub
3%
Davao-Gensan
2%
Western Visayas
3%
Central Visayas
6%
Other parts
8% of the country
outside of major
hubs
80% in NCR
6% in Central
Visayas (mainly
Cebu)
Source: Jones Lang Lasalle
22. Centers of Excellence
• Metro Manila
• Metro Cebu
• Metro Clark
• Metro Bacolod
Next Wave Cities
Baguio City
Davao City
Dumaguete
Iloilo
Lipa City
Metro Bulacan
Metro Cavite
Metro Laguna
Metro Naga
Metro Rizal
Next Wave Cities
Centers of Excellence
IT-BPM NEXT WAVE CITIES
Source: DOST-IBPAP
23. OF THE 100 MILLION FILIPINOS…
Metro Manila with an area of
600 km2 out of 300,000 km2
22% in the day time
18% in the night time
SUBICSUBIC
BATANGAS
CLARKCLARK
24. WHERE GROWTH IS NOW HEADING
Regions I and II
Dagupan
Laoag
San Fernando
Urdaneta
Vigan
Tuguegarao
Central Luzon
Balanga
Cabanatuan
Olongapo/Subic
San Fernando
Tarlac City
Other Regions
Batangas City
Purto Princesa
Legapsi
Tagbilaran
Cagayan de Oro
General Santos
Source: DOST-IBPAP
27. NOT JUST THE CULINARY CAPITAL
Pampanga is now poised for
metropolitan development
Within an ideal distance from
Metro Manila
A population of 2.3 million,
0.5 million households
Metro Clark is ranked 98 in
Tholons Top 100 Outsourcing
Destination for 2015
Construction projects at Php
2.0 billion or 215,399 sqm
for 2Q of 2015
28. THE FUTURE: CLARK GREEN CITY
9,450 hectares within the
Clark Special Economic Zone
Designed by AECOM
Envisioned to become the
Philippines’ most modern
and the first technologically-
integrated city
With a total project cost of
US$ 14.0 billion
Once developed, expected to
contribute Php 1.6 trillion to
the Philippine economy
1,120,000 residents
800,000 workers.
29. PHILIPPINE ESO SECTOR
ACE Consultants and Contractors
Property Developers
Third Party
Providers
Shared
Services
Captive
RevenueinUS$million
11,920 FTEs in 2013
228
163
172
206
216
2009 2010 2011 20112 2013
11,92010,8369,03012,000
There are about 45 engineering design
companies in the Philippines
8,579
Source: IBPAP
30. ENGINEERING SERVICE OUTSOURCE
Manufacturing
Upstream product
engineering
•Concept design
•Simulation
•Design engineering
Manufacturing
Upstream product
engineering
•Concept design
•Simulation
•Design engineering
Manufacturing
Downstream
product engineering
•CAD/CAM/CAE
•Embedded software
•Localization
•Plant and process
engineering
Manufacturing
Downstream
product engineering
•CAD/CAM/CAE
•Embedded software
•Localization
•Plant and process
engineering
Architecture
design
•Design process
•Building
Management
models
Architecture
design
•Design process
•Building
Management
models
31. ESO AND THE ACE SECTOR
Architectural Construction
and Engineering
The sector of the construction
industry that provides services on
architectural design, engineering
design and construction services
This sector is very active in the
adoption of Information,
Communication and Technology
The Philippine IT-BPM industry is
looking at higher value services to
sustain its growth
Great potential to
be the new jewel of
the IT-BPM Industry
32. GLOBAL ESO MARKET
19%
9%
21%
10%
13%
9%
19%
Automotive
Aerospace
Hi-Tech
Construction
Pharma
Consumer Electronics
Others
US$ 750 billion
Global spending for engineering
services
US$ 1.1 trillion
Projected ESO market by 2020
US$ 15 billion
Value offshored or 2%
25.78% CAGR
Engineering services outsource
growth rate
India accounts for 12%
The 88% shared mainly by Canada,
China, Mexico and Eastern Europe
By 2020 India is estimated to have
25% of the much larger market
Philippines account for 1% of the
current market
Other emerging destinations: Brazil, Russia,
Hungary, Czech Republic, South Africa,
Malaysia, Turkey and Ireland
33. ENGINEERING DESIGN SECTOR
80.080.02009 79.879.82010 85.185.12011 90.290.22012 92.792.72013
In US$ billion
4.3
4.9
5.1
5.8
7.2
9.9
19.2
20.1
20.5
General Bldg
Transportation
Petroleum
Power
Hazzardous
Water
Sewerage
Industry
Others
Mfg
Telecom
Asia
Pacific
31%
Canada
25%
Europe
21%
Middle
East
11%
Latin
America
8%
Africa
4%
International Market x USA
34. ESO is a crucial resource
pool of construction
companies for engineering
expertise and niche project
requirements
ACE companies relies on
the Building Information
Modeling (BIM)
This indirectly translates to
engineering services being
outsourced
ESO, ACE AND BIM
35. IS IT TRUE THAT?
is setting up a “mega” global center in the Philippines
Skidmore, Owings & Merrill LLP, one of the largest and most influential architecture, interior design, engineering, and urban
planning firms in the world. Founded in 1936, we have completed more than 10,000 projects across 50-plus countries. We
are renowned for our iconic buildings and our steadfast commitment to design excellence, innovation, and sustainability
36. ASEAN ECONOMIC COMMUNITY
10 member countries10 member countries
Combined GDP of
US$ 2.4 trillion
Combined GDP of
US$ 2.4 trillion
Total Population of
626 million
Total Population of
626 million
Land area of 4.46
million km2
Land area of 4.46
million km2
Foreign direct investment
of US$ 110 billion
Foreign direct investment
of US$ 110 billion
The 7th largest economy
in the world
The 7th largest economy
in the world
As the Philippine
Government opens up the
country to free flow of
services that include the
construction sector, we
should look at other member
countries not as competitors
but rather as collaborators
37. READY OR NOT, AEC IS NOW UPON US
We must adjust our
strategies to take advantage
of the opportunities and
cope with threats associated
with the integration
We need to up-skill, adopt
best practices and use of
technology
We need to revisit our
academic curriculum in
order to adopt to the
changing world and time
38. A TRANSFORMATIVE CAPABILITY
A process involving the generation
and management of digital
representations of physical and
functional characteristics of a facility
Building Information Modeling (BIM) is
transforming how cities, buildings and
systems are designed
With Smart Cities initiative on a global
scale, a path to enabling its digital DNA
comes from the use of the BIM
