THERE is no more question that the Philippines is a prime location for outsourced services, tasks for which a company hires another firm to do, and for offshore services, so called because the services are contracted to a company located outside the country where the client is headquartered.

A study by the Institute for Development and Economic Analysis Inc. (Idea) said that the Philippines is earning over P3 billion annually from the outsourcing and offshoring industry, with most of the players located in Metro Manila.

As these companies expand to cope with exponential growth, rental rates and labor costs skyrocket in Metro Manila, the study said. This raises the pressure to find new locations where there is enough labor pool.

The well known alternatives are Baguio City, Clark and Subic in Pampanga, Cavite City, Sta. Rosa in Laguna and Lipa in Batangas. These are certainly easy to reach from Manila, with good infrastructure and connectivity to boot. But what of others?

Idea chief Cayetano Paderanga Jr., former director general of the National Economic and Development Authority, said that outsourcing and offshoring companies have 11 other sites to consider.

Up north, Tuguegarao City and Cabanatuan City were found to be viable alternatives to Baguio.

Going to the Visayas, the Bayan-commissioned study showed Iloilo, Bacolod, Camarines Sur, Dumaguete and Leyte to be the best sites south of Batangas.

Further down south, Davao City, Cagayan de Oro City, Iligan City and South Cotabato are giving Metro Manila a run for its money.

"What these locations offer are relatively lower cost of doing business, nominal minimum wage, and population density compared with Metro Manila. While Manila still have more graduates in offshoring-related fields who are fluent in English, these locations have enough English-speaking graduates to sustain supply. They may even offer less attrition because the young graduates would be employed near the home, unlike their counterparts in Metro Manila," Paderanga said.

He noted that in general, the alternative sites present minimal business risks from natural calamities and crime.

In the end, though, studies can only serve as guides and it is up to outsourcing and offshoring businesses to check out the alternative sites for themselves, said Paderanga.

"We cannot endorse a certain location, the company has to look through the data and decide where it will actively scout for a suitable site. The Philippines has many locations to choose from, even some with tourist attractions thrown in as a plus-factor. The important thing is that alternative sites are maximized to sustain supply for this fast growing industry and at the same time spread development outside Metro Manila," he said.

The study was commissioned by Bayan Telecommunications Inc., a local phone company which offers telecommunications products and services geared for outsourcing and offshoring companies.



(Inquirer.Net)