Cyberservices - Bureau of Local Employment - DOLE

DOLE Workforce Development Summit
Cyberservices – The Sectoral Picture
Damian “Dondi” Mapa
CICT Commissioner
March 2006
Commission on Information and Communications Technology

2005 State of the Nation Address
[In 2005] the government launched
the Philippine CyberServices
Corridor, an ICT belt stretching over
600 miles from Baguio City to
Zamboanga which is envisioned to
provide a variety of cyberservices at
par with global standards.
http://www.news.ops.gov.ph/sona2005-execsummary.htm

“Cyberservices” Defined
From Wikipedia: Cyberservices are services delivered over
cyberspace. Therefore, "cyberservices" is a catch-all phrase that
includes all of the following:
Teleservices (services delivered via phone, such as directory
inquiries or credit card cancellations),
E-Services (discrete transactions serviced via the internet, such as
a tax payment, an e-book download, or an e-learning session),
IT Outsourcing (IT or ICT services, such as remote network
diagnostics or system administration),
IT-enabled services or ITES (batched services, such as digital
animation or copy-editing or medical transcription),
ICT-enabled services (real-time services, such as having office
receptionists located remotely), and
Business Process Outsourcing or BPO services, such as loans
processing at a remote location.
http://en.wikipedia.org/wiki/Cyberservices

Cyberservices
Cyberservices
ICT
Services
ICT-Enabled
Services
E-Services
IT
Services
IT-Enabled
Services
Tele
Services

Philippine Cyberservices Industry
Total Employment
101,000 in 2004
163,000 in 2005
266,000 by 2006
403,000 by 2007
569,000 by 2008
795,000 by 2009
1,083,000 by 2010
Total Revenues
$1.3B in 2004
$2.1B in 2005
$3.5B by 2006
$5.2B by 2007
$7.2B by 2008
$9.7B by 2009
$12.8B by 2010
Source: CICT, BOI, BPA/P (See attached exhibits.)

Sidebar:
Hiring Rate vs. Absorption Rate
Hiring Rate
Company measure
Micro-economic
From 3% to 10%
Absorption Rate
Industry measure
Macro-economic
As high as 30%
1 2 3 4 5 6 7 8 9 10 15 20 25 30 35 40 45 50 55 60 70 80 90 100

THE PHILIPPINES’ LABOR SUITABILITY LEADS RUSSIA’S AND CHINA’S
BUT LAGS EASTERN EUROPE
“Of 100 graduates with the correct degree, how many could you employ if you had demand for all?”
Percent
Countries
Engineer
From McKinsey September 2005 Report: The Philippines’ Offshoring Opportunity
Finance/accounting
Generalist
Eastern
Europe
Russia
Czech
10
50
20
40
10
20
Poland
50
30
15
Hungary
50
50
30
Asia
China
10
15
3
Philippines
20
30
25
India
25
15
10
Malaysia
35
25
20
Latin
America
Brazil
Mexico
20
13
13
42* 25 35*
8
11
All suitability rates are empirically based on a total of >100
interviews with HR professionals working in each country
* Mexico is the only country where interview results (higher number) were adjusted
post mortem since interview base was thinner and risk of misunderstanding high
Source:
Interviews with HR managers, HR agencies and Heads of Global Resourcing centers; McKinsey Global Institute
Only for Doctors and Nurses, same suitability rate than for life
science researchers was assumed due to a lack of interviews
7

Philippines vs.
India and China
2003 Population (Mil)
Philippines
– 81.6
India
– 1,065
– 13 times bigger
China
– 1,292
– 16 times bigger
2003 BPO Employables*
Philippines
– 60,000
India
– 130,000
– 2 times bigger
China
– 160,000
– 3 times bigger
*IT, CS, and all Engineering (excluding Civil Engineering)
Source: McKinsey Global Institute

Workforce Mobilization
By Source
2.45m college graduates,
2006-2010 450-550k
4m Unemployed,
6m Underemployed 100-120k
1m Overseas Migrant
Workers 100-120k
1m Filipino Diaspora
100k
Career Shifters and
Retirees 100-150k
By Location
Tier 1: Metro Manila, Metro
Cebu, Metro Davao 550k
Tier 2: Baguio, Dagupan,
Cabanatuan, Tarlac, Sta.
Rosa, Batangas, Lipa,
Legazpi, Naga/CamSur,
Bacolod, Tacloban, Iloilo,
Dumaguete, Tagbilaran,
Cagayan de Oro, General
Santos 300k
Emerging: Tagbilaran,
Zamboanga, San Fernando
(La Union), others 150k
Philippine Cyberservices Corridor

PGMA on the PCC
President Gloria Macapagal-Arroyo
at the Philippine Investment Conference
March 9, 2005 at Lapu-lapu City, Cebu
“our cyberservices corridor
actually stretches 600 miles from
Baguio in Northern Luzon to
Zamboanga in Mindanao”
“it’s served by a $10B highbandwidth
fiber backbone and
digital network”
President Gloria Macapagal-Arroyo
at the Cebu ICT 2005 Conference
June 22, 2005 at Cebu City, Cebu
“Over the past 12 months call
centers have opened in Iloilo,
Cagayan de Oro, and Baguio. BPO
operations have sprung up in
Legaspi and Tacloban. Medical
transcription centers have been
established in Dumaguete, Davao,
and Naga.”
“the concept of the cyberservices
corridor is gaining ground!”
http://www.ops.gov.ph/speeches2005/speech-2005_mar09.htm
http://www.ops.gov.ph/speeches2005/speech-2005_jun22.htm

