Bernardo M. Villegas
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The Largest Foreign Exchange Earner (Part II)

          The IT-BPM industry is expected to contribute to more inclusive growth and the decongestion of urban centers like Metro Manila and Metro Cebu.  The Tier-2 or Second-Wave cities like Iloilo, Laoag, Dumaguete, Batangas City, Davao, Cagayan de Oro, Naga, Bacolod, Dagupan, and Baguio are attracting the leading investors in tertiary education to put up quality universities so that the needed knowledge workers can be more dispersed across regions.  The very aggressive infrastructure building program of both the public sector (budget for public works will increase to 7% of GDP) and the private sector (through the Public Private Program)  will also improve the accessibility of these urban centers outside the National Capital Region so that the leading real estate developers (Ayala, Megaworld, Double Dragon, Robinson, DMCI Homes, SMDC, and an increasing number of regional players) will provide the office spaces as well as residential facilities for the workers in this industry.  A distinctive trend under the Duterte Administration that I am closely monitoring is the increased number of enlightened governors and mayors who are implementing the Local Government Code of 1991 to partner with the private business sector to put up such vital infrastructures as toll roads, railways, seaports and airports without the need to get clearance from the NEDA.  These regions which are fortunate enough to have the right local government officials will be able to attract more of the new investors in the IT-BPM sector. 

         In a presentation during the U.S. road shows cited above, I learned from Mr. Jomari Mercado, former President of IBPAP, about the second-order effects from the direct employment of the IT-BPM sector.  Savings from the more than 1 million workers in 2015 amounted to US $1 billion.  Taxes paid were US $1.34 billion.  Consumption on food (especially in fast-food restaurants) was at US$ 2 billion; housing US$ 670 million; transport and communication US $ 335 million and others (clothes and gadgets) $1.3 billion.  It is clear that this sector will continue to be the strongest foundation for a consumer-led growth over the next six years, together with the remittances of close to $30 billion.  The consumer items specified in the report of Mr. Mercado were 1 billion Big Mac meals; 1.7 billion Chickenjoy dishes; 90,000 middle-class homes (costing P1 to 5 million each unit); 1.7 billion jeepney rides; 34 million P500 prepaid celfone cards; 34 million Bench jeans; and 6.7 million iPods.  From the taxes paid by the industry, some one million classrooms could be constructed and 7 billion days of nutrition program can be provided for the underprivileged.

         In a recent meeting of the Philippine Software Industry Association, its President Jonathan de Luzurriaga posed the most important challenge to the industry leaders.  As reported in this paper by Bernie Cahiles Magkilat, de Luzuriaga confirmed that the drivers of growth in this sector are its cost competitiveness, service-oriented culture and the growing market demand in the Asia Pacific region.  The opportunities, however, may not be realized if the industry is unable to upskill the talent pool.  As quoted by Mr. Magkilat, Mr. Luzuriaga remarked that “the real opportunity for growth lies in mid-skilled tasks and high-skilled tasks.  We need people who have strong analytical skills, strong grasp of logical reasoning.  Low-skilled employees have to be upgraded to mid-skilled workers, mid-skilled workers have to be upgraded to high-skilled workers.”  This was the very challenge addressed in a Human Resource (HR) Summit last September 2016 organized by IBPAP where I spoke about what can be done through industry-academe partnership. I pointed out that what happened to accounting education in the past should not be repeated in the preparation of future high-skilled IT professionals.

         Since I am a graduate myself of the old system of accounting education, I told the HR practitioners who attended the Summit that  there should be less focus on the technical skills (which are better learned on the job).  The industry should demand that universities give a lot more importance to the humanities (philosophy, literature, social sciences (especially economics and political science), the arts, history and languages.  These are the subjects that will develop analytical skills, logical reasoning, and the ability to relate the various human disciplines to one another.  These intellectual skills will enable the future IT professionals to more quickly adapt to advances in digital technology.  As the theme of the Summit stated under the topic “Getting Future Ready”, “The 21st century workplace is about speed, agility, and innovation, and how talent strategies can be designed to drive business results.  Shifting demographics, diversity and the increasing number of millennials in the workplace  are redefining the concept of teams, engagement models and organizational structure—as employees look for more than career development; they want a meaningful work environment and enriching employee experience, every day.” 

         Purely technical skills will not address these needs for human development.  The IT professionals must be exposed to whole-person development which can only be provided by a humanities-oriented education.  That is my experience of more than fifty years of teaching professionals in the field of business and government service.  For those already working in the industry who failed to get a strong humanities foundation in their university years, BPO and IT employers can develop in-house humanities programs that can help upgrade the analytical skills of their employees so that they can be “upskilled.”  In the 1970s, I was involved—together with professors from U.P. and other universities— in conducting humanities courses for the accountants of SGV.  I have witnessed how a good number of these young accountants then, who had been  given a narrow and overly technical training in their respective schools, were able to reach the top of the management ladder because of the exposure to the more humane disciplines.  I hope that the IT and BPO employers will keep this in mind in their in-house training programs for their existing employees.

         A final word on the threats to the industry posed by some radical union leaders.  Some months back, prominent columnist Boo Chanco of The Philippine Star wrote a series of articles about the possibility that leftist labor union KMU may cripple the BPO industry.  Fortunately, thanks to the warning given to them by Mr. Chanco, industry leaders (as far as I know) were able to nip the crisis in the bud.  HR practitioners in the sector have been a lot more conscious of the needs (both hygiene and motivational) of the workers in this industry.  There should be more efforts, however, in addressing the high attrition rates in the National Capital Region.  One of the obvious solutions is to locate more and more into the second-wave cities where young professionals are not as salary-obsessed as they are in Metro Manila (where a very slight increase in income offered by a competing employer may be enough to entice a worker to move elsewhere).  Another obvious solution is to show to the workers a sincere concern for their constant upgrading through in-company educational programs (including the one to which I referred above).  Part of these in-house programs must address the inculcation of values and virtues that can help the workers avoid the promiscuity that has caused a high incidence of AIDS-HIV among some of the workers. 

         Although there is absolutely no justification for the unexplained killings associated with the aggressive campaign of the present Administration to eradicate the alarming trend towards narcopolitics, it must be pointed out that a positive outcome for the industry of the possible reduction in the number of drug pushers is that it may lessen the greatest threat to the BPO workforce.  If I were a drug pusher, I would consider the BPO workforce as the most lucrative market to target.  These are young people, mostly  millennials who are well paid and are oozing with disposable income (most of them who are single still live with their parents).  They are also most vulnerable to the temptation of drug use because of their having to work at odd hours (9 p.m. to 5 a.m.) and may already be taking “uppers” to keep awake.  It would be a disaster if the BPO workforce would be infested with the evil of drug addiction.  That will really lead to the demise of the industry.    If the Government can effectively address the evil of “extrajudicial killings,” we can say that the Duterte Government has made the Philippines even more hospitable to the IT-BPM industry.  For comments, my email address is bernardo.villegas@uap.asia.