A recently concluded XMG Global Offshoring Leadership Study revealed that Davao City in the Mindanao Region of the Philippines will be a viable alternative site 3 years from now. This result is part of an ongoing study conducted between January to March 2008, which focuses on forecasting the global demand for offshoring and outsourcing services and the site optimization of emerging cities.
Despite periods of turmoil in the Mindanao Region, outsourcing vendors and captives who participated in the study are very bullish about Davao City primarily due to the area’s larger population of untapped qualified resources compared to Cebu City in the Visayas Region north of Mindanao. The study highlighted that competition in Cebu City is nearing saturation as the talent ramp-up continues.
Among others, the study highlighted the population of Davao City as considerably higher than other Tier-2 offshoring cities globally. In the Philippine context, Davao City’s population is 71% higher than Cebu City, 499% larger than Olongapo-Subic City 333% higher than Angeles-Clark City and 340% larger than Baguio City. The city’s estimated workforce is twice of Cebu, 9 times of Subic and 7 times of Clark and 6 times of Baguio. This has not even taken to account the manpower pool at the nearby cities and provinces of Davao City.
According to the study, Davao City has various educational institutions annually yielding a higher number of IT and BPO qualified graduates than Subic, Clark and Baguio by 689%, 278% and 40% respectively.
Citing previous years 2007 XMG Offshoring Risk and Infrastructure Index Reports, Davao City has been upgraded to a level C2 rating from its previous level D standing as the city emerges as a viable site for captive and outsourcing services. “Compared to other cities in the south, Davao City is very promising and it is seen to be the next generation city that would benefit large captives provided that risk issues are addressed properly”, concludes XMG Researcher Camille Lumbang.
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