Benefits of the Corridor
Job Generation
– 1 million jobs by 2010
– A new middle class with strong purchasing power
Regional Development
– From Baguio to Zamboanga
– Changing the face of the nation
Locator Options
– Cost vis lifestyle vis scalability vis retention
Dispersion of Demand
– Minimize wage inflation and poaching/attrition

Issues for
Workforce Development
Common Themes
– Career Advocacy
– Curriculum Review and Faculty Retraining
– English Proficiency
Segment Specific Needs and Issues
– Animation (prepared by the ACPI)
– Software Development (prepared by the PSIA)
– Medical Transcription (prepared by the MTIAPI)
– Back Office Processing (prepared by the BPAP)
– Customer Contact (prepared by the CCAP)

Common Themes
Across Segments
Commission on Information and Communications Technology

Career Advocacy
Long-term career option
Prospects for advancement
Quality of life issue
Audience: career shifters, parents, highschool
students, college students
Issue: How do we get more Filipinos to be interested in a career in cyberservices?

Curriculum Review
Exposure to application of ICT in business
processes
Improved proficiency in keyboarding and
communication skills
Competency in productivity tools
Faculty retraining to deliver revised
curriculum
Issue: Are we preparing Filipinos to be knowledge workers in an information society?

English Proficiency
Media, especially TV, has de-emphasized
English
Lack of support for use of English in
family, society
Lack of English teachers
Five (5) “near hires” for every hire
Issue: What can we do to avoid job rejection due to lack of English proficiency?

Recommendations
College
English to be taught all 4
years.
1/3 of all English lessons
will be conversational
English.
Retrained English
teachers to run the
English Course for other
teachers throughout the
school term.
High School
1/3 of English classroom
time be dedicated to
conversational English.
English-only zones will be
imposed and enforced.
Retrained English
teachers to run English
courses for other
teachers throughout the
school year.

School Initiatives
Negros Occidental,
Camarines Sur,
CALABARZON: High
School and Elementary
English Teachers trained
in the use of Small-group
Communicative
Methodology for the
Conversational English
Classroom.
Mapua Institute of
Technology:
FuturePerfect helping to
develop their English
curriculum and to retrain
English teachers.
Asia-Pacific College: 7
English subjects, with one
on Voice and Accent
Training, supplied by
IBM-Daksh.

Assessment Initiatives
Future Perfect
– Uses certified assessors to rate ability to discourse
and interact using the Business Processing Language
Assessment Scales (BUPLAS)
Prospeak
– Uses computer-generated prompts to test and score
candidates calling into the Prospeak Testing System
BPA/P E4E (English for Employment)
– Uses a 5-level assessment tool for oral English
“Near hires” can opt to attend a 100- to 200-hour English training
program that will enable them to interview with BPO companies.

“English is Cool” Campaign
Short term: Call Center and BPO
– 250,000 to reach the required call center level
– Bring the next 1,000,000 to trainable level
Mid-term: trainers & professionals
– Train the Teachers programs
– Improve practice among professionals in service industries,
management positions
– Enroll 50,000 students or professionals into fast-track classes
Long-term: basic education
– More than 450,000 students graduate every year
– Millions in lower grades
Spearheaded by the European Chamber of Commerce

PEP Campaign
“Promoting English Proficiency” (PEP)
– MOA signed in October 2003
– Led by the American Chamber of Commerce with 11 member
federations and umbrella organizations; 45 project partners
PEP Components:
Certification
Training
Advocacy

PEP Initiatives
Certification
– Internationally recognized
tests;
– Test of English for
International Communication
(TOEIC): most widely used
international standard of
English proficiency in the
workplace; and
– Administered in corporations
and schools to employees,
teachers, and students.
Training
– Computer-assisted
learning using DynEd
Multimedia Solutions;
– 15 Computerized English
Language Centers
(CELCs) installed in
various schools and
companies with thousands
already trained; and
– Teacher training by the
Ateneo Center for English
Language Teaching
(ACELT).
PEP Website www.promote-english.org

Segment Concerns
1. Customer Contact
2. Animation
3. Software Development
4. Medical Transcription
5. Back Office Processing
Commission on Information and Communications Technology

Customer Contact Segment
As of 1 st Quarter, 2006
Still the fastest growing segment in the Philippines
Customer Contact Centers in the Philippines: 105
Total Full Time Employees: 112,000
Total Seats: 70,000
Estimated Revenues in 2005: US$ 1.6 B
With a Growth Rate for 2005: 75%

Contact Center Overview
YEAR
No . o f C a ll
C e n ters
E s t. No . o f
S e ats
E s t. No . o f
E m p lo y ee s
E S T . RE V E NUE
(US $ Millio n)
2 0 0 0 4 1 ,5 0 0 2 ,4 0 0 2 4
2 0 0 1 1 3 3 ,5 0 0 5 ,6 0 0 5 6
2 0 0 2 3 1 7 ,5 0 0 1 2 ,000 1 2 0
2 0 0 3 6 0 2 0 ,00 0 3 2 ,000 3 2 0
2 0 0 4 7 2 4 5 ,00 0 6 7 ,000 9 2 0
2 0 0 5 1 0 0 + 7 0 ,00 0 112,0 0 0 1 ,6 0 0
Key Players in the Country
Third Party Providers: Sykes, Convergys, PeopleSupport, Clientlogic,
ePLDT Parlance, ICT Group, Ambergris, Teletech, eTelecare, etc…
Captives: Dell, AOL, JPMorgan, Siemens, HSBC, AIG, IBM Daksh, etc..

