Cebu outsourcing, IT services post high growth in 2014

Cebu’s Information Technology (IT) and IT-enabled service industry remains as one of the province’s vital economic drivers as it continues to fuel growth in 2014 and 2015.

The Philippine Economic Zone Authority (PEZA) noted a sharp increase in the revenues of IT and business process management (BPM) companies within Cebu’s IT parks and centers for the first semester of 2014, according to information from the National Economic Development Authority (NEDA) in Central Visayas.

In its economic report, NEDA 7 said the industry recorded revenues of US$411.3 million from January to June of 2014, and this already represents 70 percent of the total US$608.17 million generated for the whole of 2013.

Cebu is a top choice of IT-BPM companies because it has the ingredients of a successful outsourcing destination such as manpower, infrastructure, great support services, and an abundance of leisure areas, according to Frederick Amores, director of the DOST-ICTO Visayas Cluster 1 field operation office.

“What Cebu needs to do is to develop further its manpower pool and ensure that available infrastructure keeps up with the industry’s development,” he added in an interview.

IT-BPM growth

PEZA also noted the high growth in the number of workers employed by the IT-BPM industry for the first half of 2014, cited the NEDA briefer.

It added that employment in Cebu IT parks and centers was estimated to have grown to 65,303 for the first six months of last year or 25.7 percent more than the number of workers in 2013.

“Since the PEZA data do not include small-scale operations and freelance IT workers…industry players believe that actual figures would be much higher than what is reported,” NEDA 7 cited.

According to NEDA, the entry of new players, such as EXL, UHG, Cognizant, Manulife, and QBE, also reflects the dynamism of the industry.

Industry expansion

Industry growth was also seen in the formation of startups and small IT businesses, as well as acquisitions and expansions by big players.

The report cited the acquisition of Stream Global Services by Convergys, Aegis People Support by Teleperformance, and the expansion of Accenture, Qualfon, and ePerformax.

NEDA 7 said the companies continue to hire workers, setting up recruitment hubs in strategic locations.

The industry continues to exhibit a stellar performance in 2015, with some companies reporting 25 to 30 percent increase in sales, it added.

Amores believes that aside from Cebu City, which ranked eighth for the third straight year in the 2015 Tholons International Top 100 Outsourcing Destinations Report, Mandaue and Lapu-Lapu are ripe for IT-BPM expansion especially with the ongoing infrastructure development in these cities.