JETRO Philippine IT Industry Update 2006-No.6

Transcription

1 2006-No.6 JETRO Philippine IT Industry Update Table of Contents 1 Introduction Province of Camarines Sur Locators Started Operation in Camarines Sur IT Park ICT Human Resource Development by Provincial Government Ateneo de Naga University has 4 year Animation Course Challenges: Improving Infrastructure and Increasing Local Employment Opportunities Clark Special Economic Zone Overview % Lower Labor Cost and 37% to 64% Lower Office Rental Compared with Metro Manila IT Related Companies in CSEZ Sutherland Global Services Cybercity Teleservices (CTLL) Wallem Innovative Solutions Possibility for Japanese ITS/ITES Industry...7 The second location to be featured in this report is Clark Special Economic Zone (CEPZ). CEPZ in central Luzon and Davao in southern Mindanao are often mentioned as the third destination for ITS/ITES after metro Manila and Cebu. Clark is drawing attention lately due to easy access from Metro Manila (about an hour drive), series of recent establishment of Indian and American BPO companies and there is even a plans to build Hollywood in Asia in the area. 2 Province of Camarines Sur As it was introduced in the 2006-No.1 released February 2006, Camarines Sur is strongly promoting ITS/ITES industry under the leadership of Governor LRay Villafuerte. What s unique in this province are 1) their strong focus on Japanese market in their marketing and human resource development and 2) various training programs provided for free by provincial government to the local citizens. 1 Introduction As we mentioned in the past issues of this report series, IT Service and IT-enabled services (ITS/ITES) in the Philippines has been quickly expanding to provinces. Philippine government is driving the development of Philippine Cyberservices Corridor (PCC) lead by CICT (Commission on Information and Communications Technology), as the champion of this program. PCC is envisioned to be a corridor of 16 hub cities, that are connected by high speed digital network with fiber optic backbone, from Baguio in northern Luzon to Zamboanga in southern Mindanao, generating 1 million employment in ITS/ITES industry and driving economic development in the provinces. This is one of the Philippines top priority strategic initiatives mentioned in State of the Nation Address by President Arroyo in 2006 as well as in We featured Cebu thrice in this series since it has been the second most popular destination of ITS/ITES companies after Metro Manila. In this issue, we will introduce 2 other locations outside Metro Manila and Cebu. The first is the Province of Camarines Sur located in Bicol region in southern Luzon. In October 2006, we visited there for the second time after the first visit in January 2006 which was featured in 2006-No.1 issue 1 released in February, We can safely say that Camarines Sur have not established significant presence in IT/ITES industry yet. However, there are already noticeable number of Japanese companies that pay special attention to this province because of the unique initiatives of this particular province, lead by their young and enthusiastic governor, emphasizing the development of human resources with Japanese language capability. Nine months after our last visit, we witnessed significant progress happening in quite fast pace including new locators in IT Park starting their real business operation, improvement of accommodation/lodging facilities and development of leisure facilities. 1 Baguio Pangasinan Iloilo Manila Camarines Sur Cebu Leyte Cagayan de Oro Davao General Santos Zamboanga On October 13, 2006, about 9 months after the last visit (January 27, 2006), we visited the municipality of Pili, where the provincial capital of Camarines Sur is located, and interviewed Governor Villafuerte (in the picture, second from the left) about the latest update of their IT Park and its future plans. He took us for a tour in the IT Park as well. 2.1 Locators Started Operation in Camarines Sur IT Park When we visited last January, there were no locators in their government-run IT Center even though the building construction had been completed. In our October visit, however, we learned that seven (7) companies including four Copyright 2006 JETRO Manila Center Page 1/8