Demand Side - Quantitative
Agent Qualifications (Mo. Sal. 10-25k)
– Educational Attainment: majority with 2-4
years college education; for technical support
- ICT-related courses
– Additional Training
• Pre-hire: English proficiency/interview
skills (100+ hours)
• Internal or outsourced: soft skills (40-80
hours of: accent neutralization, oral
fluency and accuracy, culture training,
customer service, business writing) ;
sales and telemarketing for outbound
• Internal: product training (2-6 weeks)
– Work Experience: n/a
– Skills/Competencies: English proficiency (oral
and written), computer literacy, customer
service aptitude
• Languages in demand: Spanish,
French, Mandarin, Cantonese, Korean,
Japanese, etc.Oral and written
proficiency a plus (commands salary
premium)
– Certifications
• TESDA Certification for Contact Center
Agent (planned)
– Others: willingness to work on shifts
Team Leader/Supervisor Qualifications (Mo. Sal.
20-35k)
– Educational Attainment: same as Agent
– Additional Training: same as Agent,
Leadership programs;
– Work Experience: typically 1-3 years as an
agent
– Skills/Competencies:
supervisory/coaching/leadership skills
– Certifications: n/a
– Others: willing to work in shifts; demonstrated
managerial maturity
Middle Manager Qualifications (Mo. Sal. 50-100k)
– Educational Attainment: same as Agent
– Additional Training: same as Supervisor; plus
Business Management training
– Work Experience: typically 2-3 years as
supervisors, or 1-2 years as managers
– Skills/Competencies:
supervisory/coaching/leadership skills;
account management skills; project planning
and management
– Certifications: n/a
– Others: willing to work in shifts; demonstrated
managerial maturity

Demand Side - Qualitative
Growth is expected to continue, with labor demand
peaking at 85,000 per year. However actual demand will
peak closer to 185,000 due to a large number (20%) of
workers exiting the segment each year.
Historical
Forecast
2004 2005 2006 2007 2008 2009 2010
Total Employees 64,000 112,000 179,200 259,800 337,700 422,100 506,500
Incremental Growth 48,000 67,200 80,600 77,900 84,400 84,400
Growth Rate 75% 60% 45% 30% 25% 20%
Factors Exited the Industry (20%) 35,800 52,000 67,500 84,400 101,300
Actual Demand 103,000 132,600 145,400 168,800 185,700
Expected Sources of Labor Pool
College Graduates 66,950 86,190 94,510 109,720 120,705
Non-degree 15,450 19,890 21,810 25,320 27,855
Career Shifters 20,600 26,520 29,080 33,760 37,140
103,000 132,600 145,400 168,800 185,700

Supply Side - Capacity
Last year (2005), approximately 45,000 college
graduates joined this segment. This year, 67,000
graduates are needed. If this year’s graduate pool is only
as good as last year’s, the 2006 shortfall is 22,000.
Shortfalls are also predicted for 2007-2010 unless drastic
changes are undertaken to improve screening rates and
interest levels.
2006 2007 2008 2009 2010
How many graduates are needed? 66,950 86,190 94,510 109,720 120,705
How many graduates with the right degree? 302,914 314,817 326,721 338,626 350,527
How many pass initial screening? 35% 40% 40% 45% 45%
106,020 125,927 130,688 152,382 157,737
How many are interested? 42% 42% 45% 50% 60%
44,528 52,889 58,810 76,191 94,642
What is the forecast shortfall? (22,422) (33,301) (35,700) (33,529) (26,063)

What needs to be done?
Career Advocacy to Parents, Students, Career
Shifters (to increase interest level)
English Proficiency Assessment and Pre-hire
Training (to increase passing rate)
Life Adaptation Seminars and Lifestyle Support
e.g. 24x7 Support Services such as Sports Gyms,
Banks, Dental and Health Care, Entertainment (to
reduce exit rate)
Keyboarding Proficiency
Supervisory Skills Training
Industry Certification
Improved English Faculty/Training in Schools

Segment Concerns
1. Customer Contact
2. Animation
3. Software Development
4. Medical Transcription
5. Back Office Processing
Commission on Information and Communications Technology

Animation Industry
As of 1st Quarter, 2006
– Total animation studios in the country: 40
– Twenty (20) years in the Philippines
– Total Full Time Employees: 4,500
– Est Revenues in 2005: US$ 54 Million
– With a Growth Rate in 2005: 38%
Capabilities:
2D, 3D
Interactive Gaming (PC Gaming & Console Games)
Medical Animation
Visualization
e-Learning Courses

Animation Industry
Key Players in the Country:
Holy Cow! Animation, Artfarm Asia, Digital Exchange, Top Draw
Animation, Toei Animation, Top Peg Animation and Creative Studio,
Creative Asia,Geebo Digital, Toon City, etc…
Flicks Outsourced to the Philippines:
Tom & Jerry, The Jetsons, Adams Family, Scooby Do, The Mask,
Dragonball Z, Lilo & Stich, The Incredibles, Dexter Laboratories,
Power Puff Girls, 1 Piece, etc…

