JANUARY TO MAY PERIOD: BPO EMPLOYMENT GROWTH UP 19%
Hiring growth for the BPO industry in Metro Cebu rose by about 20% from January to May of 2019 according to Cebu jobs site, Mynimo.com. For the entirety of Cebu province, company hiring growth increased by 16%. Despite the increase in BPO hiring, Cebu IT BPM Organization (CIB.O) managing director Wilfredo Sa-a Jr. believes that artificial intelligence (AI) and automation may temper the growth of the sector in the future. The non-voice sector may now be the new direction of the industry. In response to this, BPO companies are now assisting their employees in gaining the necessary skills needed to keep up with the competitive market.
The hiring growth of the BPO sector shows the attractiveness of the city as an outsourcing hub for locators expanding outside of Metro Manila. As the BPO industry continues to thrive, higher-value Knowledge Process Outsourcing (KPO) operators are also starting to grow. These companies offer higher-value services such as software engineering and accounting. The growth of the KPO segment could potentially lead to an increase in demand for higher quality buildings. Upcoming office buildings like Cebu Exchange, One Montage, and JEG Tower @ One Acacia are all Leadership in Energy and Environmental Design (LEED) certified and are likely to capture the demand from discerning occupants. LEED certified projects attract higher value tenants due to a more conducive work space.
CLI NET INCOME UP 41% IN FIRST QUARTER
Cebu Landmasters Inc. (CLI) is expected to reach its net income target of P2.6 billion and consolidated revenue goal of P8.4 billion in 2019. Net income hit P702 million from P499 million in Q1 2018 while consolidated revenues increased to P1.87 billion from P1.264 in the same quarter last year. Cebu represented 58% of total revenues. This was mainly driven by the mid-market brand, Garden Series. According to CLI, 69,770 sq meters of gross leasable area (GLA) is currently under construction with 5,105 sq meters expected to be completed in 2019.
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Outside Metro Manila, Cebu is the largest vertical residential hotspot with close to 39,000 condominium units as of the end of 2018. From 2019 to 2021 we see the completion of 2,100 new units annually. The rise in demand for higher-priced residential projects is seen in CLI’s revenue for Q1 2019 as it was mainly driven by their mid-market brand, Garden Series. Moreover, in 2018 Colliers also recorded mid-income and upscale projects cornering more than 60% and 70% of take-up and launches respectively in Cebu province. Colliers recommends developers to continue launching more mid-income and higher priced residential projects to capture the pent-up demand.
SWEDISH FIRMS KEEN ON INVESTING IN PHILIPPINES
A report released by Business Sweden noted that Swedish companies are interested on investing in the Philippines. According to the report entitled “Philippines - Open for Business” the companies are keen on manufacturing, retail and e-commerce, and information technology-business process management (IT-BPM) sectors. The manufacturing segment is considered to be a key investment sector because of its multiplier effects to the economy. Swedish companies also see this as an opportunity to introduce automation and lean manufacturing, or the method of minimizing waste and maximizing productivity in the sector. Aside from manufacturing, the report also highlighted the IT-BPM industry and how it will likely be driven by automation, artificial intelligence, and digital transformation moving forward. Because of this, the report noted that the non-voice service is expected to grow faster compared to the traditional voice sub-segment.
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Swedish firms are looking at the potential of the Philippines as an industrial hub. Aside from business process outsourcing, manufacturing remains a vital sector due to lower wages and availability of a skilled manpower. Colliers believes that the operation of Swedish firms in the country will likely benefit the property sector, especially office, retail, and industrial. In our opinion, more Swedish firms are likely to open shop in the Philippines once the local and national governments implement a streamlined business registration process.