Cagayan de Oro Marks ICT Month as Call Center Capital of Mindanao
Mike Banos
June 05, 2006
The Regional Information Technology and E-Commerce Committee (RITECC) of Region 10 (Northern Mindanao) kicked off its month-long celebration of June as ICT (Information and Communications Technology) Month with a press conference yesterday trumpeting its major accomplishment so far: making Cagayan de Oro the No. 1 ICT Hub in Mindanao.
"We are proud that Region 10 is performing better than expected," said Engr. Elpidio M. Paras, RITECC-X Co-Chair and Director of the 2nd Mindanao ICT Congress scheduled to be held here this coming September. "Cagayan de Oro has three of the 10 call centers in Mindanao with over 800 call center representatives compared to more than 100 for Davao, and we expect this to double by next year."
Although Davao became the first city to attract a contact center (Cyber City) to Mindanao in late 2004, Paras said Cagayan de Oro got a leg up on the competition when President Gloria Arroyo signed Proclamation No. 770 declaring Pueblo de Oro IT park as an ICT ecozone last January 26, 2005.
PEZA Director General Lilia De Lima recently said that the information technology industry, spurred by the booming call center industry, has been the country's fastest growing industry since 1999 and now constitutes around five percent of PEZA-registered investments, with 41 firms as of this month, compared to only 17 in May 2005.
The 10-hectare Pueblo IT Park is the first and only PEZA-registered and proclaimed IT park in Mindanao. It is part of the Pueblo de Oro Township, a self-sustaining 360-hectare mixed use development which includes commercial, residential, and educational institutions built around an 18 hole par 72 championship golf course, 74-room international standard hotel and SM Cagayan de Oro.
Paras expects Link2Support, Inc., the city's first and biggest call center locator in Pueblo de Oro IT Park with 650 call center agents (as of May 31, 2006) to double that complement within the next two months. Arriba Telecontact, Inc., which Paras owns and operates at the Rosario Arcade in Limketkai Center, has 60 call center agents at present and expects to double this number by year end. The third call center, Tradetel Corp., is owned and operated by Philcom Corp. with 20 seats at its local exchange building in Bgy. Carmen.
And the city has plenty of room for more.
"SM has a 1,700 sq.m. space in its Car Park Bldg. which is now under negotiation for a term lease with a call center," said Paul Ferrer, SM Cagayan de Oro Mall Manager, in his welcome remarks to media in the presscon.
"SM is a major stakeholder in the ICT industry and it is part of our overall strategy to attract commerce and tourism," Ferrer said, citing the E-1 e-commerce building in SM's recently opened Mall of Asia in Bay City, Pasig.
Rodolfo L. Meņes, who heads RITECC-X's e-Business cluster, said the owner of a 2,700 sq.m. lot adjoining SM in the Pueblo de Oro IT Park is willing to immediately construct to house a call center locator.
DTI Misamis Oriental listed other areas immediately available for call center operations include the Alwana Business Park, Trinidad Building, A. Lim Bldg., and Fontanosas Bldg.
Meņes, who is vice president and general manager of Pueblo de Oro Development Corporation which operates the Pueblo de Oro IT park, told media attending the presscon the IT park area will soon be doubled to 20-hectares.
"We have taken the first step in the journey of a thousand miles," Meņes said. "We are well on our way to attaining our objective to create employment by recruiting people from Cagayan de Oro and dispersing regional centers away from traditional urban metros like Manila and Cebu."
"The only constraint to our rate of growth is the availability of qualified manpower," Paras said. "With the industry expected to double year after year, this will be a major constraint unless we find ways to increase the present 10% passing rate of applicants for call center representatives in the region."
Juanito Demetrio, CHED-X Education Supervisor II, who represented E-Learning Cluster Head Dir. Paderanga in the presscon, disclosed that CHED and TESDA are working closely together to address this concern. Already, he cited local schools such as Informatics Inc. and the Asian College of Science and Technology (Acsat) are offering call center preparatory courses.
In a similar initiative, Capitol University and the Cagayan de Oro Chamber of Commerce & Industry Foundation Inc. jointly hosted the first Cagayan de Oro Academe-Industry Forum earlier this week to discuss the major issues between the academe and the industry, including a stronger internship process for students in partner industries.
"Industries within Cagayan de Oro City and Northern Mindanao area are experiencing growth and this means an increasing demand for graduates," said chamber president Ruben Vegafria. "This is especially true for ICT and ICT-related products and services. That is why we need to work with the academe."
However, his colleagues in RITECC-X share Paras' concerns the country has to shape up to maintain its competitive edge over similar up-and-coming competitors like China, Malaysia and Indonesia by implementing upgrades and improvements now in infrastructure and labor quality to attract more call center investments to the country.