Demand Side - Quantitative
Historical
Forecast
2004 2005 2006 2007 2008 2009 2010
Total 3,000 4,500 6,800 9,900 13,900 18,800 24,400
Incremental 1,500 2,300 3,100 4,000 4,900 5,600
Growth Rate 50% 50% 45% 40% 35% 30%
Factors Exited the Industry (5%) 340 500 700 940 1,220
Actual Demand 2,640 3,600 4,700 5,840 6,820
By Type of Skill
Entry-level Animators 100 60% 1,571 2,143 2,798 3,476 4,060
TP/IB Checkers 20 12% 314 429 560 695 812
Key/BG Checkers 20 12% 314 429 560 695 812
Key Animators 20 12% 314 429 560 695 812
Directors 3 1.8% 47 64 84 104 122
Production Managers 1 0.6% 16 21 28 35 41
Production Assistants/Coordinators 2 1.2% 31 43 56 70 81
Trainors 2 1.2% 31 43 56 70 81
Total 168 100% 2,640 3,600 4,700 5,840 6,820

Demand Side - Qualitative
Entry-level Animator Qualifications (Mo. Sal. 8–12k)
– Educational Attainment: preferably high
school graduate
– Additional Training: in-house course for inbetweening,
clean-up (3 – 6 months)
– Work Experience: n/a
– Skills/Competencies: drawing, reading
– Certifications: n/a
– Others: willing to work overtime and under
tight deadline pressure
Key Animator Qualifications (Mo. Sal. 15–25k)
– Educational Attainment: at least high school
graduate
– Additional Training: enhanced in-betweening
– Work Experience: 3-5 yrs experience as inbetweener
– Skills/Competencies: advanced inbetweening,
storyboard interpretation,
character development, communication skills
– Certifications: n/a
– Others: willing to work overtime and under
tight deadline pressure
TP/IB Checker Qualifications (Mo. Sal. 10–12k)
– Educational Attainment: preferably high
school graduate
– Additional Training: n/a
– Work Experience: at least 2-3 yrs as painter,
in-betweener
– Skills/Competencies: interpretation of
exposure sheets, instruction sheets
– Certifications: n/a
– Others: recognized for quality work, willing to
work overtime and under tight deadline
pressure
Key/BG Checker Qualifications (Mo. Sal. 10–12k)
– Educational Attainment: preferably high
school graduate
– Additional Training: n/a
– Work Experience: at least 2-3 yrs as painter,
in-betweener
– Skills/Competencies: storyboard
interpretation, communication skills, works
well with director, exposure to acting/theater
arts, sensitivity to cultural nuances
– Certifications: n/a
– Others: recognized for quality work, willing to
work overtime and under tight deadline
pressure

Demand Side - Qualitative
Director Qualifications (Mo. Sal. 60–100k)
– Educational Attainment: n/a
– Additional Training: in-house on-the-job
training with proficiency exam
– Work Experience: 10 years in the media arts,
preferably with experience as assistant
director
– Skills/Competencies: exceptional storytelling
skills and ability to interpret script
– Certifications: n/a
Assistant Director Qualifications (Mo. Sal. 40–60k)
– Educational Attainment: n/a
– Additional Training: in-house on-the-job
training with proficiency exam
– Work Experience: 5 years in the media arts,
preferably with experience as checker
– Skills/Competencies: communication skills,
checking skills, knowledge in cinematography
– Certifications: n/a
Production Manager Qualifications (Mo. Sal. 50–
80k)
– Educational Attainment: preferably with
college degree in engineering, mass
communications, business management
– Additional Training: industry seminars on
management and supervision
– Work Experience: with at least 1 yr
experience as production assistant
– Skills/Competencies: people management,
leadership and communication skills
– Certifications: n/a
Production Assistant Qualifications (Mo. Sal. 8–
12k)
– Educational Attainment: preferably college
graduate
– Additional Training: in-house training on
process (1 month)
– Work Experience: n/a
– Skills/Competencies: computer literacy,
communication/correspondence skills
– Certifications: n/a

Demand Side - Qualitative
Editor/Compositor Qualifications (Mo. Sal. 20–30k)
– Educational Attainment: n/a
– Additional Training: use of software editing tools
– Work Experience: 2-3 years cinematography and filmmaking
– Skills/Competencies: computer literacy, communication
skills, knowledge in cinematography and film-making
– Certifications: vendor-based
Digital Ink-and-Paint Qualifications (Mo. Sal. 8–12k)
– Educational Attainment: n/a
– Additional Training: use of software tools
– Work Experience: n/a
– Skills/Competencies: computer literacy
– Certifications: n/a

Supply Side - Composition
Animators: w hat %age of entry-level animators sourced this year w ill be 2006 2007 2008 2009 2010
College animation courses, not necessarily w /degree 10% 10% 10% 10% 10%
Fine arts and related courses, not necessarily w /degree 80% 55% 60% 60% 60%
Graduates of 3rd party animation course 0% 30% 30% 30% 30%
Career shifters, internal training needed 10% 5% 0% 0% 0%
Prod Mgrs: w hat %age of production managers sourced this year w ill be 2006 2007 2008 2009 2010
Promoted from w ithin, addl training needed 10% 10% 10% 10% 10%
Other college degree 20% 20% 20% 20% 20%
Fine arts, masscom and related courses, not necessarily w /degree 30% 30% 30% 30% 30%
Career shifters, internal training needed 40% 40% 40% 40% 40%

