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Why Setting Up Offices in the Province is Good for Outsourcing

May 23, 2017 Claire Ponsaran
Why Setting Up Offices in the Province is Good for Outsourcing

It’s not practical anymore for outsourcing companies to solely focus on their Manila-based operations. They’ll have to consider more sustainable options, such as setting up new offices in locations outside of Metro Manila or in other regions. This actually makes perfect sense, and here are the reasons why.

#1 Many provincial cities have been developing their infrastructure and real estate to properly cater to the needs of the outsourcing industry.

Manila isn’t the only city that can provide the technological and commercial needs of IT-BPO companies. Baguio, Dumaguete, and Iloilo have been included in the annual list of Next Wave Cities for several years now by the Information and Communications Technology Office of the Department of Science and Technology (DOST-ICTO) and Information Technology and Business Process Association of the Philippines (IBPAP). In fact, Iloilo City has been recognized in 2016 as a Center of Excellence for IT-BPM operations, joining a prestigious group of cities that includes Davao, Cebu, and Bacolod.

This recognition is no joke. It’s the result of the local government’s efforts in raising the quality of technological and physical infrastructure, such as office buildings with unfettered access to internet, electricity, and water. Every building in Iloilo Business Park is required to have an industrial-sized generator installed for an uninterrupted power supply. Public transportation rarely goes through the streets that surround the office buildings. And so, employees in these high-rise offices are not bothered by motorized traffic while they work.

#2 Environmental pollution hasn’t reached unhealthy levels yet in the provinces.

Unlike Metro Manila, which seems to be suffocating from the smog, Iloilo City made good on its commitment to protect the environment. This includes maintaining good air quality in the metropolis, keeping the Iloilo River clean, and preserving the mangroves that hugged the edges of the river.

These environmental initiatives helped make Iloilo City clean and livable for everyone, including employees of outsourcing companies. They are not as exposed to harmful substances in the air and water as employees in Metro Manila. Thus, they’re mostly healthier and less vulnerable to pollution sickness.

#3 The costs of living in Iloilo City are much lower than in Metro Manila.

Consumer prices including rent in Iloilo are around 40% lower than in Manila. On average, outsourcing employees in Iloilo earn P17,500 more or less each month while those in Manila receive around P27,700 monthly. These rates may appear too optimistic, but the estimated P10,000 gap proves there’s a significant disparity in income between the national capital region and the rest of the country.

Outsourcing firms that invest in the provinces may be spending less on labor costs, but the employees are not on the receiving end of a short stick. Because the costs of living are much lower for Iloilo City residents, they have greater purchasing power and they’re likely to have more savings set aside compared to employees in Manila.

#4 New businesses in Iloilo will attract a larger workforce coming from other provinces in the Western Visayas region.

Fresh graduates and job seekers in and around the city as well as in other provinces in Region 6, such as Roxas, Aklan, and Antique, will surely gravitate towards Iloilo City rather than move to Manila to look for work. Universities and colleges in the province of Iloilo alone account for more than 50 campuses that produce thousands of college graduates each year.

Once workers who migrated to Manila saw the growth of Iloilo from a rural area to a bustling metropolis, they’ll be persuaded to come back to their hometown or to move yet again and finally settle for good in this province. This effectively solves the fear of many outsourcing firms that they won’t be able to find qualified workers in the provinces.

More Opportunities, Greater Rewards

The technological and infrastructure development has been frantic at best, which may lead to an oversupply of office spaces. This will pull down the rental costs, which is good for business. While many vacant offices will likely remain unoccupied and continue to depreciate in value if companies are slow to migrate from Manila, they will not remain empty for long.

Outsourcing firms aren’t the only businesses that will come and set up shop in regions outside of Manila. Businesses that cater to the needs of a growing workforce will certainly make their presence known in the provinces. Consequently, the local government and provincial residents will go on to enjoy greater rewards from this development.

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