Olongapo SubicBay BatangGapo Newscenter

Friday, September 05, 2008

ICT to spur growth in LGU

As the industry rapidly grows, more ICT Tier 2 cities such as Subic are ramping up marketing campaign geared towards attracting ICT locators . .

A newly released report said local government units (LGUs) should turn to ICT to address the employment needs of their citizens in the face of a projected economic slowdown for the country.

ICT research firm XMG said it expects the total ICT industry employment in the country to hover around 340,000 to 360,000 before the current year ends.

Of this figure, more than 70 percent will be located in Metro Manila, the research firm said.

XMG estimates an additional 310,000 to 340,000 people will be needed through 2010 to meet ramp-up demand as expansion plan and global pipeline deals close.

LGUs, it said, are now faced with an opportunity to attract large ICT operators by providing tax breaks, infrastructure, and telecommunications development and customized incentives to lure both captives and non-captives.

Based on the latest XMG Employment Lifestyle Index conducted in Q2 2008, an average agent working in the ICT industry would have a basic salary ranging from R13,000 to R21,000 depending on experience, type of skill, account, and site location.

Using a typical medium operator that employ between 1,000 to 3,999 FTE as an indicator, XMG estimates an infusion of R42 million into the local economy per month from basic salaries alone.

The index also show that 42 percent of the income is spent on food, 14 percent on housing, 12 percent on education, 11 percent on clothing, 6 percent on miscellaneous spending such as gifts and contributions, 8 percent on various recreation, 2 percent on transportation & communication, and 5 percent on others.

From the 42 percent on food spending, more than one-third is spent on fastfood, restaurant, and bar as agents have a relatively higher disposable income compared to a regular day job in the Philippines.

Benedict Ferrer, research manager at XMG, said LGUs should begin to realize the potential economic impact of IT, call center, and BPO companies in their city as a prime mover of development and progress or risk loosing opportunity such as sustainable livelihood provided by the industry directly or indirectly.

"LGUs must first understand the nature of the industry and various underlying variables imperative to attract and market their respective city," Ferrer added.

As the industry rapidly grows, more ICT Tier 2 cities such as Cebu, Baguio, Clark, Subic, and Davao are ramping up marketing campaign geared towards attracting ICT locators, XMG noted.

Most LGUs are now taking this opportunity as a viable source of constant employment in the area as more companies are now forced to relocate or expand outside Metro Manila where cost are manageable and where talent competition is less.

The report recommended that LGUs must understand from the outset the needs of the industry and align their strength and incentives in consummating a strategic partnership with the industry to maximize the growing opportunity the ICT industry have to offer. By MELVIN G. CALIMAG - Manila Bulletin

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