2 (4) Japanese companies have already launched their operation or furnishing their offices to start operation soon. In the Animation Training Center room within this IT center, around 30 graduates who completed their 3 month training program were working on actual production of TV animation for India subcontracted by two animation studios in Manila. Beside them, another 30 trainees were seriously striving tracing exercises. In the Medical Transcription Center also run by the provincial government, 25 graduates have started their actual work for U.S. customer (photo on the right). Transcriptionists listen to a dictation of oral medical records and type them. One person can perform about 1,500 lines (accuracy late 99 %) in 8 hours a day. Aside from the above government run businesses, four (4) Japanese companies have decided to move in to this IT Park. Their business outlines are as follows; Software Development A software development company based in Fukuoka is preparing for their own facility for trainings on Java, C++, Oracle database and my SQL, etc. They plan to start with about 20 local employees and 2 Japanese expats. During our October visit, furnishing of office space they leased was ongoing. Mechanical Design Service A mechanical design service company based in Nagoya opened their office in Camarines Sur IT Park last June. They started training of Japanese language and AutoCAD for 7 locally hired engineers (most of them are graduates of mechanical engineering). Those trainees are planned to be sent to Japan after the training. English Language Training for Foreigners ActBusiness Co., Ltd is constructing an English training facility inside Camarines Sur IT Park. They offer Educational Tourism by combining English language training and tourism in the Philippines. They have English study programs for Japanese (ranging from 2 weeks to 12 weeks) and provide one on one lessons by Filipino English teachers. Web based online lesson programs via internet are also prepared so that those who went back to Japan could continue English conversation lessons. They plan to have 10 English teachers within 2006 and are targeting to expand to 20 teachers in the future. Training and Placement for Nurses The former Prime Minister Koizumi of Japan and the President Arroyo of the Philippines signed Japan-Philippines Economic Partnership Agreement (JPEPA) on September 6, Following this agreement, it is expected that business activities to accept Filipino caregivers and nurses in Japan will accelerate. A recruitment agency based in Kobe has hired 6 people with medical background who completed Japanese Language Training course in Camarines Sur. They are preparing for further training as caregiver and nurse in Japan. In addition to these companies in IT Park, four (4) other Japanese software development companies in Metro Manila have employed software engineers from Camarines Sur this year. Camarines Sur s efforts in ICT human resource development with Japanese language capability seem to have started to bear fruits. Table 1 : Camarines Sur IT Park (PEZA Registered) Overview Location Province of Camarines Sur, Bicol Region, Luzon Island, Philippines Area Size 5 ha. Operated by Locators Cost of Land Lease, Office Rental Daily Minimum Wage Telecomm. Service Providers Access to Airport Investment Incentives Human Resource Human Resource Development Initiatives by the Provincial Government (Free of Charge) Provincial Government of Camarines Sur 7 Companies engaged in the following: Software Development (Japanese) CAD(Japanese) English Training (Japanese) Animation Medical Transcription BPO Nurse/Caregivers Service (Japanese) Land:3 years free land lease for locators who build their own building. Office: US$2/sqm/month 6 months free rental for available office space. Camarines Sur: Php Metro Manila: Php Bayantel Digitel 45 minutes from Manila to Naga airport, 5 minutes drive from Naga airport to the IT Park. (5 round trip flights between Manila and Naga weekly) 50 minutes from Manila to Legaspi aisport, 75 minutes drive from Legaspi airport to the IT park. (17 round trip flights between Manila and Legaspi weekly) PEZA incentives 2 Provincial government incentives 6 months free rental for available office space in the IT park. 3 years free land lease for locators who build their own building. Major Universities/Colleges in the area Ateneo de Naga University Collegio de Santa Isabel University of Nueva Caceres There are 6 universities and 32 colleges in the province, graduating 3,200 from IT related courses and 1,500 from engineering and architecture annually. PhilNITS (Philippine National IT Standard) Review Course (150hrs.) Japanese Language for JLPT level 4 (150 hrs.) Japanese Language for JLPT level 3 (300 hrs.) 2 Refer to JETRO documents about details of tax incentives for PEZA registered companies _010_BUP_0.pdf Copyright 2006 JETRO Manila Center Page 2/8

