Rapes: BPO in Cebu’s growth 20% of 50,000 workforces annually

By Katlene O. Cacho

The business process outsourcing (BPO) industry will continue to propel Cebu's economy as the province's major economic driver, industry leaders said. The BPO sector is also poised to grow even bigger in the coming years, they said.

"In 2011, BPO companies accounted for 40 percent of positions posted in a jobs listing website. The expansion of BPO operations led to the rise in the demand for office spaces. This year, the region saw property developers putting additional investments in the leasing business," said Cebu Property Ventures Development Corp. (CPVDC) president Francis Monera.

The industry recorded a 20 percent annual growth rate.

CPVDC is the developer of Cebu IT Park. It currently has eight building under construction.

Workforce

Monera said BPO companies are continually drawn to Cebu City with its workforce and healthy fiscal environment. He said Cebu is supported by nine large universities that turn out many workers for IT and BPO companies.

"The BPO industry in Cebu is fast-growing because IT/BPO companies in the US have found a viable destination in Asia where they can relocate after the 2008 global economic crash. The industry will continue to offer a lot of opportunities and will become Cebu's main driver of economic growth," said Cebu Chamber of Commerce and Industry (CCCI) chairman for Information and Communications Technology (ICT) Jerry Rapes.

This year, global outsourcing firm Aegis People Support unveiled its own Aegis Tower Cebu at the Cebu IT Park. The company said their decision to build in Cebu is a sign of their "commitment to and confidence in the country's booming BPO industry and Cebu's workforce."

Monera said they are anticipating an increase of 20 percent in the current 50,000 workforce with the completion of buildings within Cebu Park District.

CPVDC is looking at an estimated 11,000 additional seats with eBlock 2, Skyrise 4 and the Aegis Tower Cebu.

Stream Global, a major outsourcing company, was reported to be hiring between 60 and 70 employees weekly. Convergys, on the other hand, is also expanding with its new office in Cebu, according to Monera.

Some of the firms that expanded in Cebu this year include HP, Fluor Daniels, Dell, Convergys and JP Morgan & Chase.

Non-voice services

"Wide-spread employment is a by-product of these developments with a 35 percent increase in working population for both parks – majority in the BPO industry. (It strengthens) our bid of making Cebu the BPO capital in the Philippines next to Metro Manila," Monera said.

Rapes, meanwhile, said Cebu is not only well-positioned for voice services but also for Knowledge Process Outsourcing (KPO), information technology outsourcing and non-voice services.

He said it is just a matter of preparing Cebu "to get to a higher level," particularly in terms of supplying the industry with skilled, competent and highly qualified workforce.

"There is not always enough people," said Rapes, the president of information technology outsourcing (ITO) company Exist Global.

He said companies now move out from major call center hubs like Metro Manila and open offices in "next wave cities."

Monera, who sits as the chairman of the board for Cebu Educational Development Foundation for Information Technology (Cedf-it) said the private sector, academe and local government have collaborated to improve the skills of potential workers for increased manpower pool via proficiency/certification, retraining and jobs-skills matching programs. The stakeholders are also intensifying programs that support infrastructure and tourism service to strengthen the investment climate in Cebu.

Scalability

Monera emphasized the need for talent scalability, not only in terms of available quantity of the workforce but also in training to match the skills required by companies.

Cedf-it announced last October it will get part of the P500-million stimulus fund committed by the Aquino government to facilitate "near-hire" training programs of IT-BPO companies. It said about P5 million worth of scholarships from the Technical Education and Skills Development Authority (Tesda) will be used to conduct "near-hire" trainings for 1,000 prospective IT-BPO employees here.

Monera also cited Cebu's "big opportunity" in higher level services or KPO. He said although, manpower requirement for this category may not be as high as voice-related jobs, these are high-value services that mean higher average compensation for the Filipino talent.

While there is continued growth ahead in the BPO industry, Rapes said "being complacent" may threaten BPOs' rosy outlook for 2012.

"We need to create more people for the industry rather than compete with each other. We need to produce more skilled workforce for a bigger ecosystem," he said.

Rapes also announced that the outsourcing industry will soon start the second phase of the Cebu IT/BPO roadmap so it could further maximize the potential of IT/BPO services.

What to do

He said the study will "drill down what Cebu needs to get to higher level."

"We have to know where we are going and what to do next now that we know we have the capabilities to do more KPO," Rapes said.

He said that while waiting for the second phase of the study, entrepreneurs should start looking at opportunities in offering KPO services.

He said India has higher revenues than the Philippines because they do difficult services. "But if the Philippines will capitalize on its KPO potential and do its homework, the IT/BPO revenues will grow eventually," Rapes said.

