Nestled between blue seas and green mountains, this small University Town (Land area: 33.6sqkm, Pop: 131K, 2015 census) hosts 4 universities, 6 colleges, 25 000 students, and 11 000 IT-BPM workers in 3 large companies and more than 25 mostly MSME companies. The Academe, plus government-provided training, annually produces more than 10 000 skilled workers for a variety of areas such as the IT-BPM Industry and the Tourism Industry. The availability of jobs and the low cost of living, paired with the high quality of life in Dumaguete City and its surrounding towns, have turned it into a magnet for talent from other parts of the country and of the world. It’s a happy accident of nature that has made “quality of life” the biggest attraction of this small town that also serves as a gateway to the many tourist destinations in the area. But, it is the “City of Gentle People” that turns visitors into locators.
Dubbed locally as the "City of Golden Friendship", Cagayan de Oro City is ranked as one of the most competitive cities in the Philippines, according to the National Competitiveness Council (NCC). The city is one of the top 10 richest cities according to the Commission on Audit (COA), one of the safest cities in Southeast Asia according to Numbeo.com, and was named as one of the 2016 Next Wave Cities for the IT-BPM industry by the IT-Business Process Association of the Philippines (IBPAP) and the Department of Information and Communications Technology (DICT). Cagayan de Oro is considered as a melting pot in Mindanao. A growing metropolis to be classified as a first-class city. Cagayan de Oro serves as the regional center being the most populous highly-urbanized city in Northern Mindanao (Region noted for its accessibility, business growth and tourism attractions).
Contact Person: Jonathan Arvin Adolfo, Executive Director
Cagayan De Oro ICT Business Council
Syntactics Inc., 3F, Egmedio Bldg, Corrales Ave, Cagayan de Oro City
Senator Sonny Angara has allayed the fears of the business process outsourcing (BPO) sector, saying that tax incentives currently enjoyed by BPO companies will remain despite the proposed comprehensive tax reform program of the government.
“Makakahinga na po nang maluwag ang ating BPO sector matapos liwanagin na hindi mawawala ang kanilang VAT exemption. With the industry’s incentives intact, we can continue to attract more BPO investments that would spur economic growth and job creation in the country,” said Angara, chairman of the ways and means committee.
The Department of Finance (DOF), during Wednesday’s public hearing on the proposed tax reform, has clarified that foreign services of BPO companies in special economic zones will remain exempted from VAT, while those outside special economic zones, including those registered under the Board of Investments, will retain their zero-rated (0% VAT) status.
Certain groups from the industry had earlier voiced out their concerns that the removal of the VAT exemption would make the country a less attractive destination among global BPO firms.
DOF Usec. Antonette Tionko said that there is no change in their tax policy, and some industry stakeholders have likely misinterpreted the provisions of the bill.
“BPO investments have been a big help in sustaining the country’s economic growth for the past years. We value such contribution and the government has been very supportive of the industry by granting BPO firms various incentives,” Angara said.
In 2016, the Information Technology and Business Process Association of the Philippines reported that the industry provided direct employment to some 1.15 million Filipinos, and generated $23 billion in revenue.
Meanwhile, five Philippine cities made it to the 2017 Tholons top 100 outsourcing sites in the world, with Metro Manila recognized as the fourth most competitive global BPO destination. Other Philippine cities on the list include Cebu (12th), Davao (85th), Bacolod City (97th), and Santa Rosa, Laguna (100th).
Angara stressed that the IT-BPO industry should be tapped as a key driver of rural development through the creation of high-value online jobs in far-flung communities.
“While the industry thrives as one of the top career providers in our major cities, we must also bring opportunities in the countryside where they are needed the most. Dapat, bigyan din natin ng pagkakataon ang ating mga kababayan sa mga malalayong probinsya na makapagtrabaho sa sektor na ito na hindi na kailangan pang lumuwas ng Maynila,” he added.
We, the Information and Communications Technology (ICT) Councils of our respective cities, provinces and regions from Luzon, Visayas and Mindanao under the National ICT Confederation of the Philippines most respectfully appeal to His Excellency Rodrigo Roa Duterte, President of the Republic of the Philippines and the 17th Congress of The Republic of the Philippines for the continuation,retention and expansion of current fiscal incentives of Information and Communications Technology - Business Process Management (ICT-BPM) companies in the Philippines in order to generate jobs and investments especially in the countryside, sustain the growth of the said industry, which accounts for the increase in the country's GDP along side OFW remittances, and achieve the current administration's target to ensure inclusive socio-economic growth.