3 Others English Communication (for call center agents (100 hrs.) Animation (3 months) Tourism Facilities Camarines Sur Water Complex (Operational) Caramoan Islands Resort (to be completed in 2007) Cavanas and Luxuary Villas and Suites within the provincial capitol complex are being constructed. (to be completed in 2007) Golf Course (in plan) Commercial Complex (in plan) 2.2 ICT Human Resource Development by Provincial Government The government of Camarines Sur has strong belief that promoting ITS/ITES industry requires not only building facilities but also preparing human resource that are capable of performing ITS/ITES. That is why the government provides variety of training programs free of charge. As mentioned earlier, graduates from animation and medical transcription training (both of them started on April 2006) are already employed and actively working in each respective field. The provincial government has a target to graduate 300 from animation training and 200 from medical transcription training by January In addition to animation and medical transcription training, 952 have graduated from English communication training since December This training is mainly meant to prepare call center agents. Aiming to achieve 2,000 graduates by January 2007, number of trainers was increased from 5 to 17. Many companies have already visited Camarines Sur to assess it as their potential next site for expansion. These companies include an American computer maker DELL which has captive call centers in Manila, and a leading American call center TeleTech which is aggressively expanding to provinces outside Merro Manila. Japanese Language Education Four (4) Japanese nationals are staying in Camarines Sur to teach at Japanese Language Education Center located inside the IT Park. In 2005, the first year of the Japanese language training there, 84 students completed Japanese Language Proficiency Test (JLPT) Level 4 course and 13 finished JLPT Level 3 course. In the actual JLPT exam conducted in December 2005, 12 out of 62 examinees passed Level 4 (passing rate of 19.4%) and 8 out of 13 passed Level 3 (passing rate of 61.5%). According to Governor Villafuerte, the reason behind the high passing rate of Level 3 was intensive review sessions held right before the exam. They plan to implement similar review sessions for both Level 3 and 4 before JLPT exam in It is expected that 150 and 25 people will complete the training courses for Level 3 and 4 respectively in Photo: Camarines Sur Japanese Language Training Center The Japan Foundation, an organization that implements JLPT, commented about a result of 2005 exam asying, Examinees from Camarines Sur did well in vocabulary and grammars but they need to improve listening comprehension. During our visit to the Japanese Language Training Center, we noticed that there was no audio-visual equipment / facility in their learning environment. It seemed that the only opportunity for the students to exercise their listening comprehension of Japanese Language was within their classroom listening to their 4 Japanese language teachers. PhilNITS Review Course In the Philippines, a certification for professional IT engineers called National IT Standard Examination (PhilNITS) has been implemented since PhilNITS certification is mutually recognized by Japanese government. Camarines Sur IT Center has been conducting a review course for those who plan to take PhilNITS exam for Fundamental IT Engineers (PhilNITS-FE). They provided 40 hour course in 5 days in March 2006 as a preparation for PhilNITS-FE exam in April Unfortunately, however, no one passed the April 2006 exam of PhilNITS-FE from Camarines Sur. After this experience, they extended the review session to 150 hours to prepare for the last exam in October 2006 for which a test center was set up in the province for the first time. 28 examinees took the exam and the first passer from the province of Camarines Sur was born in late October, Ateneo de Naga University has 4 year Animation Course Ateneo de Naga University (ADNU) is located in Naga City, 20 minutes drive from provincial capitol in Pili. Courses offered in their College of Computer Studies and College of Engineering are as follows; College of Computer Studies Computer Science Information Technology (IT) Information Management Digital Illustration & Computer Animation(DICA) College of Engineering Civil Engineering Computer Engineering Electronics and Communications Engineering Atty. Manuel O. Diaz, Jr. (in the photo), the dean of the College of Computer Studies, entertained our Copyright 2006 JETRO Manila Center Page 3/8