Supply Side - Capacity
2006 2007 2008 2009 2010
How many graduates with the right degree? 3,000 3,300 3,630 3,993 4,392
How many pass initial screening? 25% 30% 35% 40% 45%
750 990 1,271 1,597 1,977
How many from 3rd Party Training Schools? 500 650 975 1,463 2,194
What is the total forecast supply? 1,250 1,640 2,246 3,060 4,170
How many animators are needed? 1,571 2,143 2,798 3,476 4,060
What is the forecast shortfall? (321) (503) (552) (416) 111
Need to increase level of enrollment
through career advocacy as well as quality
of graduates to increase passing rate.

Supply Side Constraints
Content-related Issues
– Quality of graduates: will they be acceptable to the industry?
– Industry plays a role in checking on final output of the students.
Faculty-related Issues
– Where to find enough good teachers/trainors?
– Mix between trainors of Western style vs. Anime style
Facility-related Issues
– HW/SW affordability for animation workstations
Regulatory Concerns
– Knowledgeability of TESDA personnel who assess/certify
animation schools
– Strict implementation of faculty certification
Others
– Brain drain (to countries such as India, Singapore, Australia, US)

What needs to be done?
Short-term
– Industry checking of students’ final projects (industry/academe)
– Industry-based curriculum development of schools
– Tracking of animation training centers & schools
– Facilities for student projects/simulations
– Establish ACPI Training & Production Center
– Capability building of in-house management skills
– Tracking of skills advancement within the industry
– Career Advocacy Campaign
– Conference with TESDA RDs and PDs
Medium-term
– Trainor Development Program
– Benchmarking with international standards e.g. Gobelins
Long-term
– Reduce “brain drain”

Segment Concerns
1. Customer Contact
2. Animation
3. Software Development
4. Medical Transcription
5. Back Office Processing
Commission on Information and Communications Technology

Software Development Industry
As of 1st Quarter, 2006
– Software Development Companies: 300
– Total IT professionals: 14,000
– Estimated Revenues in 2005: US$ 204M
– With a Growth Rate for 2005: 20%
– New Developments: Philippine Software
Industry Association (PSIA) 2010 Fly High
Program
Key Players in the Country: Accenture,
Headstrong, Microsoft, IBM Solutions,
Jupiter Systems, Oracle, ADTX
Solutions, Gurango, Sun
Microsystems, Intel Microelectronics,
NEC, etc…

FLY HIGH:
PHILIPPINE SOFTWARE 2010
F Fifty software development companies aligned
with international quality standards
L Locate operations of 50 foreign software
development companies in the Philippines
Y Yes to Brand Philippines
H
and Retention
I
Hire 100,000 new software development workers
and support improved Recruitment, Retooling
Increase intellectual compliance rate for software
by 3% per year
G Government software investment to increase 10%
per year
H Have the social and physical infrastructure in
place to support the industry’s goals

Demand Side - Quantitative
Historical
Forecast
2004 2005 2006 2007 2008 2009 2010
SW Development - primarily Export 10,000 12,000 15,600 20,300 26,400 34,300 44,600
SW Development - Domestic & in house 21,000 25,000 31,300 40,700 54,900 71,400 92,800
Total 31,000 37,000 46,900 61,000 81,300 105,700 137,400
Incremental 6,000 9,900 14,100 20,300 24,400 31,700
Growth Rate (primarily Export) 19% 30% 30% 30% 30% 30%
Growth Rate (Domestic & in house) 25% 30% 35% 30% 30%
Factors Migration Abroad (5%) 2,300 3,100 4,100 5,300 6,900
Actual Demand 12,200 17,200 24,400 29,700 38,600

Demand Side - Qualitative
Programmer Qualifications (Mo. Sal. 15-20k)
– Educational Attainment: College Degree in IT, Math,
or Engineering or equivalent Business IT Degree
– Additional Training: 6-12 weeks of Internal Training
– Work Experience: n/a
– Skills/Competencies: aptitude for programming,
analytical skills, communication skills
– Certifications: n/a

Supply Side - Composition
SUPPLY SIDE COMPOSITION
Programmers: w hat %age of programmers sourced this year w ill be 2006 2007 2008 2009 2010
College grad w ith ICT-related degree, no addl training needed 5% 5% 10% 10% 10%
College grad w ith ICT-related degree, internal training needed 50% 50% 40% 40% 40%
College grad w ith other degree, internal training needed 35% 35% 35% 35% 35%
Career shifters, internal training needed 10% 10% 15% 15% 15%
100% 100% 100% 100% 100%
SUPPLY SIDE CAPACITY 2006 2007 2008 2009 2010
No. of programmers
from ICT-related degree 6,710 9,460 12,200 14,850 19,300
other degree 4,270 6,020 8,540 10,395 13,510
career shifters 1,220 1,720 3,660 4,455 5,790
12,200 17,200 24,400 29,700 38,600

