$250M from new BPOs

The next batch of next-wave cities for the information technology-business process outsourcing (IT-BPO) industry could add another $150 million to $250 million worth of revenues for the Philippines.

This was the estimate given by Dan Reyes, chairman of the IT-Business Process Association of the Philippines (IBPAP), as the group grooms an additional list of 10 cities ideal for IT-BPO locations. The list would be released in the first quarter of 2016, as part of the new roadmap for the industry.

Reyes said IBPAP has so far scoured a number of provinces from all over the country.

In Luzon alone, provinces such as Bataan, Batangas, Quezon and Bicol are where these next-wave cities would be plucked out from, based on a set of criteria conducive for IT-BPO investments.

These criteria include availability of human resources, the ecosystem in terms of security and safety and infrastructure.

Reyes said each city is estimated to initially employ at least 1,000 full-time employees (FTEs) in a year. Each FTE is expected to generate $15,000 to $25,000 revenues per year, depending on the nature of the work done. That does not include the multiplier effect on the economy of these revenues.

Reyes cited an example where just one BPO company started with 300 FTEs in Baguio, a next-wave city in 2004. At present, Baguio has a total of 20,000 FTEs working for various BPOs.

“It all depends on the capacity of a city. There are cities which have more (graduates) so that city would attract not just one or two players,” Reyes said.

Each city could have a niche BPO job, depending on the number of graduates. Thus, if a city graduates more nurses, health care information management is ideal.

A city with a lot of accounting graduates would be ideal for BPOs in finance and accounting.”That is why we are doing a resource mapping. It identifies the baseline of what kind of graduates in a city. The objective is to match supply and demand,” Reyes said.

The current list of next-wave cities are Baguio City, Davao City, Dumaguete City, Iloilo City, Lipa City, Metro Bulacan, Metro Cavite, Metro Laguna, Metro Naga and Metro Rizal.

The IT-BPO industry is expected to end the year with 1.2 million workers, just 100,000 shy of next year’s goal of hitting 1.3 million.

The industry is adding another 170,000 workers this year supported by the expansion of existing and establishment of new BPO companies.