Davao City Eyes Higher Outsourcing Ranking as Space Increases

By Carmelito Q. Francisco, Correspondent 
and
Marifi F. Jara, Mindanao Bureau Chief

BusinessWorld online

DAVAO CITY -- With available office space for business process outsourcing (BPO) and other information technology (IT) operations increasing to 37,000 square meters from only 7,500 a year earlier, stakeholders are optimistic that the city will improve its rank of 69th among the world’s top 100 outsourcing destinations.

The Matina IT Park, located in the southern side of the Davao City central area, is in the final stages of construction for the first of three buildings and is expected to open this year. -- Marifi F. Jara

The ranking is based on the December 2014 report of Tholons, Inc., an international consultancy firm for outsourcing research, ranking Davao City at 69th, the same spot it held when it was first included in the list in 2010.

Davao, considered as an “aspiring” city, held the same rank except in 2013 when it fell one step to 70.

Samuel R. Matunog, president of the group Information and Communication Technology-Davao, Inc. (ICT Davao), said the additional space is expected to be ready by July this year, including the new Matina IT Park and the Felcris Central mixed-use complex of Felcris Hotels and Resorts Corp.

“The industry is confident that the spaces will be filled up,” Mr. Matunog said.

New locators are expected to settle in the city within the year, while some existing operators are expected to expand.

NEW LOCATORS

In the Board of Investments’ list of approved projects in 2014, two in Davao City are classified as ‘new export services providers’, both controlled by foreign companies.

One is Cybercity Teleservices (Phils.), Inc., a 99% British company that will operate a contact center with an investment of almost P119 million and a projected labor intake of more than 2,000.

The other is US-controlled Flatworld Solutions (Philippines), Inc. for BPO operations. Its project cost is P13 million and expected work force is 349.

Meanwhile, among those expanding operations is Sutherland Global Services, which is hiring in the first quarter of the year about 700 call center agents, customer sales representatives for voice and chat, and IT support experts.

Grace P. Garay, Sutherland senior manager for recruitment, said the US-based company, which has been operating in the city for seven years, currently has about 2,000 employees.

Another company official, Marsy Iñigo, manager for talent management, said there are other expansion plans but these are still in the drawing board.

Sutherland is looking at locating in other key cities within Mindanao, including like Tagum in Davao del Norte, Cagayan de Oro in the north, and General Santos within the Central Mindanao Region.

Ms. Iñigo, however, stressed that growth will be highly dependent on the “availability of talent.”

In August, ICT Davao, the umbrella organization of ICT groups in the Davao Region, initiated a partnership with several academic institutions in Davao City to review and strengthen the existing curriculum for ICT-related courses.

The group has acknowledged the lack of employable graduates for BPO and other ICT-related positions compared to the existing demand and industry growth projections.

In the Tholons top 10 are Metro Manila and Cebu, both considered as “established” outsourcing cities, at 2nd and 8th, respectively.

Other aspiring Philippine cities are Iloilo (95th) in the Visayas and Sta. Rosa (82nd) in southern Luzon.