4 interview and he also took us for a tour in laboratories of DICA, the only 4 year animation course in the Philippines. College of Computer Studies in ADNU is composed of 4 departments. It has about 600 students from the first year to the fourth year and around 200 out of them are enrolled in DICA. DICA was established in 2000 and the first batch graduated in senior students currently enrolled are the fourth batch. At the early stage of their training, they first start with hand-drawing and then are asked to draw exactly the same picture using drawing software. Their four year study covers hands-on projects in 2D animation, clay animation, 3D animation, 30 second TV commercial and music video animation. Their thesis project is to produce a 3D short story animation. Many of these thesis animations from DICA have been ranked highly in nation wide animation competition every year. Prize winning animations from DICA in 2006 such as Reverie and Night Shift can be seen at azingshorts/. When we visited the laboratory, senior students were creating characters of a short story animation as their thesis project while using freely 3D animation software Maya. (in the photo) 2.4 Challenges: Improving Infrastructure and Increasing Local Employment Opportunities We requested the provincial government to arrange for us an informal lunch meeting with students of the Japanese language training center who are the graduates of IT or engineering related courses. It was because we learned that about 20% of the students are from IT related courses while 30% of them graduated from engineering courses. They are local youth average of 24 to 25 years old and graduates of college courses such as computer science, information technology, mechanical engineering and electronics and communications engineering. However, most of them were unemployed at the time of our meeting. When we asked what made them interested in learning Japanese, a few of them said I would like to understand Japanese anime in original language. Most of them, however, have strong expectation and hope that they could find better employment opportunities if they acquire Japanese language capability. It is also noteworthy that many of them expressed that they preferred to work in their province. resources. To make such investment actually lead to the development of local economy, they need to bring companies to invest and/or locate in Camarines Sur. However, fact remains that most of highly educated people go to work in Metro Manila. For example, 90 % of ADNU s graduates from the College of Computer Studies are employed in Manila, according to Atty. Diaz. The biggest challenge for this province in attracting ITS/ITES related companies is the improvement of infrastructure development such as telecommunication, transportation, accessibility and living environment. In the area of accessibility improvement, Gov. Villafuerte is actively involved in the project for building a new international air port in Bicol region as the Chair of Bicol Region Development council. In terms of telecommunication infrastructure, the Governor told us that he had started negotiating with PLDT, the Philippine s largest telecommunication service provider. For business and long-stay travelers, several comfortable accommodations inside the provincial capitol compound are ready for use. More cabanas and luxury villas & suites (in the photo: scheduled to complete on June 2007) and a commercial complex are under construction to promote more tourism to the province as well. It was clear that the development of Camarines Sur is progressing a faster pace the we expected. We must say that Camarines Sur is still behind, in terms of the infrastructure, of many other provincial cities targeting to become one of the IT hubs. However, Gov. Villaguerte has quite strong enthusiasm in human resource development, broad perspective and leadership to execute his long term vision with agility. He told us We know we started late, that is why we must do something different from others. Many Filipinos are targeting western market, but we would rather invest in human resource development for Japanese market. It is our strategic approch. It might take some more time to improve infrastructure, but things are definitely moving forward and progressing rapidly in Camarines Sur and it is an interesting province that we would want to keep our eyes on. As stated previously, Camarines Sur provincial government has invested significantly to develop ITS/ITES human Copyright 2006 JETRO Manila Center Page 4/8

