Manpower woes, infra stifle real estate growth

CEBU, Philippines — While Cebu's real estate landscape remains bullish, it is facing some challenges such as poor infrastructure and scarcity of manpower.

Jet Ilaga, executive director at Colliers International Philippines, said that the scarcity of manpower is among the challenges faced by Cebu’s property sector.

In particular, he cited the lack of construction workers that are needed in the increasing construction developments in Cebu.

He said property companies are partnering with manpower agencies to cope up with the scarcity of engineers and construction workers.

"What is experienced (manpower scarcity) in Manila is also being experienced in Cebu," Ilaga told The FREEMAN in an interview yesterday at the contract signing between Colliers and Taft Properties for the former to manage the latter's Horizons 101, its flagship condominium development.

Aside from manpower woes, Ilaga said the worsening traffic in the metropolitan area is also affecting the industry, noting it's one of the considerations among property investors.

For instance, he said it has become harder now to move around Cebu’s business districts during peak hours because of traffic.

He said infrastructure must be improved particularly in developing seamless road networks and a mass transport system in Cebu to address its worsening traffic problem.

Moreover, the Colliers official said that the "conservative" stance among BPO (business process outsourcing) companies in further expanding their operations in the Philippines could also be a challenge.

He said the BPO industry right now is "on a plateau" in terms of growth compared to the significant growth it saw two to three years ago.

The need to have more people work in the BPO sector is also another thing to address, he said.

The BPO sector remains a main driver to the demand for office spaces.

"On a national level, more and more investors are being more conservative due to political reasons. But if you look at Cebu, the market remains strong," he noted.

Meanwhile, on the contact signing yesterday, Colliers has been hired by Taft to manage the operations of Horizons including management, supervision, improvement and upkeep of the project.

It will also see the technical operation and maintenance of various building equipment and management of financial aspects of building operations.

Meanwhile, in its latest Cebu market intelligence report, Colliers noted the proposed establishment of the Call Center City should support Cebu’s rise as the largest and most preferred knowledge process outsourcing (KPO) destination outside of Metro Manila.

A number of KPO companies that provide higher value outsourcing services such as health information management, software engineering, and finance and accounting have opened shops in Metro Cebu due to the availability of a skilled manpower.

"We believe that the expansion of the Cebu KPO sector primarily hinges on the quality of graduates that Cebu will produce over the next few years," it said.

The share of KPO employees to Cebu’s outsourcing workforce has grown from a mere 10 percent in 2008 to nearly 30 percent in 2015.

We see Cebu’s shift to higher value outsourcing being sustained by an ample supply of graduates with relevant college degrees. Of the estimated 30,000 graduates that Cebu produces out each year, about a quarter have Business degrees while a combined 35 percent have Engineering, IT and Math, and Medical degrees," the Colliers report said.

Among the major KPO players that have opened shops in Cebu are Accenture, Synchrony, Cardno Engineering, Google, Catapult International, JP Morgan, Fluor Daniel, and Dash Engineering. (FREEMAN)