The Business Process Association of the Philippines targets to grow the industry by $25 billion in revenues in 2016 and increase IT/BPO employment to more than one million.

A bill seeking to create a Department of ICT was also filed as a support to the growing industry.

Published in the Sun.Star Cebu newspaper on December 30, 2011.

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Philippines warship arrive advanced Palawan islands where China eyed to drill in January 2012

The Barko ng Republika ng Pilipinas (BRP) Gregorio del Pilar (PF-15), the newest and most modern frigate of the Philippine Navy, arrived in Palawan islands in the West Philippines Sea (South China Sea) to provide a much needed boost in the maritime defense capabilities in the area.

Philippines' lone modern frigate would face a heavy challenged as china announced to start drilling around Palawan islands beginning January 2012.

In the map disclosed for china's new drilling prospected area remains a thrill as it is showing the area of Mischief reef under the Philippines' territory of 130 Miles from the Mainland Palawan but never mentioned the exact location.

Mischief Reef is under the Exclusive Economic Zone of the Philippines according to the UNCLOS 200 Nautical Miles Exclusive Economic Zone.

China has claimed the islands under the Province of Palawan as their territory "We Owned everything" China quoted in previous comments.

In a local radio interview, Captain Alfred Cruz, Commanding Officer of PF-15, said the ship will conduct maritime security and sovereignty patrols to beef up protection of the country's territorial waters, as well as conduct search and rescue missions in the western front.

PF-15, commissioned as a warship of the Philippine Navy, will also augment naval security to the Philippines biggest investments of natural gas at the Malampaya Natural Gas project and other petroleum service contract areas under the Department of Energy (DOE) in the West Philippine Sea.

Cruz said that the ship is now the Navy's largest and fastest which can run with a speed of 40 knots per agility test. He said that it is equipped with helicopters, the first of which was donated by the Department of Tourism (DOT).

With a compliment of more than a hundred officers and enlisted personnel, the high-endurance Hamilton-class cutter can sustain a month-long mission without re-provisioning.

The home of PF-15 is the Ulugan Bay Naval Station in Barangay Macarascas, located about 45 kms northwest of this city.

PF-15 was acquired through the United Excess Defense Act using the Malampaya Natural Gas proceeds under the DOE. It was used by the United States Coast Guard for law enforcement and search and rescue missions. (DOS/VSM/PIA-Palawan)

China will start to drill oil forcefully in the Philippines Waters – January 2012

China will soon put its first deepwater survey vessel into use in the South China Sea, an official with China Oilfield Services Ltd (COSL) said, part of an effort by the world's top energy consumer to tap its underexplored deep waters.

Ocean Oil 708, with a capacity to work in water depths of 3,000 meters and a drilling depth of 600 meters below the seabed, is one of the deepwater equipment that leading offshore oil and gas developer CNOOC planned to expand its deepwater capability.

The vessel is owned by COSL, a specialized oil service unit of China National Offshore Oil Corp (CNOOC).

The COSL official said the vessel will be used in early-stage exploration works such as geoprospecting, but declined to specify which area of the South China Sea the vessel would be firstly employed in.

CNOOC Ltd, which runs almost all of CNOOC's oil and gas production assets, is preparing to drill its first-ever deepsea well in the northern part of the South China Sea around the beginning of 2012 by using Ocean Oil 981, China's first home-made semi-submersible deepsea rig.

China has so far drilled less than 15 deepsea exploration wells, all of which have been done by CNOOC's foreign partners.

Baoji Oilfield Machinery Co, a unit of top Chinese oil firm CNPC, manufactured the drilling system for the Ocean Oil 708, the China Petroleum Daily reported.

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No water, Now wives - China is dying soon

By: Dr. Philip Neches

Chairman, Foundation Ventures LLC

huffingtonpost.com

When smart people with very different viewpoints come to similar conclusions, it's wise to take notice. In the Left corner: Dr. Paul Krugman, Nobel Prize winning economist, Princeton professor, MSNBC regular, New York Times columnist. In the Right corner: Dr. Jack Wheeler, aide to President Reagan and both Presidents Bush, author, blogger. The Right loathes Krugman as a soft-headed sell out; the Left regards Wheeler as a self-aggrandizing nut. The subject: China.

In a post on his Website To the Point (subscription required, posted October 14, 2011), Wheeler summarized the situation in China tersely, "No water, no wives, no banks -- and a hyper-dangerous military." Wheeler's writing tends towards melodrama and exaggeration for effect. Still, consider each point in turn.