Supply Side - Capacity
2006 2007 2008 2009 2010
No. of programmers
from ICT-related degree Total Graduates 42,047 43,700 45,352 47,004 48,657
Absorption Rate 15% 15% 20% 20% 25%
from other degree Total Graduates 58,611 60,914 63,217 65,521 67,823
Absorption Rate 5% 5% 10% 10% 15%
from career shifters 1,220 1,720 3,660 4,455 5,790
Total Supply 10,458 11,321 19,052 20,408 28,128
Surplus/(Shortfall)
from ICT-related degree (403) (2,905) (3,130) (5,449) (7,136)
other degree (1,339) (2,974) (2,218) (3,843) (3,337)
(1,742) (5,879) (5,348) (9,292) (10,472)

Supply Side Constraints
Content-related Issues
– Lack of content that covers the entire life cycle, e.g. focused on coding
instead of on software engineering, thus necessitating internal training cost
of 6-12 weeks
Faculty-related Issues
– Faculty not updated on latest development theories/techniques; or they lack
industry exposure and soft skills
Facility-related Issues
– Exposure to tools on version management, source code control, etc.
– Extra facility for student projects
Regulatory Concerns
– Local/National Certification is no longer a high-priority area
– Market forces currently dictate the kind of certification needed, i.e.
internationally-recognized or vendor certification
Others
– Poaching from abroad especially at experienced/skilled levels
– 15% absorption rate, need to increase to 25%

What needs to be done?
Short-term
– Career advocacy programs for career shifters and students/parents
(PSIA, DOLE)
– Annual skills inventory and job survey (PSIA)
Medium-term
– Increase absorption rate from colleges
• Review syllabi for new IT curriculum for implementation by June 06 and
to establish mechanism for continuous review (PSIA, PSITE &
CHED/TPITE)
• Improve instructor skills (PSIA, PSITE & CHED/TPITE, CICT)
• Institute higher screening standards for IT-related degrees (PSIA,
CHED)
• Industry internships and OJTs (PSIA to develop template/standards)
– Incubator facilities for student projects, e.g. Ateneo Wireless
Competency Center, CICT Digital Media Arts Lab (CICT, DOST)
Long-term
– Reduce “brain drain” through incentives (DOF, DOLE)

Segment Concerns
1. Customer Contact
2. Animation
3. Software Development
4. Medical Transcription
5. Back Office Processing
Commission on Information and Communications Technology

Medical Transcription Services
As of 1st Quarter, 2006 (Medical Transcription)
• Total MT Firms: 50
• Total MT Schools: 13
• MT Professionals: 5,500 employed
• Estimated Revenues in 2005: US$ 70 Million
• With a Growth Rate for 2005: 80%
• Performance Level: 98 – 99% accuracy rate,
with a turnaround time of 12 to 24 hour
Key Players in the Country:
– eData Services, SPI Technologies, SVI Corporation,
Medscribe Asia, Transkripsyo Inc., Total Transcription
Solutions, Inc., Dictation Source, Pilipinas Data
Contracts Corporation, etc…

Demand Side - Quantitative
Historical
Forecast
2004 2005 2006 2007 2008 2009 2010
Total 4,000 5,500 13,800 24,800 42,200 71,700 114,700
Incremental 1,500 8,300 11,000 17,400 29,500 43,000
Growth Rate 38% 150% 80% 70% 70% 60%
New Jobs By Type of Skill
Transcriptionists 6,225 8,250 13,050 22,125 32,250
Editors 2,075 2,750 4,350 7,375 10,750
Trainors 110 46 58 76 100

Demand Side - Qualitative
Transcriptionist Qualifications (Mo. Sal. 10-12k)
– Educational Attainment: college degree
– Additional Training: MT course, 3-6 mos.
– Work Experience: n/a
– Skills/Competencies: computer literate,
proficiency in writing & listening, familiarity
with medical terminologies
– Certifications:n/a
– Others: willing to work in shifts
Editor Qualifications (Mo. Sal. 15-20k)
– Educational Attainment: college degree (with
preference for allied health degrees)
– Additional Training: Editor course (usually inhouse)
– Work Experience: typically 2-3 years as MT
– Skills/Competencies:
supervisory/coaching/leadership skills
– Certifications: n/a
– Others: willing to work in shifts
Facilitator Qualifications (Mo. Sal. 10-15k)
– Educational Attainment: college degree
– Additional Training: MT course
– Work Experience: typically 1-2 years
as MT
– Skills/Competencies:
coaching/leadership/communication
skills
– Certifications: n/a
Lecturer Qualifications (150-450/hour)
– Educational Attainment: college degree
(medical degree required for medical
subjects)
– Additional Training: MT and Editor
– Work Experience: n/a
– Skills/Competencies: communication
skills
– Certifications: n/a

Supply Side - Composition
Transcriptionists: w hat %age sourced this year w ill be 2006 2007 2008 2009 2010
Nurses direct from college, internal training needed 2% 2% 2% 2% 2%
Nurses w ho graduated from a 3rd party MT course 3% 3% 3% 3% 3%
Allied health w ho graduated from a 3rd party MT course 45% 40% 40% 40% 40%
Other college grad w ho graduated from a 3rd party MT course 30% 35% 35% 35% 35%
Career shifters w ho graduated from a 3rd party MT course 20% 20% 20% 20% 20%
Editors: w hat %age of editors sourced this year w ill be 2006 2007 2008 2009 2010
Promoted from w ithin, addl training needed 80% 80% 80% 80% 80%
Transferred from another MT company 20% 20% 20% 20% 20%

