MANILA, Philippines - Davao City, the Philippines’ largest urban area in Mindanao, is expected to be a viable alternative information technology hub three years from now, a study said.
In a report, research firm XMG said organizations belonging to the business process outsourcing (BPO) industry are expected to lead the development of the area as a robust technology hub.
Citing a study it conducted between January to March 2008, the company said that outsourcing vendors who participated in the survey are very bullish about Davao City, primarily due to the area’s larger population of untapped qualified resources compared to Cebu City in the Visayas.
The study highlighted that competition in Cebu City is nearing saturation as the talent ramp-up continues.
The study also highlighted the population of Davao City as considerably higher than other Tier-2 offshoring cities globally. In the Philippine context, Davao City’s population is 71% higher than Cebu City, 499% larger than Olongapo-Subic City, 333% higher than the Angeles-Clark area, and 340% larger than Baguio City.
“The city’s estimated workforce is twice of Cebu, 9 times of Subic, and 7 times of Clark, and 6 times of Baguio. This has not even taken to account the manpower pool at the nearby cities and provinces of Davao City," the company said.
According to the study, Davao City has various educational institutions annually yielding a higher number of IT and BPO qualified graduates than Subic, Clark, and Baguio by 689%, 278%, and 40% respectively.
Telecom facilities, transportation networks, and public transport systems are already in place in Davao City, the study said. However, XMG indicated there is a need to further improve and modernize these services.
In addition, the existence of a public transport system in Davao City is noteworthy yet still needs improvement in order to expand locators’ recruitment reach and the transportation of people from various points in and out of the city.
The study said the attractiveness of Davao City is greatly affected by the negative perception about the Mindanao region as a whole.
On February 2008, a travel advisory was released by US Consular Affairs warning their citizens on the risk of traveling in Central, Western, and Southern part of Mindanao due to security and safety reasons, which includes terrorism.
XMG researcher Camille Lumbang said that although these travel warnings are empirically grounded from actual hostile incidents in Mindanao, it should be emphasized that these are only isolated incidents from specific areas.
“There is a challenge then to substantiate and prove that such occurrences do not pose a general security threat for Davao City," she said.
Lumbang admitted, however, “there is a crying need for both the government and private sector to act together in improving the overall image of Davao City to attract ICT locators."
Citing a previous study, XMG said Davao City has been upgraded to a level C2 rating from its previous level D standing as the city emerges as a viable site for captive and outsourcing services.
“While there are still a number of geopolitical, geophysical and infrastructure challenges, the large untapped manpower base in Davao City will give its allure and ‘staying power’ as a viable site in the years to come," Lumbang said
The report continues added: “Potential locators in Davao City must have a heightened awareness and should conduct their own formal and internal risks analysis rather than reacting to headlines about specific regions under consideration such as the problems happening in other parts of Mindanao."
Among the emerging alternative offshoring cities cited in the study were Montevideo in Uruguay, Jakarta in Indonesia, and Casablanca in Morocco. It focused on forecasting the global demand for offshoring and outsourcing services and the site optimization of emerging cities. - GMANews.TV
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