The ICT Profile provided by the DTI-Misamis Oriental office describes the ICT infrastructure in Cagayan de Oro as being traversed by two major backbones: PLDT's 10 gbps Digital Fiber Optic Backbone (DFOB) which is directly connected to five (5) international submarine cable systems in the Asia Pacific and Southeast Asian region with onward connections to North America, the Middle East and Western Europe, supported by an extensive Digital Microwave Backbone; and Telicphil's 10 gbps National Digital Transmission Network, a 2,762 kms. fiber optic backbone facility that originates from Cuyapo, Isabela in the north and terminates in Cagayan de Oro in the south.
"Connectivity is important in the call center industry," said Engr. Teodoro Buenavista, NTC-X regional director and member of the RITECC-X e-cluster group.
Buenavista stressed it is not only connectivity in hardware but between the local players that the local call center industry needs to maintain an edge over the competition. He cited the 1st TPG Friendship Games scheduled later this year to increase fellowship and interaction between local players as one such initiative.
"RITECC-X will continue to push public-private partnership in three areas of development : policy, implementation and advocacy," Buenavista said.
The Department of Trade and Industry says the Philippines is fast catching up with India as the "Call Center Capital of Asia" due to the increasing costs of doing business in G-7 countries.
A study conducted last year by research firm Frost and Sullivan, reveals that the Philippine call center industry now ranks ninth in the Asian region with $9.8-million invested in hardware and software last year, trailing its English-speaking rivals: India ($21 million) and Singapore ($20.3 million). From only a handful of call centers at the start of 2000, there is now an estimated 105 call center companies in the country, or double the figure from 2003. The Philippines is expected to be spending more in the next few years.
Besides manpower, another concern for the burgeoning local industry is the rising salary scale as the volume of business increases and the entry of big players resulting to consolidations through mergers and acquisitions. Call centers have been prime targets for consolidation as they buy or merge with other ICT-related firms.
"Our starting salaries for call center representatives are 30 percent lower than those in Manila and Cebu," Paras said. However, he said experienced CSRs from the metropolitan areas have been coming back to Cagayan de Oro due to its lower cost of living and to be with their families.
"There is no social displacement inherent with people working far from their families so our CSRs have higher morale," Paras said. Besides, he said the lower costs of living here means the workers net even more than their counterparts in the metros.
"No other industry can match that right now," Paras said.
Just last week, Philippine Long Distance Telephone Co. (PLDT) said its wholly owned subsidiary, ePLDT, Inc., was acquiring BPO firm SPI Technologies, Inc. and all its subsidiaries for an undisclosed amount.
SPI is the world's ninth biggest in the transcription company with 6,500-employees operating in 23 locations worldwide serving 150 company clients with a variety of services including content editorial and production, litigation support coding and electronic data discovery, medical transcription, database structuring and management and transaction processing.
Earlier January, PeopleSupport completed the acquisition of California- based Rapid Rapidtext, Inc. and its subsidiary, The Transcription Co., with most operations to be moved to the Philippines.
"We are proud that Region 10 is performing better than expected," said Engr. Elpidio M. Paras, RITECC-X Co-Chair and Director of the 2nd Mindanao ICT Congress scheduled to be held here this coming September. "Cagayan de Oro has three of the 10 call centers in Mindanao with over 800 call center representatives compared to more than 100 for Davao, and we expect this to double by next year."
Although Davao became the first city to attract a contact center (Cyber City) to Mindanao in late 2004, Paras said Cagayan de Oro got a leg up on the competition when President Gloria Arroyo signed Proclamation No. 770 declaring Pueblo de Oro IT park as an ICT ecozone last January 26, 2005.
PEZA Director General Lilia De Lima recently said that the information technology industry, spurred by the booming call center industry, has been the country's fastest growing industry since 1999 and now constitutes around five percent of PEZA-registered investments, with 41 firms as of this month, compared to only 17 in May 2005.
The 10-hectare Pueblo IT Park is the first and only PEZA-registered and proclaimed IT park in Mindanao. It is part of the Pueblo de Oro Township, a self-sustaining 360-hectare mixed use development which includes commercial, residential, and educational institutions built around an 18 hole par 72 championship golf course, 74-room international standard hotel and SM Cagayan de Oro.
Paras expects Link2Support, Inc., the city's first and biggest call center locator in Pueblo de Oro IT Park with 650 call center agents (as of May 31, 2006) to double that complement within the next two months. Arriba Telecontact, Inc., which Paras owns and operates at the Rosario Arcade in Limketkai Center, has 60 call center agents at present and expects to double this number by year end. The third call center, Tradetel Corp., is owned and operated by Philcom Corp. with 20 seats at its local exchange building in Bgy. Carmen.
And the city has plenty of room for more.
"SM has a 1,700 sq.m. space in its Car Park Bldg. which is now under negotiation for a term lease with a call center," said Paul Ferrer, SM Cagayan de Oro Mall Manager, in his welcome remarks to media in the presscon.
"SM is a major stakeholder in the ICT industry and it is part of our overall strategy to attract commerce and tourism," Ferrer said, citing the E-1 e-commerce building in SM's recently opened Mall of Asia in Bay City, Pasig.
