Slow accreditation process to affect Cebu BPO growth

CEBU, Philippines — Real estate advisory and consultancy firm Colliers International Philippines warned that Cebu’s outsourcing sector is under threat, if the Philippine Economic Zone Authority (PEZA) continues the slow approval of building applications.

In its recent property briefing held in Cebu, Colliers officials led by managing director Richard Raymundo expressed apprehensions that the appeal of Cebu as the outsourcing investment hub in the country will be affected by the government’s decision to hold or slow down the approval of PEZA accreditation applications especially for buildings located in the urban districts.

Colliers reported that of the 400,000 square meters approved by PEZA in the recent months, not a single square-meter comes from Cebu.

The PEZA moratorium will not only hurt the BPO sector in Metro Manila, but also in Cebu, as applications by building developers here are also pending in a bid to spread the opportunity of investments to under-developed areas.

If the process will continue to prolong the process, this will threaten the vacancy rate of office spaces in Cebu, discouraging potential outsourcing firms to expand or locate here.

“We just hope that we can come up with solutions to hasten things,” said Cebu IT BPM.Organization (Cib.O) managing director Wilfredo Sa-a in a separate interview.

Meanwhile, Colliers recommended that while PEZA still has to consider the private sector’s call to speed up the approval, developers may have to reconsider building office spaces that target to non-PEZA sensitive industries such as ESL schools, or even warehousing and distribution center facilities.

In Metro Manila alone, more than P34 billion worth of projects to put up buildings for IT-BPM companies are now at the mercy of President Duterte after Malacañang slapped a ban on new economic zones in the country’s capital district.

In an effort to boost countryside development, Administrative Order (AO) 18 slapped a moratorium on new ecozones in Metro Manila starting June 22, giving pending economic zone developers whose papers are in Malacañang about a month to iron out deficiencies in their submissions.

Although the AO only singled out the ban for Metro Manila, applications for PEZA proclamations from Cebu are also affected.