Davao City is the next great place for call centers, BPOs

OUTSIDE of Metro Manila and Metro Cebu, Davao is set to be the biggest location for business process outsourcing (BPO) in the country.

So says David Leechiu, Country head of Jones Lang La Salle, adding that a lot of BPO companies are looking at Davao now as an investment destination.

Jones Lang La Salle services the top BPOs in the Philippines, including 11 of the 12 largest, mainly through site acquisition, brokerage and construction and property management.

Davao and nearby Cagayan de Oro, according to the Business Processing Association of the Philippines (BPAP) and the United States Agency for International Development’s (USAID) Growth of Equity in Mindanao (GEM), are “well on the way to becoming BPO hubs.”

There are six major call centers in Davao: CyberCity, Concentrix (Link2Support which employs several hundred agents), Sutherland, Call Box, Global Connect and Western Wats which recently invested P60 million in its Davao operations. Another 10 smaller call centers are also operating.

From an initial 200 BPO seats, the total seat capacity is now almost 3,000 with 3,000 seats more expected in the next 18 months.

“The Philippine Cyber Corridor Report 2008 has ranked Davao No. 4 among the country’s Top 10 Next Wave Cities. The report also places Davao, along with Iloilo, among the top 31 BPO locations.

One factor that attracts BPOs is the high quality of the Davao workforce, which is estimated to be twice that of Cebu, seven times that of Angeles/Clark, and six times that of Baguio, according to the XMG study cited by a report by BPAP and GEM. This does not include the potential workforce from nearby cities and provinces.

Leechiu also says that the emergence of BPOs has led to the “repatriation” of Davao natives who had migrated to Cebu and Manila. “Since BPO companies opened in Davao, employees have gone back home to jobs that are available there,” he says.

While the Davao BPO employees possess the Filipino trademark patience, flexibility and English-fluency skills, they are said to make for far better salesmen than their Manila counterparts.

According to the BPAP-GEM report, the bumper crop of skilled graduates in the area can be traced to Mindanao’s tertiary level academic institutions that are at par with the rest of the country and concentrated in urban centers that are likely to become BPO locations.

Zamboanga City, the country’s sixth most populous city (population: 750,000), has over 60 universities and colleges. The cities of Iligan and Marawi, just half an hour apart, have a combined student population of 25,000 in their Mindanao State University (MSU) campuses.

“Schools are now tailoring the curriculum to integrate English into the entire academic program, which develops the students’ facility with the language,” says Joji Bian, president of the Philippine Call Center Alliance and owner of an academy, which conducts call center training across Mindanao.

At Iligan’s MSU campus, one of the country’s top technical schools, the Iligan Institute of Technology (IIT), is even collaborating with a Manila-based BPO firm to provide its faculty members with cutting edge software development training. With the influx of more businesses in the city, Davao is currently experiencing a surge in economic growth.

Major telcos have invested a substantial amount of money to provide facilities for BPOs. Six Information Technology parks and buildings now operate in Metro Davao.

The Digital Fiber Optic Network is one of the come-ons for business, along with the Francisco Bangoy International Airport which can accommodate two million passengers a year and has direct flights to Hong Kong, Singapore and Manado, as well as daily flights to Manila, Cebu, Zamboanga and Iloilo.

Leechiu mentions the low crime rate and the Davao City police, which has been consistently chosen the Best Police Office in the country. –Cora Llamas, Manila Times

Business Processing Association of the Philippines