Benchmarking the Philippines’ IT Competitiveness

Posted on Posted in About Us, Stories

Business Week recently unveiled sponsored benchmark of 2008 IT competitiveness Index, where the Philippines ranked higher than most of its counterparts such India, China, Vietnam, Indonesia and Russia. Suffice to say, Philippines has emerged as one of the major players in the global outsourcing industry specifically on the strength of the following indicators:Philippines Outsourcing Workforce

  • Overall business environment: 0.10
  • IT infrastructure: 0.20
  • Human capital: 0.20
  • Legal environment: 0.10
  • R&D environment: 0.25
  • Support for IT industry development: 0.15

With a score of 29.8, which is way below the score of this year’s still most competitive country, the United States with 74.6, the Philippines has so much catching up to do. However, no matter the ranking, the country is taking the proverbial baby steps towards the right direction, as the information technology—particularly in software development—and communication are some of the key areas where Philippines can compete with other global players.

Let’s see how the country fares in some of the criteria used by the magazine’s Economist Intelligence Unit.

Overall Business Environment

The country posted a very positive 7.5% GDP growth in 2007, and if not for the recent challenges in the global financial market, the country could have posted at least 5.5% growth in the economy; the Philippine economy has been growing by a positive 5% since 2001. From a low of $1,400 purchasing power parity at the start of the decade, the Philippines enjoys some $3,400 PPP as of 2007.

IT Infrastructure

Thanks to increasing demand from businesses and consumers, local telcos have aggressively pursued broadband development in the past two years. Some $800 million have been spent so far by the country’s leading telcos on improving the infrastructure, which also rides on the popularity of mobile communication in the country. Mobile use enjoys an overall subscriber base of 67% of the population.

Human Capital

The US-based consulting firm, Meta Group ranks the Philippines as the top player in knowledge-based jobs and workers worldwide. The country boasts of a huge army of software engineers, content developers, creative designers, and professionals in accounting and finance, legal, and health care. The Philippines’ emphasis on English as the official mode of instruction is finally paying off, as the Philippines has the third largest English-speaking population.

Support for IT Developments

The government is one of the biggest supporters of the IT industry, thanks to the possibilities that it can provide in creating jobs and making the country globally competitive in business process outsourcing. Last year, the government unveiled regional ITC centers outside Metro Manila, allowing further access to a vast talent pool and tax breaks for businesses that set up offices in assigned economic zones.

The Philippines shows so much promise in offshoring that even India-headquartered outsourcing companies, such as Tata Consulting and Infosys have opened offices in Manila. The local association of outsourcing businesses aims to increase its workforce size to one million and earn revenues of up to US$13 billion by 2010.

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