Metro Manila has become the center of the business process outsourcing (BPO) world, an industry expert said at a conference on services exports.

But Raja M. Mitra, who has done studies for the World Bank, said that the growth of the young ICT industry (which includes BPO) needs to be supported with developments in related sectors.

This is to maximize the sector’s positive impact on the Philippine economy and spread income opportunities more or less evenly all over the country.

According to studies, Metro Manila now has more persons employed in the BPO export industry than any other city in the world.

Second only to India as a leading BPO industry center in the past few years, the Philippines has outperformed most countries in terms of BPO growth.

As of 2010, the BPO export sector directly employed 500,000 people in the Philippines compared with 800,000 in India.

If measured in terms of revenue or employment on a per-capita basis, Mitra said, the Philippines has a larger BPO industry than India, he said in his recent presentation titled “The IT-BPO sector and inclusive growth in the Philippines” at the Asian Institute of Management.

Both the Philippines and India have experienced high BPO growth, but as of 2010, the Philippines has overtaken India in the call-center industry in terms of revenue and employees.

However, the Philippines lags behind India and China in IT and software services. Looking forward, the total market for the Philippine IT-BPO sector could reach $50 billion by 2020.

According to Mitra, the local market for Philippine IT-BPO is $5 billion and the potential export is $45 billion by 2020.

Direct employment in the IT-BPO export industry (excluding hardware) reached over 500,000 in 2010.

However, ICT sector’s overall contribution to the economy is substantially larger if it includes not only IT-BPO services but also telecommunications services, media and the electronic hardware sector.

Mitra said overall ICT sector can be partitioned into five broad subsectors: telecommunications, which generates big revenues and has a major impact; broadcasting and media, whose transformations are supported by telecommunications; electronics manufacturing, which is export-driven; and IT software and related services, where BPO voice and nonvoice offerings dominate compared with KPO, or knowledge process outsourcing.

“We will see major changes in these subsectors. We are just seeing the beginning of a fundamental development that will affect other sectors,” Mitra said.

With nurturing, Mitra said, the BPO services sector could take advantage of opportunities and further increase its share of GDP and employment.

Source:http://business.inquirer.net/3559/metro-manila-on-top-of-bpo-world-expert-says

Property giant Ayala Land Inc. plans to build more business process outsourcing (BPO) hubs this year, boosting prospects for recurring office rental earnings that complement its shopping mall and residential businesses.

“Because of the recovery that we’re seeing, we have revived our plans for BPO expansion and we’re going to be launching this year another 120,000-130,000 square meters of new BPO space mostly in provincial locations,” ALI investor relations officer Alfie Reyes said in a briefing on Friday.

So far this year, ALI has launched BPO hubs in Iloilo and Baguio, offering 18,000 sq.m. in combined additional BPO space. With the recent pick-up in demand from BPO firms, however, the office property segment has been revitalized.

In the pipeline this year are new hubs in five more provincial locations and a couple more in Metro Manila, Reyes said.

In the first three months of this year, ALI’s office business segment posted a 3-percent rise in revenue to P466 million, with the expansion of the BPO office portfolio to a total of 258,001 sq.m. in gross leasable space as of end-March.

First-quarter office revenue was also boosted by higher average BPO lease rates, which rose by 11 percent to an average of P584 per square meter a month and improved occupancy levels of 66 percent against 50 percent a year ago.

The strategy on BPO is in line with the Ayala group’s expansion in all other property segments, particularly the residential business.

For this year, 15 to 20 new residential property projects are expected to be launched, Reyes said.

Because of the strong demand for residential property, ALI expects to be able to raise its selling prices this year by an average of 10-15 percent.

Reyes said ALI was upbeat on business prospects for this year. “Based on what we see, this year should be better than last year,” he said.

ALI posted a 32-percent profit growth in the first quarter to P1.2 billion from year-ago level.

Consolidated revenue for the first quarter reached P9.22 billion, up by 24 percent over a year ago. This was due to higher real estate revenue.

Source:http://business.inquirer.net/money/topstories/view/20100509-269032/ALI-eyes-more-BPO-hubs