THE business process outsourcing (BPO) industry is seeing 50,000 job opportunities going up in smoke thanks to the government’s moratorium on opening new ecozones in Metro Manila.

In a statement released on Friday, the Information Technology and Business Process Association of the Philippines (IBPAP) said that while it was supportive of the intention to boost countryside development, President Rodrigo R. Duterte’s new policy ordering the Philippine Economic Zone Authority (PEZA) to stop processing applications for ecozones in Metro Manila may lead to insufficient supply to meet the demand for contact center spaces in the city in the medium term.

“It is estimated that there are only 126,940 square meters of PEZA-accredited office space versus the forecasted annual demand of 450,000 square meters. This shortage in PEZA-registered IT-BPM (Information Technology and Business Process Management) space in Metro Manila could result to as much as 40,000-50,000 job loss in the industry…,” it said.

It also said that this may also result in “a significant increase in rental rates,” and that all this may affect “the competitiveness of the Philippines for future expansions.”

Administrative Order (AO) No. 18, which took effect last month, called for inter-agency efforts to strengthen ecozones in the countryside and put a moratorium on the processing of applications for ecozones in Metro Manila.

IBPAP noted it is “pleased and supportive” of the government’s thrust to grow ecozones in the countryside, but asked the Office of the President to continue processing pending ecozone applications given the expected harm to the industry.

“…IBPAP is requesting to facilitate the proclamation of pending PEZA applications in Metro Manila with the Office of the President,” the group said, referring to 22 ecozone applications awaiting Mr. Duterte’s approval.

Aside from the possible loss of jobs opportunities, IBPAP pointed out that the lack of availability of talent in the countryside is a concern in the new policy.

“While some IT-BPM has been successful in expanding to provinces, these are primarily driven by voice services. However, as the industry pivots to digital, talent availability for mid- to high-complexity work has predominantly [been] limited to metro cities such as Manila and Cebu,” it said.

For its part, Contact Center Association of the Philippines (CCAP) said it supports promoting more work in the countryside, but noted there may be a need to hold more discussions with stakeholders to temper worries on the new policy’s impact.

“(AO No. 18) is causing some concerns within the industry. CCAP sees that more dialogues between the industry and government is needed to alleviate these concerns,” it said in a statement released Friday.

CCAP Chairman Louie Benedict C. Hernandez noted that global companies entering the country are generally more drawn to invest in Metro Manila because of the infrastructure, accessibility, and available talent in the area.

“If you are a new Fortune 1000 company, typically if you want to invest in the Philippines for the first time, you will first think about going to Manila… Their first safety comfort is to see how this works in the established Metro Manila as their location,” he said in a media briefing Friday.

With AO No. 18 in place, the CCAP chairman said companies that would still want to be in Manila would have to “price in that cost of doing that business,” noting that investing in Manila is already around 10% more expensive than operating in the provinces.

“We want the government to help us build another Metro Manila. We’re so successful in Metro Manila, but I think we’re not able to replicate the success of Metro Manila for our industry outside Metro Manila… We need more provincial locations replicating what we did,” CCAP President Jojo J. Uligan added. — Denise A. Valdez

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