|
UNLESS
solid government support backs industry, the outsourcing
and offshoring (O&O) road map would hit bumps and sharp
curves, a researcher from property broker Jones Lang
LaSalle Leechiu Inc. said.
Kathy
Marcelo, JLL Leechiu head of research and consultancy,
cited in particular the scarcity of office space as
companies in the O&O industry push up demand.
“Assuming that Metro Manila still commands 82 percent of
the market share and the office stock will be solely
used by the O&O industry, it will have an estimated
738,000 employees or an estimated office-space
requirement of 5.2 million square meters by 2010,”
Marcelo said.
In her
paper titled, “Economic Insights: Philippines,” Marcelo
estimates that the Metro Manila office market will have
a scarcity of about a million square meters by 2010.
“Additional demand of 600,000 employees or 6.5 million
square meters of office facilities in Metro Manila by
2010 will exert strong upward pressure on wages and
rents,” Marcelo said.
She
added that the only recourse would be to explore cities
outside the metropolis.
However,
“there is no active agency assigned to determine the
expansion areas in the country.”
“There
is also a lack of information on the readiness and
capacity of sites to absorb O&O companies. Because of
this, investors are not fully aware of other potential
areas in the country.”
Marcelo
also disputes the “readiness” of areas that the Business
Processing Association of the
Philippines
(Bpap) cited as “next-wave cities” that could ease the
pressure off Metro Manila.
She said
the readiness of 13 locations in five “next, wave
cities” in the Philippines that the Bpap identified is
disputable because of the lack of a “consistent” power
supply.
“Most
provinces only have one power source, and the industry
needs a consistent supply of this. However, it will take
three to five years to build a new power plant.”
Marcelo
added this is problematic, citing limited budget for
infrastructure by local government units. She noted this
could be addressed if the government can provide
incentives to make these locations attractive to
locators.
“The
government could also provide incentives for developers
that can deliver township projects in areas identified
as next-wave cities,” she said.
Aside
from this, Marcelo also recommends “coordination between
government agencies established to eliminate red tape,”
consistency of incentives for all industry players and
high police visibility.
“The
Bpap has to orchestrate the whole industry to work
efficiently,” Marcelo said.
“However, there are several challenges before the goals
of [its] Road Map 2010 can be achieved.”
According to the road map, the industry aims to have a
worldwide market share of 10 percent, double the current
5-percent slice.
“To
realize this growth, the industry has to grow 40 percent
annually,” Marcelo said, adding this indicates “new
markets must be recognized.”
The O&O
industry, she said, “should also adapt with the rapid
advances in technology, increase its high-value-added
activities and tap new sources such as Japan and South
Korea.” |