Rodolfo L. Meņes, who heads RITECC-X's e-Business cluster, said the owner of a 2,700 sq.m. lot adjoining SM in the Pueblo de Oro IT Park is willing to immediately construct to house a call center locator.
DTI Misamis Oriental listed other areas immediately available for call center operations include the Alwana Business Park, Trinidad Building, A. Lim Bldg., and Fontanosas Bldg.
Meņes, who is vice president and general manager of Pueblo de Oro Development Corporation which operates the Pueblo de Oro IT park, told media attending the presscon the IT park area will soon be doubled to 20-hectares.
"We have taken the first step in the journey of a thousand miles," Meņes said. "We are well on our way to attaining our objective to create employment by recruiting people from Cagayan de Oro and dispersing regional centers away from traditional urban metros like Manila and Cebu."
"The only constraint to our rate of growth is the availability of qualified manpower," Paras said. "With the industry expected to double year after year, this will be a major constraint unless we find ways to increase the present 10% passing rate of applicants for call center representatives in the region."
Juanito Demetrio, CHED-X Education Supervisor II, who represented E-Learning Cluster Head Dir. Paderanga in the presscon, disclosed that CHED and TESDA are working closely together to address this concern. Already, he cited local schools such as Informatics Inc. and the Asian College of Science and Technology (Acsat) are offering call center preparatory courses.
In a similar initiative, Capitol University and the Cagayan de Oro Chamber of Commerce & Industry Foundation Inc. jointly hosted the first Cagayan de Oro Academe-Industry Forum earlier this week to discuss the major issues between the academe and the industry, including a stronger internship process for students in partner industries.
"Industries within Cagayan de Oro City and Northern Mindanao area are experiencing growth and this means an increasing demand for graduates," said chamber president Ruben Vegafria. "This is especially true for ICT and ICT-related products and services. That is why we need to work with the academe."
However, his colleagues in RITECC-X share Paras' concerns the country has to shape up to maintain its competitive edge over similar up-and-coming competitors like China, Malaysia and Indonesia by implementing upgrades and improvements now in infrastructure and labor quality to attract more call center investments to the country.
The ICT Profile provided by the DTI-Misamis Oriental office describes the ICT infrastructure in Cagayan de Oro as being traversed by two major backbones: PLDT's 10 gbps Digital Fiber Optic Backbone (DFOB) which is directly connected to five (5) international submarine cable systems in the Asia Pacific and Southeast Asian region with onward connections to North America, the Middle East and Western Europe, supported by an extensive Digital Microwave Backbone; and Telicphil's 10 gbps National Digital Transmission Network, a 2,762 kms. fiber optic backbone facility that originates from Cuyapo, Isabela in the north and terminates in Cagayan de Oro in the south.
"Connectivity is important in the call center industry," said Engr. Teodoro Buenavista, NTC-X regional director and member of the RITECC-X e-cluster group.
Buenavista stressed it is not only connectivity in hardware but between the local players that the local call center industry needs to maintain an edge over the competition. He cited the 1st TPG Friendship Games scheduled later this year to increase fellowship and interaction between local players as one such initiative.
"RITECC-X will continue to push public-private partnership in three areas of development : policy, implementation and advocacy," Buenavista said.
The Department of Trade and Industry says the Philippines is fast catching up with India as the "Call Center Capital of Asia" due to the increasing costs of doing business in G-7 countries.
A study conducted last year by research firm Frost and Sullivan, reveals that the Philippine call center industry now ranks ninth in the Asian region with $9.8-million invested in hardware and software last year, trailing its English-speaking rivals: India ($21 million) and Singapore ($20.3 million). From only a handful of call centers at the start of 2000, there is now an estimated 105 call center companies in the country, or double the figure from 2003. The Philippines is expected to be spending more in the next few years.
Besides manpower, another concern for the burgeoning local industry is the rising salary scale as the volume of business increases and the entry of big players resulting to consolidations through mergers and acquisitions. Call centers have been prime targets for consolidation as they buy or merge with other ICT-related firms.
"Our starting salaries for call center representatives are 30 percent lower than those in Manila and Cebu," Paras said. However, he said experienced CSRs from the metropolitan areas have been coming back to Cagayan de Oro due to its lower cost of living and to be with their families.
"There is no social displacement inherent with people working far from their families so our CSRs have higher morale," Paras said. Besides, he said the lower costs of living here means the workers net even more than their counterparts in the metros.
"No other industry can match that right now," Paras said.
Just last week, Philippine Long Distance Telephone Co. (PLDT) said its wholly owned subsidiary, ePLDT, Inc., was acquiring BPO firm SPI Technologies, Inc. and all its subsidiaries for an undisclosed amount.
SPI is the world's ninth biggest in the transcription company with 6,500-employees operating in 23 locations worldwide serving 150 company clients with a variety of services including content editorial and production, litigation support coding and electronic data discovery, medical transcription, database structuring and management and transaction processing.
Earlier January, PeopleSupport completed the acquisition of California- based Rapid Rapidtext, Inc. and its subsidiary, The Transcription Co., with most operations to be moved to the Philippines.
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