THE information-technology and business-process management (IT-BPM) industry will struggle to grow by 8 percent this year, as firms are having difficulty expanding their operations due to the ban on economic zone development in Metro Manila.
Rey E.
Untal, president of the IT and Business Process Association of the Philippines
(Ibpap), said IT-BPM firms are scrambling for the remaining office spaces in
Metro Manila. President Duterte in June issued Administrative Order 18, which
mandated a moratorium on the processing of applications for economic zones in
the nation’s capital.
As such, the Philippine Economic Zone Authority (Peza) was directed to no longer accept, process or evaluate proposals to put up new economic zones in Metro Manila, resulting in an office space crunch for the IT-BPM industry.
“There is AO 18 that we need to account for. Our concern there is there is very little space to utilize for a substantial annual growth that we typically see,” Untal told reporters on Tuesday.
Citing data from consultancy firms, Untal disclosed available office space in Metro Manila is down to 115,000 to 120,000 square meters, as competition gets tighter due to the influx of online gaming operators.
The IT-BPM industry expanded 420,000 square meters last year, and requires 450,000 square meters this year to accommodate expansions and new operations. With a labor force of 1.23 million workers as of last year, the industry accounts for at least 32 percent of office spaces in the Philippines.
Under its road map, the industry is projected to create 100,000 jobs annually to employ a total of 1.8 million workers by 2022.
Further, it is estimated to generate $38.9 billion by 2022, from $22.9 billion in 2016. Last year, industry revenue improved to between $24 billion and $24.8 billion, from $23.4 billion in 2017, based on records from Ibpap.
As a stopgap, Untal and his group are talking to LGU leaders in Metro Manila cities where there is little to no IT-BPM presence to possibly lobby for their exemption from AO 18.
At the height of the debate over the ban, the Peza requested the Office of the President to exempt nine cities in Metro Manila from the ban. These are Manila, San Juan, Marikina, Las Piñas, Malabon, Caloocan, Pateros, Valenzuela and Navotas.
“If you look at Metro Manila, there are just a few areas that are heavily dense in terms of IT-BPM [operations]. We are looking at Quezon City, we are looking at Makati, Taguig, Pasay, Alabang [and] maybe Ortigas. There are 17 cities in Metro Manila, and there are many cities that do not host IT-BPM operations,” Untal added.
For the meantime, firms will make use of whatever little space is remaining in Metro Manila, according to the Ibpap chief. There are also IT parks, such as Eton Centris in Quezon City, that can still accommodate additional buildings that can be used to house IT-BPM operations.