Drop in BPO investments temporary

CEBU, Philippines - Cebu Investments and Promotions Center managing director Joel Mari S. Yu advised building developers to just hang-on, amid the declining inquiries for new Business Process Outsourcing (BPO) investments in Cebu, saying that the slowdown is temporary.

Yu said inquiries for BPO-ready building spaces will recover in the next few months.

“They [building developers] will have to wait for a while. They are doing the right thing in preparing the infrastructure,” Yu said commenting on the glut of building space developed in Cebu for BPO companies.

He said Cebu is now ready to accommodate new BPO investors in fact it now has more building capacity over the demand, however, developers must understand that the slowdown in office space take-up is a short-lived reaction to the global financial crisis and everything will soon pick up to pace.

“BPO is not a fad. It is here to stay. Companies around the world are now learning to cut cost, and the best way to do it, is to go offshore,” Yu said.

Recently, RobinLand Inc. opened up a new BPO building with a total capacity of 4,000 seats at the Mandaue North Reclamation Area, which is one of the few buildings that had been opened in Cebu in the last few months, to accommodate new and expanding BPO companies here.

According to Yu, the vacant BPO building offices being prepared by the developers will be filled, once the economy will settle and investors start to pursue their plans, which had been delayed due to the global crisis.

For CIPC alone, Yu said the center has experienced a slowdown of inquiries for BPO investments in the last few months.

“We received not as much inquiries now, for BPO investments in Cebu, unlike in the past,” Yu said.

He said there is a significant reduction of BPO investment inquiries for Cebu. If in the past CIPC entertains investor for BPO once or twice a week. This time, it is already good if there’s an inquiry or two in a month.

But this development he said should not discourage developers in pursuing their plans to build more BPO-ready buildings in Cebu. “This is just temporary,” Yu reiterated.

He said it is good for Cebu that the private sector, or the building developers immediately responded to the call of providing building infrastructure to accommodate the BPO –related investments. Although, this development is temporary intervened by the global financial turbulence, he stressed.

In Asiatown IT Park for instance, which is the largest cyber park in Cebu, there are a number of buildings that had been built in the last few months. Yu believes these buildings will be filled up soon.

Newly constructed TG Universal (TGU) building at the Cebu Asia Town IT Park reported an “encouraging” performance for tenants’ take up despite the projected slowdown of investments.

In just 20 months or nearly two-years of construction, TGU a 16-story IT building is now 60 percent occupied with not only BPO tenants, but also corporate accounts, such as insurance, banking, among others.

The building, developed by Business Ventures Corporation, the developer of Sykes building in Mabolo area, spent more than P700 million for the construction of the state-of-the-art IT building.

In an interview with Business Ventures Corporation operations vice president Charles Ong, he said that the company is now talking with big BPO players that have expressed interest to locate in the building. Ong however, refused to divulge the identity of these companies.