Supply Side - Capacity
2006 2007 2008 2009 2010
No. of transcriptionists that can be trained by
Internal HR of MTSOs
3rd Party MT Training Schools 7,500 9,800 12,700 16,500 21,500
No. of editors that can be trained by
Internal HR of MTSOs 1,245 1,650 2,610 4,425 6,450
3rd Party MT Training Schools 750 980 1,270 1,650 2,150
Surplus/(Shortfall)
Transcriptionists 1,275 1,550 (350) (5,625) (10,750)
Editors (80) (120) (470) (1,300) (2,150)
Need to open up large number of MT schools
offering entry level courses in order to meet
forecast number of graduates this year (7,500).

Supply Side Constraints
Content-related Issues
– For Transcriptionists, industry has standard defined
– For Editors, no standard defined
Faculty-related Issues
– No major issues
Facility-related Issues
– No major issues
Regulatory Concerns
– Registration of schools with TESDA esp. in provinces
Others

What needs to be done?
Short-term
– Conference with TESDA RDs and PDs
– Career Advocacy Campaign (DepEd, CHED, MTIAPI)
– Aggressive Marketing of Philippine MT Industry (DTI,
DFA, MTIAPI)
Medium-term
– Assessment and Certification for MTs and Editors
(TESDA, MTIAPI)
– Self-Regulation of Quality (MTIAPI)

Segment Concerns
1. Customer Contact
2. Animation
3. Software Development
4. Medical Transcription
5. Back Office Processing
Commission on Information and Communications Technology

Business Processing
(Back Office Operations)
As of 1st Quarter, 2006
– No. of Service Providers: 60
– Total Full Time Employees: 22,500
– Estimated Revenues in 2005: US$ 180 Million
– With a Growth Rate for 2005: 50%

Key Players
Captives: AOL, AIG BPSI, Chevron Texaco,HP, HSBC, Procter &
Gamble, Flour Daniel, Henkel Financial Services, Deutsche Bank,
Citibank Crescent Services, Shell Shared Services, Manulife,
Alitalia, Watson Wyatt, etc…
Third Party Providers: Accenture, American Data Exchange, SVI
Corp, SPI Technologies, DAKSH eServices, The Environments
Collaborative, Eximius BPO, BayanTrade Dotcom, etc…

Range of Services
Current Services:
- Accounting and bookkeeping - Legal Transcription
- Account maintenance - Litigation Support
- Accounts receivable collection - Content Development
- Accounts payable administration - Contract Summarization
- Payroll processing - Publishing
- Asset management - Travel Services Back Office
- Financial analysis and auditing - Loan processing
- Inventory control and purchasing - Health Insurance
- Expense and revenue reporting - General Insurance
- Financial reporting - Sales and marketing
- Human resources administration - Tax reporting
- Customer Management - Financial leasing
- Credit card administration - Transaction management
- Factoring and stock brokering - Sourcing and Procurement
- Revenue management - Logistics
- Transaction processing - Disaster recovery
- Business data processing - Business Intelligence
- Database management - Network management
- Supply chain management - Warehouse and inventory Mgmt
Arising Services: (KPO)
- Market Research and Analysis
- Intellectual Property Mgmt

Demand Side - Quantitative
Historical
Forecast
2004 2005 2006 2007 2008 2009 2010
Total Employment 15,000 22,500 40,500 72,900 123,900 210,600 337,000
Incremental 7,500 18,000 32,400 51,000 86,700 126,400
Growth Rate 50% 80% 80% 70% 70% 60%
Factors Exited the Industry (10%) 4,100 7,300 12,400 21,100 33,700
Actual Demand 22,100 39,700 63,400 107,800 160,100
By Type of Skill
Human Resources 30% 6,630 11,910 19,020 32,340 48,030
Finance/Accounting - Transaction 35% 7,735 13,895 22,190 37,730 56,035
Finance/Accounting - Complex 5% 1,105 1,985 3,170 5,390 8,005
Engineering 12% 2,652 4,764 7,608 12,936 19,212
ICT Operations 9% 1,989 3,573 5,706 9,702 14,409
General 5% 1,105 1,985 3,170 5,390 8,005
Supervisors 4% 884 1,588 2,536 4,312 6,404
Total Workforce to be Developed 100% 22,100 39,700 63,400 107,800 160,100

Demand Side - Qualitative
HR Analyst Qualifications (Mo. Sal. 13-18k)
– Educational Attainment: mostly HR-related college
degree e.g. Psychology, HR Applications; other
degrees such as Industrial Engineering
– Additional Training: from 4 – 12 weeks training on
industry practices such as compensation and benefits
policies, etc.
– Work Experience: n/a
– Skills/Competencies: analytical skills, oral and written
language proficiency (advanced English),
communication skills
– Certifications: n/a
– Others: willing to work on shifts

Demand Side - Qualitative
Fin Analyst Qualifications (Mo. Sal. 13-18k)
– Educational Attainment: mostly Business-related
college degree; Accounting preferred for bookkeeping;
Political Science, Economics
– Additional Training: mostly internal 4 – 12 weeks on
specific business processes, e.g. Portfolio Management
– Work Experience: n/a
– Skills/Competencies: quantitative/analytical, computer
literacy, oral and written language proficiency
(advanced English), communication skills
– Certifications (not mandatory): Certified Public
Accountant, Chartered Financial Analyst (for complex)
– Others: willing to work on shifts

