BA, Metlife eye IT investments in RP

In response to the government's effort to attract investors into the country's information technology industry, two large American companies are planning to invest in the country, namely Bank of America and the New York-based Metropolitan Life Insurance Corp. (MetLife).

Trade and Industry Secretary Manuel Roxas II said BA is looking to invest in countries outside India where it has already invested in software services companies.

Roxas said BA's direct investment group, BA Equity Partners, has a private equity portfolio of $4 billion and annual new investments of $1.5 billion. It has allocated $80 million for investments in technical services and products companies in Asia but much of this amount has so far gone to India.

Roxas said BA has expressed confidence that the demand for high-quality and low-cost IT services would continue to grow exponentially. While India has been attractive as an offshore outsourcing model, he said BA considers the Philippines as the best country in Asia to follow India's example.

"We have a very well-educated core of IT professionals and telecommunications infrastructure and government support are now here," Roxas said. "The country has all the elements required to compete successfully in the IT sector."

Aside from BA, Metlife has also signed an agreement with Eastwood City Cyberpark to locate its Philippine base of operations in the country's first IT park. The agreement was signed by Metlife and Eastwood during the San Francisco leg of the recently-concluded eight-day IT mission to the US.

Metlife is the largest life insurer in North America and also provides non-medical health, property and casualty insurance as well as pension plan services and investment services to individuals, small businesses, government entities, non-profit organizations and corporations.

In addition to BA and Netlife, several IT firms have also responded positively to the IT mission, including America On Line (AOL) which announced that it is centralizing its support services in the United Kingdom, Australia and Hong Kong to its facility at the Clark Special Economic Zone.

Roxas met with AOL international vice president for planning and operations Mike Ritonia who cited cost effective and quality labor as the main reasons for the company's continued presence in the Philippines. Ritonia said cost-effective labor was the biggest boost to AOL since labor accounts for almost 70 percent of the company's total operating cost.

Government has been aggressively promoting the Philippines as an IT hub, sending various IT missions to developed countries where IT companies are on the lookout for services outsourcing and locations for their backroom operations.

Last year, the Board of Investments headed a mission to Japan which led to the doubling of Japanese companies with backroom operations for such shared services as accounting, mail services, designing and even transaction processing.

The Philippines is already host to a number of prominent backroom operations such as the 600-man workforce employed by AOL to operate its e-mail response system from the Clark Ecozone. This staff answers e-mails for AOL from all over the globe on a 24-hour basis.

Another prominent locator is Arthur Andersen Consulting which also employs about 700 programmers and computer professionals to handle its development and software customization operations. Companies such as Caltex and Procter & Gamble have Philippines-based staff that handle their accounting services and transaction processing.