Cebu still a preferred outsourcing hub

CEBU, Philippines —  Cebu remains a preferred outsourcing hub despite struggling to regain a Top 10 spot in the Tholons’ Super Cities survey for the most attractive global outsourcing destinations, international realtor Colliers said yesterday.

In the latest Tholons survey, Cebu ranked 11th from 12th in 2017. In 2016, Cebu ranked 8th.

"Despite this, the city’s improved ranking in the latest global poll indicates that Cebu remains a preferred hub for outsourcing destinations and efforts to further enhance the city’s business environment are bearing fruit," the property consultancy firm said in a statement Wednesday.

If Cebu manages to rise up in the ranking, Colliers sees more companies taking up space within Cebu’s established and emerging business districts such as Cebu IT Park, Cebu Business Park, Mactan Newtown and Mandaue.

Among the factors considered by Tholons in its latest poll are talent skills and quality; business catalyst; cost; infrastructure; risk and quality of life; and digital innovation.

Colliers believes that several initiatives by both public and private stakeholders should help improve Cebu’s ranking in future polls. "Done efficiently, these programs should propel Cebu back to the Top 10 of the annual survey of most competitive outsourcing destinations."

“Cebu is no longer just an alternative location for outsourcing firms outside Manila. Over the past few years, we have seen how Cebu has developed on its own as a primary outsourcing hub,” said Dom Fredrick Andaya, Colliers' director for office services. 

“We project a greater influx of outsourcing investments following the completion of the second terminal of Mactan-Cebu International Airport (MCIA), continued upgrading of college graduates’ skills, and further improvement of business registration processes which should entice more firms to set up shop within the city.”

Cebu is among the recipients of the government’s infrastructure push. After the completion of the second terminal of MCIA, other key projects due to be implemented are the Cebu-Cordova bridge; Metro Cebu Expressway; Cebu-Negros Link Bridge; Cebu-Bohol Link Bridge; and the Bus Rapid Transit (BRT) system. Colliers believes that the completion of these projects should boost Cebu’s score under the infrastructure category.

Cebu should benefit from the implementation of the recently enacted Ease of Doing Business law, and hence raise its ranking under the business catalyst category. A simplified business registration and licensing system plays an important role in attracting new businesses. Outside Manila, Cebu remains as a major recipient of foreign investments. The entry of traditional businesses including those engaged in engineering, consultancy, and logistics businesses should result in faster absorption of office. 

While Cebu remains an attractive site for BPOs and providers of customer care support, the entry of major technology locators such as Accenture only proves that Cebu’s outsourcing manpower has the skills required to handle higher-value outsourcing operations.

"As of the first six months of the year, we also recorded knowledge process outsourcing (KPO) companies such as Shearwater Health, Cresco Shared Services, Convergys, Wipro, and Teledirect taking up space and this shows that providers of higher-value outsourcing services will likely cover a greater share to total office space absorption over the next 12 to 24 months,” Andaya added.

Moving forward, Colliers believes fostering an innovative environment for technology start-ups should play a critical role in Cebu’s goal of attracting more outsourcing locators and generating more jobs by 2022. "In our opinion, this also hinges on the reliability of Cebu’s ICT infrastructure and connectivity," the Canadian firm said.