The proposed tax reforms of the current administration are laudable especially insofar as increasing the net income of the middle class by reducing individual income tax base. But taxation is not only a means to generate revenues, it is also a tool to develop and grow industries that are relevant and sustainable especially in areas where there are less jobs and opportunities. Across the globe, developing countries use tax incentives as a means to attract direct foreign investments to solve unemployment, engage in technology transfer and intensify development of preferred industries.
Today, the Philippines is among the global leaders for ICT-enabled jobs, because of our very strong customer service culture, excellent English communication skills and high-level of digital literacy. But above all, from the countryside perspective, the Philippines has leveraged on the strength and potential of its non-metropolis locations or provinces which abound with talent. Seventy percent of the country's graduates are outside of Metro Manila and because of the attractive national tax incentives and the dynamism of provincial locations through its respective ICT councils, ICT-BPM companies have started to set up in Tier 2 and 3 cities, thereby creating the necessary jobs and investment opportunities. Real estate facilities such as ICT parks and centers accredited under the Philippine Economic Zone Authority has begun to flourish in the provinces and thus stimulating the real estate and allied businesses. Because of the thousands of jobs generated by these companies outside of Metro Manila, the growth of support services such as food, transportation, health services, housing and other ancillary services have all increased. The educational sector has been continuously upgrading its quality due to the global requirements. Filipino entrepreneurs have begun to set of up their own companies to also share in the ever increasing global demand for services and digital products. Many provinces have followed the lead of industry associations in creating ecosystems for high value ICT services such as animation, game development, health care information management, finance and accounting, software development, and many other complex segments.
By reducing or removing the current set of tax incentives for ICT-BPM companies - the most affected segment is the provincials locations which currently take advantage of national incentives under a centralized government structure.
Introducing VAT on BPO services could have very damaging repercussions for growth, expansion and sustainability of this industry in the countryside. The inevitable implication for BPO services will be an increase in cost, affecting employees current benefits, and any form of expansion and at worst, for them to explore low-cost economies for their BPO operations.
It is our most humble appeal that the government retain the current incentive package of the ICT-BPM industry and encourage their expansion in provincial location. In the alternative, we appeal that these companies be allowed tax deductions for any relevant talent development programs it will invest in to grow and ensure the quality of talent in the countryside.
We fully support the goal of the current administration to create jobs and investments for inclusive and together with the government, the National ICT Confederation of the Philippines (NICP) and all its member ICT councils vow to contribute ONE MILLION ICT JOBS by 2022 in the countryside.
National ICT Confederation of the Philippines (NICP)
Atty. Jocelle Batapa-Sigue Head, NICP Public Sector and Policy Committee
Tacloban City and the Province of Leyte will be this year’s host of the National ICT Summit organized by the National ICT Confederation of the Philippines (NICP).
The Regional Information and Communications Technology Committee – Eastern Visayas Federation for Information Technology (RICTC-EVFIT) will be hosting the eight staging of the annual summit on November 10 and 11, 2016 in Tacloban City and in the Municipality of Palo, Province of Leyte.
This year’s theme, “Acceler8 Region 8 thru the Digital Economy”, highlights the resiliency and renewed dynamism of Eastern Visayas after Typhoon Yolanda.
Department of Science and Technology (DOST) Region 8 Director Edgardo Esperancilla serves as chairman of the summit as the chair of RICTC-EVFIT.
NICP President Wilfredo Sa-a, Jr. hopes to bring together champions of the information and communications technology from public and private sectors to share industry trends and development, understand the challenges, identify and collaborate on ways forward to promote ICT industry development, generate new investments and create new jobs for the cities outside of Metro Manila and the countryside.
Among the key activity of the summit is the 5th eGOV Awards for local government units, a recognition given to municipalities, cities, and provinces with exemplary performance in empowering its citizens and business sector by integrating ICT in their programs and services.
Jocelle Batapa-Sigue, former president of NICP and chair of the 2016 eGOV awards says the two categories are Best in eGov Customer Empowerment (G2C) Award and Best in eGov Business Empowerment (G2B) Award.
This year’s topics include the presentation of Philippine IT-BPM Roadmap 2022, NICP Targets in for 2022, creating competitive cities and exploring affordable innovative options, impact sourcing and developing country side outsourcing, resiliency and business continuity, Internet for agriculture and creating a startup ecosystem.
The 2-day summit will also feature a 24-hour hackathon called Hack the Climate which will serve as venue for developers to create solutions addressing climate change and environment issues.
The event is supported by the newly-created Department of Information and Communications Technology (DICT).