These problems, as well as concerns over software piracy, made it harder to attract venture capital into software and IT businesses here, executives said at the Software Innovations Philippines conference.
Christopher Beshouri, associate principal of consulting firm McKinsey and Co., said the country could be a major player in the $300-billion global IT industry.
"The Philippines is already a player and aspires to greatness in a market that could be substantial," he said, noting that the country enjoyed a reputation for providing skilled labor at low costs.
"They come to the Philippines because of cost but they stay and continue to do business here because of quality," said Fermin Taruc, president of the Philippine Software Industry Association.
However, the executives warned that government targets of getting 10 percent of the world’s software and IT market by 2010 would prove very difficult, considering that the Philippines only has two to three percent of the market today.
Among the chief problems was a lack of trained people, with many Filipino technicians being hired to work in Singapore, Malaysia or Australia barely a year after graduating, said Ditas Formoso, president of the IT Association of the Philippines.
"The biggest problem is supply (of manpower), not demand," said Socio-economic Planning Secretary Romulo Neri.
Despite this, Neri said he saw no firm linkages forged between local universities and the IT industry to produce the necessary graduates.
Oliver Roll, general manager of Microsoft Asia-Pacific, remarked that in this country, 70 percent of software was pirated and unless the government cracked down on this, start-up software companies would be worried about coming here.
Beshouri warned that the Philippines also suffered from a perception of being a high-risk country despite Neri’s arguments that coup plots and political squabbling did not affect the IT industry.
Beshouri also warned that the Philippines faced stiff competition from other Asian and East European countries that were making an integrated effort to promote their IT industries.
Industry leaders said the country exported $200 million worth of software annually.— AFP