5 3 Clark Special Economic Zone 3.1 Overview Clark Special Economic Zone (CSEZ) is located in the province of Pampanga, or about 80kms north of Manila. From Manila, it takes about an hour drive via NLEX, North Luzon Express Way (toll fee for standard-sized car is P203) whose renovation was completed in February US Air Base had been located in Clark for almost a century since After it was turned-over to the Philippine government in 1993, Clark was designated to be a special economic zone and has been promoting itself to locate private companies to the economic zone. (Please see Table 2 basic information about CSEZ.) Figure 1: Location of Clark Special Economic Zone Table 2:CSEZ basic information Location Province of Pampanga, Luzon Island Area Size Main Zone : 4,400 ha. Sub Zone: 29,000 ha. Land Leasing by Clark Development Corporation (CDC) No. of Locators (27 are IT related) No. of Employees 5 45,000 (4,400 are employed by IT related companies) Business Park Operators (sub-leasing offices and warehouses) Berthaphil Industrial Park/Office Park Philexcel Business Park Most of the IT related locaters are located in the above two business parks. Cost of Leasing Land / Building Daily Minimum Wage Telecomm. Service Providers Land: US$0.3 US$0.5/sqm/month Building: US$1.5 US$6.0/ sqm/month Above rate applies when directly leased from CDC. Non agricultural, 16 or more employees: Asset size Php.30M or more: Php Asset size less than Php.30M: Php Metro Manila: Php See Table 4 for IT related jobs salary level. PLDT, GLOBE, Digitel Ref. PLDT Leased Line Connection Cost - E1(2Mbps): Upon Installation: US$500, 3 It takes less than an hour from Balintawak, the entry point of NLEX, to CSEZ. Traveling time from Manila to CSEZ depend on traffic condition in Metro Manila until you reach the NLEX gate in Balintawak. Our trip took 1 hour and 40 minutes from Makati to the gate of CSEZ. 4 Source: CSEZ Employment Status Report (as of August 31, 2006) 5 Source:same as above Access to Airport Investment Incentives Human Resource Others Monthly: US$$2,700-US$3,000 - T1(1.5Mbps): Upon Installation:US$250, Monthly: US$$2,000-US$2,400 International Airport within CSEZ (for both cargo and passenger) 6 airlines for passenger flight. 43 international regular flights weekly (mostly to/from Asian destinations) and 17 domestic regular flights weekly. UPS uses CSEZ as a hub airport in Asia TAX AND DUTY FREE IMPORTATION of machinery, equipment, raw materials, supplies and other articles including finished products. Tax incentives equivalent to PEZA 6 PREFERENTIAL TAX RATE fixed at five percent (5%) of Gross Income Earned 7. 3 to 6 years ITH through BOI Major Universities Holy Angel University University of the Philippines Angeles University 13 universities/colleges within 40Km In 2006, SM Shopping Mall opened just beside the CSEZ gate Hotels and Resorts Holiday Inn Hotel Mimosa Resort Monte Vista Villas Fontana Leisure Park Golf Courses Mimosa (35 holes) Fontana (9 holes), others Table 3:Major Locators in CSEZ engaged in ITS/ITES Company (Nationality) Employees Services Cybercity Teleservices (U.S.) 2,127 Call Center AOL Member Services 1,119 helpdesk Philippines (U.S.) Sutherland Global Services 1,000 8 BPO (Indian) IRMC Philippines (U.S.) Call Center Clark Data Center (Filipino) 230 Data Center Momentum Data East (U.S.) 244 ITO/BPO Among 372 companies in CSEZ, 27 are IT related companies and they employ about 4,400 employees as of August To name a few, AOL Member Services (about 1,100 employees) operating an based helpdesk service for their members since 1998 and Cybercity Teleservices (about 2,100 employees) providing call center services since 1999 are major locaters of CSEZ. In addition, Sutherland Global Services opened a new center in CSEZ in 2006 and plans to expand to 1,000 employees this year. IRMC also aims to expand to 600 employees by the end of this year. There is no presence of Japanese IT related company in 6 Refer to JETRO documents about details of tax incentives for PEZA registered companies _010_BUP_0.pdf 7 Gross Income Earned refers to gross revenues derived from any business activity, less cost of production or direct cost of services 8 Outlook for the end of Outlook for the end of 2006 Copyright 2006 JETRO Manila Center Page 5/8

