Aiming for Market Leadership in Information Technology Services
Aiming for Market Leadership in Information Technology Services
The information technology (IT) industry in the Philippines
has been going through remarkable progress and growth in recent
years.
In the hardware sector, the Philippines' semiconductor and
electronics industries have been growing at the rate of 30
percent to 40 percent per annum since 1993.
In 2000, the Philippines' exports of semiconductors and
electronics products reached more than US$23 billion, making it
one of the leading exporters of the said products in the
international market.
The same trend is seen in the software and network sectors of
the Philippines' IT industry.
Recognized as having the second biggest software outsourcing
industry in Asia, the Philippines has also become a preferred
site of many companies that are looking for back-office
operations.
America On-line (AOL), for instance, has manning stations in
the Philippines that answer e-mails for AOL from all over the
globe on a 24-hour basis.
The large U.S. book company Barnes & Noble also has
electronic-publishing operations in the Philippines. Andersen
Consulting, a U.S.-based technology consulting firm, designs its
custom software in the Philippines for its clients overseas.
The Philippines also hosts the finance and accounting support
teams of Caltex and City Bank, as well as the regional
engineering design work operations of Flour Daniel, a U.S.-based
engineering and construction firm.
The Philippines' reputation as a country of choice for many
large international companies for their IT-related operations is
affirmed by the results of several independent studies.
In 1999, as reported by the Far Eastern Economic Review, the
Philippines' was ranked the world's leader for its availability
of qualified engineers and IT workers.
In 2000, the Meta Group, a U.S.-based research organization,
also released a new E-economy index, which ranked 47 countries
according to their technological potential and competitiveness in
selected categories.
In the group's survey, the Philippines ranked number one in
the category of knowledge jobs and workers because of the
availability of qualified engineers, information technology
skills, senior management and higher education enrollment.
At present, there are more than 500 companies that have
invested over $7 billion in the Philippines' IT industry,
employing over 28,000 skilled and semiskilled workers.
Aside from the high quality workforce, these IT companies
benefit from the lower average cost of employing a Filipino IT
worker -- equivalent to just 16 percent to 25 percent of the
comparable cost in the U.S. Many more foreign and domestic
companies are expected to either set up or expand their IT
businesses in the Philippines.
What makes the Philippines capable of meeting the challenges
of the IT industry? It is a combination of the introduction of
major industry reforms, the extension of institutional support by
the government and the abundant supply of high quality human
resources.
To maintain its attractiveness as a preferred site for IT
investments, the Philippines has introduced several reforms and
strategies in the IT industry.
In June 2000, the Philippines enacted the Electronics Commerce
Law, a landmark legislation that provides the legal and
regulatory framework governing commercial and noncommercial
transactions through the Internet.
The law gives electronic messages and documents the legality,
validity and enforceability of a written document, and mandates
all government agencies to use and accept them.
The same law classifies hacking, infringements of intellectual
property rights and other forms of cyber crime as acts punishable
by law.
As part of its institutional support to the industry, the
government also created the Information Technology and E-Commerce
Council of the Philippines, which is mandated to oversee the
implementation and updating of the National Action Agenda for the
21st Century or "IT-21."
The council is composed of concerned government agencies and
members of the private sector.
The Philippine government is also prioritizing the development
of IT parks where IT companies can enjoy competitive fiscal and
nonfiscal incentives.
Further, IT services are now included in the government's
investment priority plan, which means that IT-related activities
can now enjoy prime incentives from the Philippine Board of
Investments.
The Philippines, a nation of 76.5 million Filipinos, offers an
abundant supply of skilled, English-speaking, highly trainable
and competent human resources for the IT industry.
IT companies in the Philippines acknowledge the Filipinos'
distinct culture of education and love for learning as the
country's advantages in the age of knowledge economy where IT
plays a major role.
The Filipinos' familiarity with IT is also evident in their
growing spirit of entrepreneurship for IT businesses.
President Gloria Macapagal-Arroyo is committed to bringing
about more progress in the Philippines' IT industry and achieving
the goal of transforming the Philippines into a regional hub of
IT-services in Asia.
Specifically, her administration intends to carry out the
following strategies to achieve its goal:
a. Building physical infrastructure, particularly to enable
connectivity at lower rates to make such costs on par with levels
in developed countries and to include the most basic service of
providing landlines to far-flung communities.
b. Enhancing the policies and legislative environment beyond
the Electronic Commerce Act, particularly to promote e-commerce
and mobile commerce security and convergence.
c. Enhancing IT human resource development, particularly by
expanding and institutionalizing certifying programs to ensure
the quality of IT professionals, and improving elementary and
secondary education instruction in both math and science.