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Cebu outsourcing industry faces competition from emerging sites

Although Cebu is currently among the top outsourcing destinations in the world, it stands to lose to other emerging sites like Iloilo and Davao if it becomes complacent, a top economist warned business leaders.

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Although Cebu is currently among the top outsourcing destinations in the world, it stands to lose to other emerging sites like Iloilo and Davao if it becomes complacent.

“If you don’t improve your infrastructure, if your traffic situation becomes as bad as Manila, there are other places that will appeal to the business process outsourcing (BPO) and knowledge process outsourcing (KPO) sectors,” said economist Bernardo Villegas in last Friday’s Mandaue Business Summit at the Oakridge Pavillion in Mandaue City.

Aside from Iloilo and Davao, the cities of Dumaguete and Cagayan de Oro show potential for the IT-BPO industry, he said. Cebu placed eighth in the 2015 Tholons International Top 100 Outsourcing Destinations Report, keeping its rank for the third straight year. The only other Philippine outsourcing site in the top 10 was the National Capital Region (NCR).

Villegas, who talked about the positive prospects for the Philippine economy in the next 20 years during the Mandaue Business Summit 2015, said IT-BPO was one of the country’s main engines of growth.

Outsourcing edge

He added that when it comes to this industry, the country’s edge is its young, educated, English-speaking population.

“Not only that, they speak the correct English with the correct accent and the right mood,” he pointed out, citing that Indians by contrast are argumentative.

Although voice services still hold the biggest share of the pie in the outsourcing industry, it registers the lowest growth compared to knowledge processing or health management, Villegas said.

“More and more, it’s going to KPO. You know why? Millennials don’t depend on voice for info,” he added, telling members of the Mandaue Chamber of Commerce and Industry (MCCI) who are into outsourcing that they should start providing accounting, architectural design, and legal documentation services to the rest of the world.

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By Marlen Limpag

Marlen is the editor of MyCebu.ph and co-founder of Cebu-based journalism startup InnoPub Media.