ICT in MINDANAO: Key to Competitiveness

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ICT in MINDANAO Key to Competitiveness Growth
QUANTUM AND IT CONFERENCE 23 January 2009,
Marco Hotel, Cagayan de Oro
COMMISSION ON INFORMATION AND COMMUNICATIONS
TECHNOLOGY
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Philippine situationer on ICT
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Where we are in the Global ICT Market
Source XMG Global 2006
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Global Services Location Index Ranking for 40
countries (2005 vs. 2007)
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Global Service Location Index 2007
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The Good News...

• Growth in the Sector and currency appreciation
  has driven up wages in US dollars by as much as
  30, reducing relative cost advantage. The good
  news is, the Philippines remains one of the
  lowest wage locations in the Global Service
  Location Index and now offers the lowest telecom
  costs compared to any country in the Index.

Source 2007 Global Service Location Index
Regional Highlights
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Rank of Philippines in Selected ICT Indices
Source National Statistical Coordinating Board
2007
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What they say about the Philippine BPO Industry

• RP is still top choice for BPO services by US
  firms. (Gary Reddick, Senior VP pf AIG Worldwide
  Life Insurance and Cynthia Houlton, Senior
  analyst of RBC Capital Markets)
• Philippines attractiveness as a BPO destination
  is no longer limited to minimal cost, but being
  able to provide global partners with human
  resources possessing the right skill sets and
  competencies supported by a sophisticaled
  telecommunictaions infrastructure. (Gary Reddick,
  Senior VP pf AIG Worldwide Life Insurance )

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What they say about the Philippine BPO Industry

• Among the US companies that consider the
  Philippines as a TOP destination for their
  off-shoring services are
• - ACN (Accenture)
• - Genpact
• - ICT Group, Inc.
• - Teletec Holdings Inc.
• - e Telecare Global Solutions, Inc.
• - People Support Inc.
• (Cynthia Houlton, Senior Analyst of RBC Capital
  Markets)

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What makes the Philippines Competitive ?
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Reliable Infrastructure Support

• REAL-ESTATE
• Low rates with liberal lease agreement terms
• Mostly administered by international property
  management companies
• POWER
• Stable with excess capacity over current demand
• TELECOMS
• Deregulated telecoms industry

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Quality Human Resources

• Abundant Labor Force of 32 Million
• English Proficient
• Highly Educated
• Strong Customer Service Orientation
• Large pool of quality Accountants and
  Graduates of Business-related Courses
• Long tradition of excellence in the professions
• Highly trainable
• Fast learning curve
• Cost efficient
• Universal cultural adaptation
• High level of commitment and loyalty

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Investment Incentives

• 4 to 8 years Income Tax Holiday (ITH)
• Special 5 tax rate on gross income after the
  lapse of ITH (for IT Park/Ecozone locators)
• Tax and duty exemption on imported capital
  equipment (for IT Park/Ecozone locators)
• Unrestricted use of consigned equipment
• Exemption from wharfage dues
• Employment of foreign nationals
• Exemption from 12 input VAT on allowable local
  purchase of goods and services (e.g.,
  communication charges)

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Strengthening Business in Mindanao through ICT
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CICT Initiatives

• Scorecarding and ICT Strategic Planning Sessions
  for Cyber Corridor ICT hubs
• iSchools
• Community eCenters (CeCs)

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CICT Initiatives

• Scorecarding exercise and ICT Strategic planning
  Sessions for Cyber Corridor ICT hubs
• Under the Philippine Cyber Corridor, Regional
  locations are scored according to their viability
  as potential locations for ICT investors willing
  to relocate to the regions. The Cyberservices
  group of the CICT conducts scorecarding exercises
  in various locations in regions wanting to be
  part of the corridor.
• So far, there 31 sites have been scrored of
  which 14 have existings locators.

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11 Sites in Mindanao Scored
Butuan
CDO
CARAGA
Sultan Kudarat
Cotabato City
Davao
Kidapawan
Zamboanga
Koronadal
GenSan
Sarangani
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ICT Strategic Plans

• After the scorecard exercise has been conducted,
  the next step is to conduct a multi-stakeholder
  ICT strategic planning session to come up with an
  ICT strategic plan and determine what needs to be
  done in order to make the location
  investor-ready. Issues like availability of
  adequate telecommunications infrastructure,
  power, availability of skilled workforce,
  incentives, peace and order and quality of life
  are discussed and viable solutions are put in
  place.

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Sustaining a Strong ICT workforce

• The iSchools program of the CICT supports the
  efforts of the Department of Education to
  incorporate ICT in education in public high
  schools to improve teaching and enhance learning
  (infrastructure connectivity, educators
  training, local support, applications and
  content)

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iSchools Endorsed in Mindanao

• Zamboanga del Sur Zamboanga Sibugay
• Bukidnon Lanao del Norte
• Misamis Oriental Misamis Occidental
• Compostela Valley Davao del Sur
• Davao Oriental Davao City
• South Cotabato Sultan Kudarat
• Lanao del Sur Sulu
• Agusan del Sur Camiguin
• South Cotabato Cotabato CIty
• Basilan Maguindanao
• Tawi-tawi Agusan del Norte

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Community eCenters (CeCs)

• Establish LGU Community-e-Centers (CeC) in
  selected Barangays, Municipal LGUs throughout the
  country, each equipped with four (4)
  interconnected computers, internet connection,
  office equipment such as photocopier, printer,
  scanner and digital camera and basic data
  processing software. The project intends to
  provide ICT trainings, advocacy works and
  development of CeC Project Information System.

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Community eCenters (CeCs)

• 30 operational CeCs in various areas in Mindanao
  since November 2006.

Siayan Open Community eCenter, Zamboanga del
Norte
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• The CICT initiatives are all aimed to heighten
  the use of ICT in Mindanao and get it ready as a
  viable lCT location for investors and strengthen
  business.

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What needs to be done

• Sustained coordination between the Local
  Government , concerned National Government
  Agencies, and the private sector to entice
  investors to make the decision to locate in
  Mindanao.
• Ensure the ICT readiness of the location (e.g.
  Telecommunications infrastructure)
• Ensure the sustainability of Mindanaos ICT
  workforce (address education gaps)

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What Needs to be Done

• There is a strong need to organize ICT Councils
  and private ICT associations/groups/foundations
  in the like of CEDFIT in Cebu and IFIT of
  Iloilo.
• For LGUs to make doing business in their
  localities easy for investors. Business
  incentives should be attractive and easy to avail
  of.

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What Needs to be Done

• Develop and implement a strong, sustainable and
  effective information and marketing campaign that
  highlights Mindanaos capabilities and strength
  as an ICT-ready location.

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• Teamwork is the ability to work together toward
  a common vision. The ability to direct individual
  accomplishments toward organizational objectives.
  It is the fuel that allows common people to
  attain uncommon results.

Andrew Carnegie
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• Daghang Salamat!