6 CSEZ yet, but 29 Japanese companies mainly in manufacturing such as Nanox, Yokohama Tire, Sumidenso Automotive Technologies Asia Corp 10 are operating in CSEZ. The former U.S. air base airport in Clark has two 3.2km-long runways. It is now used for commercial purpose as Diostado Macapagal International Airport (see the picture below). UPS, an American logistics company is utilizing this airport as their hub in Asia. Six (6) low cost passenger airlines are flying total of 47 round-trip international flights in a week between Clark and key Asian cities such as Hong Kong, Seoul, Kuala Lumpur, Kota kinabalo, Singapore, Macao, and so on. In addition, 17 round-trip domestic flights, weekly, are also available between Clark and Manila, and Caticlan, Aklan,the gateway to a very popular beach resort island of Boracay. With the growing number of international and domestic passenger flights to and from Diostado Macapagal International Airport, it is expected that more tourists from Asian countries will arrive in Clark and boost the local economy % Lower Labor Cost and 37% to 64% Lower Office Rental Compared with Metro Manila Recent trend of ITS/ITES companies expansion to outside Metro Manila is driven primarily by saturation of human resource supply in Manila and companies desire to achieve further cost reduction. For example salary in CSEZ is lower by 23% and 29% for call center agents and programmers respectively than that of Metro Manila. Table4:Salary per IT Related Job Category in CSEZ 11 Job Category Entry Level In Php. Senior Level Manager / General Manager 22,500 51,000 Supervisor, Group Head, Senior Programmer 16,500 29,400 Analyst, Programmer 10,667 20,667 Team Leader, Senior Operator, Technician 10,000 15,000 Call Center Agent Customer Service Staff 7,745 11,500 Data Entry Staff, Operator, Transcriptionist 6,800 10,000 Table5:Comparison of Entry Level Salary in IT Related Jobs (Metro Manila and CSEZ 12 ) Metro Job Category Manila CSEZ Variance In Php Mimimum Wage % Programmer 15,000 10,667 29% Call Center Agent 10,000 7,745 23% For CSEZ used to be an U.S. military base before it was transformed to special economic zone, it has different ambience than other economic zones that are originally developed as industrial park or IT park. Its atmosphere is characterized by very spacious use of land and abundance of greens. What you feel in CSEZ is similar to U.S. bases in Japan such as Yokosuka and Yokota. Inside CSEZ, there is a place called Lily Hill where Goddess of Peace Shrine (in the right photo) was built in 1998 to commemorate 54th anniversary of the first departure of Kamikaze from the Clark Field during World War II and to promote goodwill, peace and friendship. Lily Hill is the place where the Japanese made their final defense against U.S. After the construction of the shrine, annual memorial services have been conducted every 25 th of October, the day first Kamikaze pilots flew from Clark in Source: CDC Marketing Department Business and Investments Update (as of August 2006) Colliers International Research, a real estate research firm published a report of office rental cost in Makati Commercial and Business District (CBD) in July According to this report, the highest rent in CSEZ is only Grade B level rent of Makati CBD. The highest rent in CSEZ (Php. 313 /sqm/ month) is lower by 64%, 56% and 37% than the high-end rent of Premium, Grade A and Grade B offices in Makati respectively. Table6 : Rent comparison between Makati City, Metro Manila and CSEZ 13 Range of Office Rental Location/Grade /sqm (in Php.) Makati/Premium 660 ~ 880 Makati/Grade A 440 ~ 715 Makati / Grade B 275 ~ 495 CSEZ 78 ~ Source:2006 CSEZ Salary Survey Report 12 Source: CSEZ: 2006 CSEZ Salary Survey Report, Metro Manila Programmer: Philippine Software Industry Association (PSIA), Metro Manila Call Center Agent: Contact Center Association of the Philippines (CCAP). Minimum wage includes Cost of Living Allowance (COLA). 13 Source of Makati rents are actual values in Colliers International Research Philippine Property Market Overview, as of the 2 nd QTR of Source of CSEZ rents are CDC. For comparison, we used CDC rents of US$1.50~US$6.0 US$1=Php (average FOREX in the 2 nd QTR ) Copyright 2006 JETRO Manila Center Page 6/8

7 3.3 IT Related Companies in CSEZ Unfortunately, there is no ITS/ITES company in CSEZ that is servicing Japanese market yet. In this report, however, we would like to feature three IT related companies based in CSEZ we visited. Those are a BPO company, a call center and a software development company and all are located in CSEZ Sutherland Global Services In July 2006, Sutherland Global Services (Indian company headquartered in New York) opened a BPO center in Clark as their second site in the Philippines following its first site in Makati which started in They provide services mainly in the area of customer management and technical support. They are actively conducting recruitment targeting to hire 1,000 employees by the end of this year. In the left photo is