No water: China's population is about three times compared to USA, in a land area about the same as the 48 contiguous states. But almost 80% of China's land area is mountain or desert, unsuited for cities or farms. Try to imagine three times the population of the U.S. living in an area not much larger than the 13 original colonies.

Further, the headwaters of China's great rivers are not actually in China: they're in Nepal, Tibet, and Kashmir. Small wonder China gets touchy about any hint of losing sway in those areas: China would literally die of thirst.

In the U.S. are so abundantly blessed by nature that we find it difficult to imagine what a problem water is too much of the rest of the world. Nonetheless, water supply is the greatest threat to civilization in much of the world, including China. Not energy. Not food. Not land. Water.

No wives. Well, certainly a big shortfall: China has something like 100 million more young men than young women. Wheeler writes ominously of the political and military dangers from 100 million bachelors.

But China has an even bigger demographic problem, as I pointed out in my post "The Sun Also Sets". China constrained their birth rate through social policy only possible in a brutal dictatorship. But they also made the same strides in public health that the Western world made in the early 20th century, dropping their death rate by a factor of three and increasing life expectancy from 40+ to 70+ years in just a generation. With falling births and falling deaths, China's population is aging. China is in a desperate race to get rich before it gets old. They will lose.

No banks. Wheeler points out that the Chinese state banks are technically insolvent. Krugman provides more color and detail in his op-ed piece "Will China Break?" Krugman sees the classic signs of a bubble: rapid growth in credit, surging real estate prices, "shadow banking" systems without government regulation or guarantees, and huge increase in investment without corresponding increase in consumer spending. Even through the murky lens of official Chinese economic data, Krugman sees the bubble bursting.

We had our financial crisis in 2008. Experts agree that we still have a long way to go to recover from it, and that many of the vulnerabilities that caused that crisis persist in our economy. Europe seems to be still going into the depths of their problems. Again, experts expect a prolonged recovery.

Is China the next to fall? If so, they cannot expect much help from the U.S. and Europe. A rise in the Yuan, the likely first consequence of trouble in China, benefits the U.S. and Europe doubly: it makes our debt held by China worth less and easier to repay, and it increases the cost of Chinese goods to our consumers, providing a stimulus to local industry and employment. The trouble in the U.S. already shuttered numerous factories in China. But that could just be a fore-taste of what could come.

If you look at raw unemployment numbers, the current problems in the U.S. and some countries in Europe are almost as bad as the Great Depression of the 1930s. But the political and social consequences are no where near the same. The public and private mechanisms put in place since the 1930s feel the strain. But they are holding, in the sense that no one in the US or Europe seriously worries about armed revolution or anarchy, as was the case in the 1930s.

Without similar safeguards in place, China could be a different story. While the economic consequences can be calculated, the political and social results cannot. Speculation and imagination are our only sources of insight.

Dangerous Military. China's military establishment is second only to ours. If one looks at spending alone, it seems no contest: China spends about what Britain and France put together spend, and about 1/6 of what we spend. But China is actually far less militarized than the United States, with 3.4 active, reserve, and paramilitary per 1,000 population, versus 9.5 for us. Most advanced countries spend between 1.8% and 2.8% of GDP on their military. China's military budget is 2.1% of GDP, at the lower end of the pack. Compare that to 4.8% for us.

What is the upshot (pun and all) of these figures? Either the U.S. is spending too much on its military, or China has the capacity to spend a lot more than it currently spends. Maybe both statements are true.

Wheeler speculates on two possible paths for Chinese military adventurism. Asserting more control of the South China Sea represents a reasonably credible scenario, but also one that would quickly unite the maritime world (U.S., Japan, Europe, India, Southeast Asia or ASEAN countries , OPEC, Philippines, Indonesia, Australia, etc.) to defend the nearly 50% of the world's shipping that goes through those waters. Wheeler offers a more nightmarish scenario: China invades Siberia to gain water, land, oil, and to divert its 100 million odd excess bachelors.

In the long lens of history, this may not be as far-fetched as it first sounds. Much of Siberia was the Maritime Provinces of China until the expanding Russian Empire seized control around 1860. The Russian Empire expanded from its start around Kiev around 950 AD to the height of the Cold War a thousand years later. Since losing in Afghanistan in 1987, the Russian Empire has been in incredibly rapid retreat, losing its Eastern European satellites and West Asian provinces to independence.

The world is full of danger spots: Pakistan, Iran, North Korea. But when I feel really grim about the prospects for the world, my thoughts turn to China.

Finally, my apologies for spiking your holiday eggnog with a few Sichuan peppercorns.

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