The information and communications technology (ICT) sector is one of the leading drivers of the Philippine economy and is actively supported and encouraged by the Philippines Govenrment. The ICT sector has been growing steadily for every year since 2000 and in 2011 had revenues around $11 Billion. The Philippines has surpassed India as the top business process outsourcing destination in the world particularly in voice based BPO. Some of the major Indian BPO companies are now offshoring to the Philippines.

Market overview

The ICT industry in the Philippines is dominated by Business Process Outsourcing (BPO). Practically all segments within the BPO market Contact centres are covered in the Philippines,including:

• Back office operations including:
  • accounting & bookkeeping
  • payroll processing
  • financial analysis
  • auditing
  • inventory control
  • purchasing
  • credit card administration
  • business data processing
  • supply chain management
  • engineering
  • architectural design
  • database activities
• Transcription services (medical & legal)
• Animation and gaming services
• Software development

Key opportunities

The ICT/BPO sector generated annual revenues of US$11 billion in 2011 and has been growing by an average of 30% for the last 10 years. The Philippines has now surpassed India in terms of contact centre operations and is now recognised as a prime destination for IT-enabled back-office operations for multinationals.

The country has world-class telecoms infrastructure for IT operations, including:

• Telecom facilities
• 26 IT Parks
• 73 IT centres

About 70% of all office buildings constructed in Metro Manila from 2000-2009 are BPO-ready. But the real asset of the Philippines IT-BPO industry is the availability of cost-effective, highly-skilled and service-oriented manpower to sustain this dynamic performance. The industry now employs more than 650,000 employees. The country churns out 450,000 college graduates per year and has a literacy rate of 92.6%. Another distinct advantage is that the Philippines is one of the top English-speaking countries in the world, a genuine edge in delivering IT-BPO services.

Because of the rapid growth in the IT-BPO industry, there is increased demand for computer hardware and improved telecommunications to provide broadband to the various IT buildings.

There is also significant demand for mobile technology and devices. Mobile penetration is at 96%. The Philippines is called the “texting capital of the world” as there are more than 1 billion text messages sent everyday in the country. This opens an opportunity for mobile solutions and applications. Mobile internet usage is growing significantly, offering a lucrative market for smart phones and applications. There are 33.6 million internet users, 27.6 million of which has presence in online social networking. The Philippines ranks 8th in the world & 2nd largest in ASEAN in terms of social networking.

Other business opportunities in the ICT industry are in the areas of:

• Software development – enterprise software/work management; SaaS
• Broadband technology and solutions;
• Mobile applications;
• Networking systems/solutions
• VoIP; IT Security
• E-learning materials, e.g. software & computer hardware for schools
• E-health and telemedicine/assisted living devices, e.g. remote monitoring devices, bedside computers; digital diagnostic devices.
• Intelligent buildings and smart technologies for building management and security
• Smart grids for the energy sector
• Transportation and traffic monitoring and control devices

The PBBC has helped a number of UK based IT product companies find distributors in the Philippines for their products. For further information how we cna help please contact Alistair Fulton.

For flights, hotels and tourist spots in the Philippines information, please see relevant pages

With the Philippines’ growing population of nearly 100 million and expanding middle class, and consumer-driven market, it presents significant opportunities for retailing of products and services. The Philippines is also one of the world’s largest English speaking markets, heightening the ease of marketing and doing business. Its Westernised culture makes the market open to imported brands and concepts.

Retail Market overview

The retail industry is driven by a large and young consumer market base and an expanding middle-class with relatively high disposable income who are receptive to Western concepts and fascinated by global brands. The volume of overseas workers’ remittances that hit a total of over USD20 billion in 2012 (up 7% from 2011) and the strong services sector (particularly in BPO) drive disposable income and spending.

Commercial space expansion has been an ongoing trend and “malling” is a favourite national pastime. The Philippines boasts three of the world’s largest malls based on floor area: SM North Edsa, SM Mall of Asia and SM Megamall. All of these are World Class Malls. The country’s retail sector is identified as one of the fastest-growing industries today.

Four major groups – SM Group, Ayala Corporation, Robinsons and Rustans, dominate the Philippine retail industry. The SM Group owns over 40 malls nation-wide, and is aggressively expanding not only their shopping malls but also their supermarket chains. Ayala Corporation continues to develop mixed-use developments, combining commercial, residential and retail space. Robinsons reports continued growth in rental revenues, showing increased uptake of retail space. Rustans, the Philippines’ largest luxury retailer, currently handles more than 70 foreign brands and are still expanding their portfolio.

Some of the UK brands now in the Philippines are Marks & Spencer, Debenhams, Burberry, Unilever, Arcadia Group (Topshop, Topman, Dorothy Perkins), Warehouse, Clarks, Paul Smith, Mothercare, Body Shop, Speedo, Hackett and Lush. Range Rover, Jaguar and Mini Cooper are also in the Philippines and have posted steady growth in sales.

Key opportunities

In terms of key opportunities, a number of Philippine retailers are looking for foreign brands that are already operating successfully in other Asian markets (especially in ASEAN region), but are not yet in the Philippines. In the fashion sector, major retailers continue to look for additional brands to bring in, catering to the Philippines’ top and mid-market segments, as well as to tourists. The growing hotel & tourism industry also offers a lucrative market, both for related products and services.

There are only a few UK household goods, giftware, and cosmetic products in the local market and consumers are looking for more. Food and drink items as well as dining concepts would also be in demand.

Getting into the market

• Doing business in the Philippines is highly relational. Formal and personal introductions would be a preferred way to enter the market, as would partnerships with established local companies for franchise or distribution.
• Appointments are required and should be made at least two weeks in advance.
• English is the language of business in the Philippines; and pricing is a key consideration.
• Experience of doing business in the region or in markets with similar demographics.
• The Philippine government encourages inbound foreign investment, designating economic zones and offering a wide range of incentives.

Contacts

The PBBC has its very own sector specialist in Manny Silverman, who is well known throughout the higher echelons of the UK retail sector. Manny has forged relationships with very senior people in the Philippines retail sector.

Market intelligence is critical when doing business overseas, and UKTI can provide bespoke market research and support during overseas visits though our chargeable Overseas Market Introduction Service (OMIS).

To commission research or for general advice about the market, get in touch with our specialists in country – or contact your local UKTI international trade team.

• Joyce Guzon Tolentino, British Embassy Manila.

Email: joyce.guzon@fco.gov.uk

For flights, hotels and tourist spots in the Philippines information, please see relevant pages