Iloilo, the country’s number 3 New Wave City, is running out of space for Business Process Outsourcing (BPO) locators. At present, it hosts a dozen and the number is still going up to 14 in 2010.

“We have no more developed sites for BPOs,” Iloilo Federation for Information Technology (IFIT) Acting Chairman Jessraf S. Palmares confirmed during last week’s Commission on Information and Communications Technology (CICT) Convergence 2009 at Sarabia Manor Hotel, Iloilo City. “The four buildings which BPOs currently use are malls whose top floors had been converted into cyberparks.”

The mall owners had no retail takers for their commercial spaces, so the call centers managed to set up shop in the areas. But it was not the way to go. “We don’t have problems with telecom or power infrastructure,” he stressed. “We have problems with the attitude of local investors. They keep on saying: If there’s a locator, we will build.”

Next year, a couple of big new BPOs are slated to start doing business in Iloilo. American BPO, Transcom, with 1,000 seats expandable to 2,000, commences operations in January. Mexican firm Qualfon, with 1,000 seats, starts operating in the second quarter of 2010. This will bring the combined capacity of the city’s BPOs to 7,000-8,000 seats.

However, “Iloilo has run out of space,” the IFIT chairman reiterated. “We are lobbying with the private sector to convert empty lots. Plans for a 6-story building in the Iloilo IT park has been mothballed for the past 2 years but there’s 8 hectares within the city which could be converted into a cyberpark. For the past 3 years, Megaworld has also declared they will start developing a 50-hectare Central Business District (CBD) in the old airport.”

The local offshoring and outsourcing (O&O) industry hauled in $7-billion revenue last year. In 2010, the sector targets to corner 10 percent of the global market. However, to achieve this, it needs to hire 1 million new employees.

Hence, the CICT thrust to encourage growth in the IT business in the top 10 next wave cities in the country – Iloilo, Metro Laguna, Metro Cavite, Davao, Bacolod, Pampanga Central, Bulacan Central, Cagayan de Oro, Bulacan South, and Lipa.

“While Filipino talent was a positive factor in making us a preferred O&O destination, the focus on building in the NCR areas has limited the universe for human resources,” according to Bayan Telecommunications Inc.’s Vice President for Business Chito Franco. Bayan hosted the Iloilo leg of Convergence 2009. “We believe in Iloilo’s capability to develop talent. We’ll support the city’s telecom infrastructure needs so it can connect to other regions and to the rest of the world.”

Indeed, “The primary factor for growth is talent,” noted Business Process Association of the Philippines (BPAP) Executive Director Atty. Ma. Jamea S. Garcia. Ironically, while 80 percent of the country’s BPO workforce is in Metro Manila, the metropolis only produces 20 percent of the IT graduates nationwide. “All BPO activities in the Philippines are concentrated in Metro Manila. In India, they are dispersed. We are encouraging BPOs here to do the same. We want to bring the work where the talent is.”

The main draw of Iloilo is its human resources, Palmares confirmed. The city of 1 million turns out 20,000 graduates per year, of which 5,000 are IT graduates. “Iloilo is the center of education in the Visayas. We have 8 universities, so students from Negros and as far as Mindanao, migrate here. They fly in direct and prefer to study here instead of studying in Manila to save on cost. That’s also why even the BPO locators in Bacolod put up job fairs here. They are sourcing their manpower in Iloilo.”

“We want to be the conduit between business and academe,” he continued.

But they have a lot of things to do. “We need more IT graduates. The growth of our enrollees in IT and IT- related courses average 12 percent, from 3,000 to 5,000 per year.
We need to re-do the basic courses, develop training programs and certifications with BPAP. We also want to improve the competency of graduates in web management and web development. The hiring rate for BPOs is only 5 per cent of graduates.”

It was only four years ago that BPOs started locating in Iloilo. Callbox and e-Ventus were the first to come. Now the dozen BPOs in the city have a combined capacity for 5,000 seats, catering mostly to American clients. Some 30 percent of them focused on the non-voice business, medical transcriptions, legal transcriptions and software development.

“Definitely, we need to set aside political squabbles, collaborate with the local government and the private sector to identify and develop IT parks in Iloilo,” the IFIT Chairman concluded.