80% regional BPM centers moves back expansion concentration to Metro areas

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Some 80 percent of the total business processing management (BPM) centers aiming to expand in other regional areas are already “moving back to Metro Manila areas,” according to a Colliers International executive.

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Jie Espinosa, Colliers International office services director, told reporters at the Philippine Real Estate Market briefing on Tuesday that BPM companies who look for other areas than Metro Manila to expand operations saw slow infra maturity, manpower and peace and order as a major concern in the provinces.

“A lot of these companies would look at provincial options but they tend to go back to Metro Manila because some of the provincial options like infrastructure are not yet there,” Espinosa said.

“Most of these companies realize that infrastructure might take a while to mature. [About cost] yes, significantly lower [compared to Makati offices]. But what they consider the most if the infrastructures and manpower,” he added.

Rather than closing regional BPM satellites, Espinosa explained that the call centers in the regions would only “reach up to a certain level of improvement” and would not be able to expand further due to labor force demand in the provinces.

Several BPM companies, as well as other traditional office takers, are already moving to Philippine Economic Zone Authority (PEZA)-registered economic areas such as Cebu, Davao and Bacolod, particularly Davao where “major BPM companies like Teletech, Teleperformance and Convergys” are moving operations.

Aside from infra and manpower woes, these companies are also considering peace and order of the regional economic zones, as well as the recent bombings in the provinces that is “affecting the investor confidence” of the area.

“I think [commotions and bombings]would affect [the business operations in the provinces], but we’re hoping that it will not be a prolonged and permanent,” Espinosa said.

It was recalled that a bomb explosion occurred in Cotabato City, Mindanao on Monday that killed 6 persons and damaged at least four vehicles. Espinosa said that bombings like the Cotabato explosion will really decrease investor confidence in the regions.

As of the first quarter of 2013, about 30 percent of the BPM firms in the Metro areas have already established provincial arms, while the other 70 percent of these BPM firms that expanded to the regions have already moved back most business requirements in Metro Manila.

 

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