Businesses urged to form clusters

Philippine businesses have been urged to form targeted sectoral clusters such as tourism and business process outsourcing (BPO) such as call centers in order to attract more foreign investors.

In a workshop for businessmen and government officials initiated by the Asian Development Bank (ADB) and the Asia Society Philippine Foundation, clustering was proposed as an important strategy to ensure a targeted effort and to enhance the advantages the country enjoys. However, it was likewise stressed in the workshop that the anticipated power shortage should immediately be addressed if the country hopes to remain competitive in the region.

The call center business, which started to flourish in 2001, is considered one of the country’s sunshine industries and now employs about 55,000 people. It has contributed significantly to the country’s service sector, which in turn recorded significant contribution to the gross domestic product (GDP) in the first nine months of 2004.

"We have experienced tremendous expansion and there is still an influx of companies looking to set up call centers in the Philippines," said Karen Batungbacal, president of ICT Group Inc. in the Asia Pacific and concurrently president of the Business Processing Association Philippines.

Batungbacal, however, stressed that the lack of fluency in English and perceptions of security risks are two major constraints that could derail efforts to grab a major share of BPOs in the region.

To ensure that the country maintains its competitive advantage in English fluency, the workshop participants suggested using government-owned television networks to promote the use of English, as well as convincing colleges and universities to revert to the use of English as the main medium of instruction.

Meanwhile, medical tourism, one of the country’s seven investment priorities, capitalizes on the existing state-of-the-art hospitals and medical facilities in the country and on the huge number of doctors, nurses, and caregivers now going out of the country to find work.

The Japanese government and health care players have already been in serious talks with the Department of Trade and Industry and the Department of Tourism in establishing the industry by next year.