IBPAP pushes approval of pending ecozone applications in Metro Manila

MANILA, Philippines — The Information Technology and Business Process Association of the Philippines (IBPAP) is pushing for the proclamation of pending ecozone applications in Metro Manila with the Office of the President (OP), warning of as much as 50,000 foregone potential new jobs from a shortage in ecozone space for information technology and business process management (IT-BPM) firms amid a moratorium on processing of ecozone applications in the country’s capital.

In a statement, IBPAP said the group is requesting to facilitate the proclamation of pending applications for ecozones in Metro Manila endorsed by the Philippine Economic Zone Authority (PEZA) with the OP.

A total of 22 applications for ecozone developments in Metro Manila are awaiting presidential proclamation, while there are 131 applications for ecozone developments in Metro Manila approved by PEZA, but yet to be endorsed to the OP.

The statement was issued by IBPAP as the OP last month issued Administrative Order (AO) 18 which directed PEZA to stop accepting, processing and evaluating applications for the establishment of ecozones in Metro Manila to promote countryside development.

While the IT-BPM industry is supportive of the government’s efforts to boost countryside development, IBPAP said the moratorium on processing of ecozone applications in Metro Manila poses near to medium-term challenges.

In particular, it said potential jobs to be created could not be realized due to a shortage in available space for IT-BPM firms in Metro Manila.

The group said there are only 126,940 square meters (sqm) of PEZA-accredited office space available versus the forecasted annual demand of 450,000 sqm.

“This shortage in PEZA-registered IT-BPM space in Metro Manila could result in a loss of as much as 40,000 to 50,000 potential new jobs in the industry and may further result to a significant increase in rental rates thereby affecting the competitiveness of the Philippines for future expansions,” IBPAP said.

In addition, the group said there is challenge in terms of talent availability in the countryside.

“While some IT-BPM has been successful in expanding to provinces, these are primarily driven by voice services. However, as the industry pivots to digital, talent availability for mid to high complexity work has predominantly limited to metro cities such as Manila and Cebu,” IBPAP said.

For its part, the Contact Center Association of the Philippines (CCAP) said the moratorium also raises some concerns for its members.

“Our position in CCAP over the years and it continues to be the same today is that, for us to be able to drive jobs in the country, particularly in the countryside and in the provinces, we do need hub and spoke,” CCAP chairman Benedict Hernandez said.

“If you are new Fortune 1000 company, typically if they want to invest in the Philippines for the first time, they would first think about going to Manila. There is rarely any new investor who jumps in the province. Their first safety comfort is to see how this works in the established Metro Manila as their location,” he said.

To address these concerns, CCAP sees the need for dialogue between the industry and government.