Ms. Evelyn E. Alinas, Sutherland s human resource development supervisor Wallem Innovative Solutions Wallem Innovative Solutions (45 employees) is a software solution subsidiary of Wallem, a ship management company headquartered in Hong Kong. Based on the requirement definition and specification sent from their Hong Kong counterpart, software engineers in Clark develop application software for e-procurement, ship management, ship condition reporting, etc. on Microsoft platform. The company is also contracted by a British ship inspection and rating company Lloyd Register (LR) to perform their system maintenance and enhancement. Additionally, Wallem launched a new initiative to consolidate their back office operations such as data management and accounting of Wallem group in the Philippines. In the photo are, Mr. Jun Vasay (left), project manager of LR support and Mr. Alexander L. Ramos (right) accounting and administration manager of Wallem Innovative Solutions in CSEZ Cybercity Teleservices (CTLL) CTLL became the first call center company in the Philippines certified with ISO27001/2005 (international standard for information security management practices) in August They provide customer relations management (CRM) services and data entry services for U.S. clients. CTLL has been operating in CSEZ since 1999 and currently employs about 2,500 people. In 2004, they expanded to Davao and they are currently considering Zamboanga as their next expansion location. In the photo are COO Ms. Almerita D. Leung (left) and Ms. Zen Quiazon (right) of public relations. Aside from call center business, CTLL went into a joint venture agreement with Shogee, a Hollywood based TV / movie production studio, to build, in Clark, the largest filmmaking support center in Asia. They plan to invest 100 million pesos first to build a movie production studio with about 500 employees, then to further develop the area as a tourist destination similar to the Universal Studio in Hollywood, California in the next three years. 3.4 Possibility for Japanese ITS/ITES Industry Currently no ITS/ITES company in CSEZ is engaged in business for Japan market. We must say it has low possibility for business matching in ITS/ITES industry between companies in CSEZ and Japan in the short term. Hiring Japanese language capable personnel in Clark area seemed to be far more difficult than in Metro Manila. However, for some Japanese companies that may need English language based services and operations that they wish to locate offshore, CSEZ seems to be an attractive candidate location to consider. Located less than an hour drive from Metro Manila, yet IT related labor cost is 20 % lower and office rent is almost half of Metro Manila. Basic infrastructure to operate ITS/ITES business is in place. According to neoit, an American offshore advisory firm, infrastructure in CSEZ is at par with Cebu and better than Davao (assessment in 2005). Both leisure and business facilities are well-developed and close to each other. Offers comfortable living environment with abundance of green. Additional infrastructure development is ongoing and logistics improvement can be expected in mid-and long term. Central Luzon Express Way funded by Japanese ODA is under construction to connect Clark and Subic and scheduled to be completed in North Rail 14 project 14 According to the article in BusinessWorld on October 22, 2006, North Rail 1 st phase (from Metro Manila to Malolos, Bulacan, about 32 km) has started its construction and scheduled to open in The plan of 2 nd phase from Malolos to Clark (48km) is not officially Copyright 2006 JETRO Manila Center Page 7/8

8 funded by Chinese ODA is planned to connect Manila and Clark. Berthaphil, a business park developer / operator in CSEZ is planning to build a new IT park Center@Clark (15 hectare) especially for IT/BPO companies in front of currently operational business park. ( Clark Development Corporation (CDC) Tel: Fax: RaffyGalvez@clark.com.ph JETRO Philippine IT Industry Update 2006-No. 5 End Inside CSEZ, there are three (3) vacant buildings that used to be duty free shops / restaurants and CDC is looking for BPO / call center locators. (See the photos below.) From the top, Building 5410 (about 10,000 sqm), N5415(about 8,000 sqm), 5418(about 2,000 sqm). (Photos are provided by CDC) For inquiry about CSEZ and visiting arrangements, you may contact Mr. Rafael Galvez, Marketing Director of CDC (rightmost in the photo). His contact information is as presented below. Mr. Rafael A.S. Galvez Manager. Marketing Department available. Copyright 2006 JETRO Manila Center Page 8/8