The IT and BPM industry brings in P9.6 billion in new money to Cebu City every month. By the end of 2019, that figure will balloon to P20 billion monthly, even by low estimates, said Cebu City consultant Joel Mari Yu.
Yu gave an overview of IT/BPM in Cebu City in yesterday’s Transformation Summit at the Marco Polo Plaza Cebu. Yu led the now defunct Cebu Investment Promotions Center, which has been credited with bringing in investments to the city.
“The numbers I’m showing you are modest assumptions based on first class data gathered from primary sources,” Yu prefaced his presentation.
Direct, indirect employment
The average salary of an IT employee in Cebu City is P30,000 a month, growing at 10% a year. From just 1 company in 2004, there are now 456 IT/BPM companies in Cebu City.
Assuming a 1:1 ratio between salaries and wages and operating expense, P7.6 billion in new money flows into Cebu monthly, Yu said. This is based on an employee count of 130,260 in 2016. The figure is also limited to Cebu City and does not take into account locations like Mandaue City and Lapu-Lapu City.
With a low estimate of P10,000 monthly rate for indirect employment, Cebu City gets P2 billion from indirect employment.
“Combine the 2, it’s 9.6 billion that flows into Cebu every month. Minimum. That’s on the assumption of 130,000 workers. There could be much more,” he said.
By targeting 200,000 employees in 2019, Cebu City will be getting P20 billion monthly.
New money coming in
“This is new money coming in monthly,” Yu said. “When Shoemart makes money, they sell to Juan to pay Pedro. It’s recirculated money. But when you bring in a foreign investor, the money is remitted from abroad every month. Every single month they remit money to pay for their expenses, for their operations in this country.”
Today, Yu said, Cebu City gets P464 million in monthly rental income from IT/BPM companies. By 2019, that will grow to at least P700 million monthly.
Hitting the target of 200,000 IT/BPM employees in Cebu City by end of 2019 is achievable, Yu said. It will not even entail promotions and marketing.
Fix aggravating circumstances
“It is a matter of Cebu City dealing with aggravating circumstances facing the IT/BPM industry,” Yu said.
These key problems are transportation and traffic, security and safety, housing, and the need for a one-stop shop for processing employment papers. By dealing with these problems, Cebu City will get even more investments and locators.
“I do not like the former mayor because he was one of the bigger reasons why the CIPC closed shop,” Yu said to end his talk. “But he said something and I would like to end by quoting him. Can we do this? Together we can make it happen.”