Lopez Holdings


What I'd like to discuss today are the various initiatives being undertaken in the IT sector and the new economy. This broad overview will give you an opportunity to see where you can potentially undertake investments in the Philippines.

Companies are accelerating their utilization of the unique competencies of Filipinos in pursuing new economy initiatives. The English speaking capability, large college graduate population, their innate creativity are key assets that are now propelling new business opportunities here. These companies recognize another inherent advantage of the Philippines: its central geographic location within the Asian Region and between the US and Australia makes the country an attractive outsourcing location.

The Philippines has been for many years a major manufacturing base for the semi-conductor industry. Texas Instruments, Motorola, Intel, Philips, are just a few of the many global firms with subassembly plants here. In the last few years, design is being added to the growing list of services in the electronics industry being done here, taking advantage of the ingenuity of the Filipino Engineer.

To further enhance these inherent Philippine advantages, the Philippine government has come out with different initiatives that enable the growth of the new economy. Telecom deregulation for one ensured that the Philippines is able to provide high bandwidth telecom facilities at very low cost such as good international radiotelephone and submarine cable services. Tax and other fiscal incentives are also available for companies venturing into this new space. All these efforts have slowly propelled the Philippines towards the new economy and by the year 2000, the META group in the US ranked our country Number 1 in Knowledge Workers.

In software, there are also more and more programming codes being written here for markets abroad. We all remember the "I Love You" virus created here and received worldwide notoriety, but it did highlight the Filipinos' capability in developing world class software.

Web services from hosting to web site design and development are increasing in scope, diversity, and sophistication in their offerings, with markets from all over the world.

Portals have been increasing their base over the last few years. PinoyCentral is growing rapidly and their range of services is increasing.

Consumer commerce is still at its infancy, but growing. Various initiatives from the many companies are providing opportunities for consumers to buy and trade products online. PinoyAuctions offers C2C buying and selling a la eBay.

Lakbay.net offers domestic travel information and reservations for transportation, and hotel accommodations can be booked here as well.

There are many more developments in the business to business (B2B) sector. Lately, we are seeing the establishment of a number of call centers. As more bandwidth that connect the Philippines to the rest of the world become available at much lower costs, we see exponential growth of call centers for customer service, telemarketing, help desks, outsourced or transported from companies in the Americas, Australia and Europe. An example is AOL's putting up its call center facilities using Filipino agents here in the country. Local companies' initiatives to support the Philippine's bid to become the preferred location for global outsourced service provision is also evident in the consolidation and then expansion of existing local call center operations to accommodate international transactions.

And last year, a consortium of 6 conglomerates formed a joint venture to set up an electronic B2B marketplace, called BayanTrade.com. This is the first B2B marketplace in the Philippines, and is affiliated with the Commerce One Global Trading Web. Since it started operations last November 2000, it has already conducted over 25 e-bidding events for products and services worth over P400 million, it has some 24 buyer companies and 100 suppliers on line, with over 6,000 line items on its electronic catalog, and growing rapidly each week.

To support this e-marketplace, a content factory using CI technology, has also been set-up in the Philippines. Before this, transforming a hard copy catalog into an electronic form suitable for e-marketplaces, can only be done in the United States, at high costs and long lead times. BayanTrade.com is now able to do this locally with local talents since last month. This full range of services such as content categorization, classification, normalization, rationalization, and publication is provided. The global standard - United Nations Standard Products and Services Codes - UNSPSC is used. Again, this content factory will be providing services to all electronic marketplaces, and specifically to those in Asia.

Related to this B2B marketplace, a payment gateway is also being developed with international and local banks. E-Logistics services are also in various stages of development, working with global companies like FedEx, TNT, UPS, as well as Philippine logistics providers. Thus, total end-to-end solutions will be provided from ordering to fulfillment to payment.

We are still in the early stages of development in the new economy, but we can see rapid growth in the near future.

For the consumer side, considering the growing penetration of cellphones and PCs, we can see much greater use of these media not only for e-commerce transactions, like buying items to paying their monthly bills, but also for eLearning as well - on-line or web-based learning.

With the use of text and graphics, exercises, testing, animations, simulations, audio and video sequences, peer and expert discussion groups and on-line mentoring, eLearning now provides short-term courses as well as entire degree programs for the global workforce searching for cost-effective ways to meet their learning needs.

Today, Ireland is the center for E-learning initiatives for corporate users. We believe that the Philippines with its workforce that speak English, understand technology and offer competitive labor prices, can become a major player in developing corporate clearing applications.

In summary, I think the future is quite bright for investors in the Philippines looking at new economy initiatives. One key example I'd like to leave you with. Our group made a presentation to a very large financial institution about call center operations - one factor that helped clinch the deal was the fact that throughout the people power revolution, absenteeism did not go up nor did any of our KPIs deteriorate. We take our work seriously after 5 pm - then we go to EDSA.

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Lopez Holdings Corporation 
16/F North Tower, Rockwell Business Center Sheridan, Sheridan St. corner United St., 1550 Bgy. Highway Hills, Mandaluyong City, Philippines

  • Trunkline: (632) 8878 0000
  • Fax: (632) 8878 0000 ext 2009