The Philippines’ population is set to rise to 104 million by of 2016, a two million increase from 2015. These new Filipinos will join more than 50% of individuals who, the United Nations projects, are currently settled in urban areas in the country.
These close quarters are taking a toll on Filipinos who have to brave the metro’s clogged thoroughfares every day to earn a living. “Many of our working class, particularly the parents, hardly see their [families] during weekdays, as they have to leave their homes early in the morning to catch the train and leave work late in the evening to avoid traffic,” said Magno Edilberto R. Conag III, CEO of Naga-based Nueva Caceres Technology Solutions.
Ultimately, city infrastructure and the resulting traffic is “not only a productivity issue, but a future generational issue, with our kids growing accustomed to this [lifestyle].”
Overcrowded cities can also stunt the country’s long-term economic progress, warned Michael McCullough, managing director of real estate services provider KMC MAG Group, so decongesting our sardined cities has to start soon.
“If the Philippines can bring the growth in Manila to other areas within the country and support that with infrastructure, then we see no reason why it wouldn’t fulfill its promise of being the next Asian miracle,” he said, adding that spatial planning is needed to ensure that future business districts stay spacious.
But there are alternatives for enterprising Filipinos who want to do business yet still have room to breathe. While the National Capital Region (NCR) cities claimed the top spots in Economic Dynamism in the National Competitiveness Council’s (NCC) annual Cities and Municipalities Competitiveness Index (CMCI) in 2015, it was cities outside Metro Manila that were deemed the best in the infrastructure and government efficiency categories.
Entrepreneur.com.ph studied three emerging business hubs, which, as gateways to their respective regions, can open doors to new opportunities. This is the first story of a three-part series.
The crowd pleaser: Iloilo City
Iloilo is the go-to place for entrepreneurs looking to cast their net over new markets—and not only because it is home to the country’s fourth-busiest airport, the Iloilo International Airport.
Locally, it has serious spending power, thanks to its strong middle-income base—the bulk of the city’s income, at 60%, comes from fixed-income earners.
As a regional center, Iloilo also has a booming daytime population—many from neighboring areas around the region often come into the city to transact with government offices or buy supplies wholesale. Lea Lara, executive director of the Iloilo Business Club Inc., said, “Our population is about half a million, but in the morning it balloons to about 800,000 people—and more than that [during] festivals.”
Its priority business sectors are information and communications technology (ICT), agri-business, education, and tourism, but the city also makes for good testing ground.
“Iloilo City is a good environment to grow new businesses; it’s not [as big as] the Manila market yet, but you can test your wings,” said Lara. “Ilonggos are very straightforward: If they like your business, they will come back to you. If not, you’ll know.”
Iloilo is also taking steps to become the destination of choice for the MICE (meetings, incentives, conferences, and exhibitions) market, particularly with big-ticket infrastructure projects like the Iloilo Convention Center. “Before, we held a lot of conventions, but we couldn’t host more than 2,000 guests, so we would only target the small ones,” recalled Lara.
But with construction underway for the new (albeit politically controversial) convention center, which can seat about 3,700, the city hopes to attract more visitors and boost surrounding businesses as well.
A prime mover in paperless transactions, Iloilo City was the first city in the country to pilot a web-based business registration system in January 2014.
That pioneering effort later led to the December launch of its Online Business Registration System, Mobile Money Payment System, and Virtual Investment Promotion Center, which has since replaced its online Business Permits and Licensing System (BPLS) as the city’s first point of contact between the local government unit and local businesses.
Not only does this improved system allow for mobile payment and processing of business permits, it has trimmed the business application process in Iloilo from 27 steps down to four.
But what makes Iloilo a truly tempting business destination is its peaceful political climate, where the private and public sectors often work with each other on projects. “Investors see that as a symbol of stability. When they invest or plan for business, it’s not vulnerable to political squabbles,” Lara said.
One such multi-sector partnership is the Iloilo Government Industry Academic (GIA) Council, which brings together different stakeholders to supply technical support and link available jobs to the city’s talent pool. “We are trying to address this academe-industry relationship head on,” said Lara. “It would defeat the purpose of having all these investments in the city right now if our students don’t land a job in them.”
At 94%, the city’s employment rate was already higher than the country’s 92.7% back in 2014, but it is still looking to top that number—after all, Iloilo City produces more than 20,000 college graduates a year.
“As long as our future workforce is equipped with the right tools, there’s really no limit to what this city could achieve, business-wise,” exclaimed Rom Agustin, CEO of Callbox, Iloilo’s first business process outsourcing (BPO) company.
Related: PH’s ICT growth hangs in balance
Homegrown business: Callbox
When Agustin and his business partner Glen Norris founded Callbox Sales and Marketing Solutions, the city’s BPO industry was non-existent.
Pioneering it was a risk, but it paid off: The startup, which originally operated out of an Internet café in the La Paz district in 2004, now has 500 employees in its Iloilo office and has since expanded its operations to Davao.
“I bet everything on my faith that Ilonggos can deliver, and I was not disappointed,” said Agustin, Callbox’s chief executive officer. “Remember, Callbox is not a foreign company that was brought here. Callbox is an Ilonggo company. It was all built by the Ilonggo people from the ground up.”
The client list for the city’s first and largest homegrown BPO company includes eBay, Acer, DHL, HP, Singapore Trade Ministry, VeriSign, Kodak, and Microsoft. “We don’t sell manufactured products; we sell the skills and expertise of Ilonggos,” he said.
“We cater to Fortune 500 companies, and Ilonggos are living up to the standard. Callbox would be nothing without the Ilonggo’s inherent flair for good service.”
Victoria is a freelance writer who covers business, tech, and lifestyle. She is also the former features editor of Entrepreneur Philippines magazine. Follow her on Facebook, https://www.facebook.com/vikkiverka.
This article was originally published in the February 2015 issue of Entrepreneur Philippines magazine. Minor edits have been done by the Entrepreneur.com.ph editors.