Demand Side - Qualitative
Engineering Qualifications (Mo. Sal. 18-25k)
– Educational Attainment: mostly Engineering-related
college degree; Business degree also
– Additional Training: mostly internal 4 – 12 weeks on
specific business processes, e.g. Procurement
Management
– Work Experience: n/a
– Skills/Competencies: quantitative/analytical, computer
literacy, oral and written language proficiency
(advanced English), communication and negotiation
skills
– Certifications: n/a
– Others: willing to work on shifts

Demand Side - Qualitative
ICT Operations Qualifications (Mo. Sal. 13-18k)
– Educational Attainment: mostly ICT-related college
degree; Engineering degree also
– Additional Training: 4 – 12 weeks on specific technical
operations processes, e.g. Network Administration
– Work Experience: n/a
– Skills/Competencies: quantitative/analytical, computer
literacy, oral and written language proficiency
(advanced English), communication skills, process
aptitude
– Certifications: Vendor-specific as needed
– Others: willing to work on shifts

Demand Side - Qualitative
Generic Qualifications (Mo. Sal. 12-15k)
– Educational Attainment: mostly college degree
– Additional Training: 4 – 12 weeks internal
– Work Experience: n/a
– Skills/Competencies: quantitative/analytical, computer
literacy, oral and written language proficiency
(advanced English), communication skills
– Certifications: n/a
– Others: willing to work on shifts

Additional Qualifications
Languages in demand
– Spanish, French, Mandarin, Cantonese, Korean,
Japanese, etc.
– Oral and written proficiency a plus (commands salary
premium)
Engineering/Architecture Licenses
– Under GATS, mutual recognition allows licensed
Filipinos to practice their profession in countries that
have cross-certification agreements with the
Philippines

Supply Side for HR
HR: w hat %age of HR analysts sourced this year will be 2006 2007 2008 2009 2010
College grad w ith HR-related degree, internal training needed 70% 70% 70% 70% 70%
College grad w ith HR-related degree, and 3rd party training 20% 20% 20% 20% 20%
College grad w ith other degree, internal training needed 5% 5% 5% 5% 5%
Career shifters, internal training needed 5% 5% 5% 5% 5%
Source of HR analysts
from HR-related degree Total Graduates 16,243 16,881 17,519 18,158 18,796
Absorption Rate 25% 25% 25% 25% 25%
from other degree Total Graduates 128,602 133,655 138,709 143,763 148,816
Absorption Rate 1% 1% 1% 1% 1%
from career shifters 1,105 1,985 3,170 5,390 8,005
Total Supply 6,452 7,542 8,937 11,367 14,192
Total Demand 6,630 11,910 19,020 32,340 48,030
Surplus/(Shortfall)
from HR-related degree (1,906) (6,499) (12,738) (24,567) (38,528)
other degree 955 741 436 (179) (913)
Total Surplus/(Shortfall) (952) (5,758) (12,302) (24,746) (39,441)

Supply Side for Finance/Acctg
FA: what %age of Fin/Acctg analysts sourced this year will be 2006 2007 2008 2009 2010
College grad w ith FA-related degree, internal training needed 70% 70% 70% 70% 70%
College grad w ith other degree, internal training needed 20% 20% 20% 20% 20%
Career shifters, internal training needed 10% 10% 10% 10% 10%
Source of F/A analysts
from FA-related degree Total Graduates 128,602 133,655 138,709 143,763 148,816
Absorption Rate 10% 10% 10% 10% 10%
from other degree Total Graduates 55,752 57,943 60,134 62,325 64,515
Absorption Rate 1% 1% 1% 1% 1%
from career shifters 884 1,588 2,536 4,312 6,404
Total Supply 14,302 15,533 17,008 19,312 21,931
Total Demand 8,840 15,880 25,360 43,120 64,040
Surplus/(Shortfall)
from FA-related degree 12,860 13,366 13,871 14,376 14,882
other degree 558 579 601 623 645
Total Surplus/(Shortfall) 13,418 13,945 14,472 15,000 15,527

Supply Side for Engineering
Eng'g: w hat %age of Eng'g analysts sourced this year will be 2006 2007 2008 2009 2010
College grad w ith Eng'g-related degree, internal training needed 70% 70% 70% 70% 70%
College grad w ith other degree, internal training needed 30% 30% 30% 30% 30%
Source of Eng'g analysts
from Eng'g-related degree Total Graduates 55,752 57,943 60,134 62,325 64,515
Absorption Rate 5% 5% 5% 5% 5%
from other degree Total Graduates 128,602 133,655 138,709 143,763 148,816
Absorption Rate 0.5% 0.5% 0.5% 0.5% 0.5%
Total Supply 3,696 4,042 4,461 5,129 5,891
Total Demand 2,652 4,764 7,608 12,936 19,212
Surplus/(Shortfall)
from Eng'g-related degree 2,169 1,786 1,232 98 (1,257)
other degree 378 192 (67) (575) (1,177)
Total Surplus/(Shortfall) 2,547 1,977 1,164 (477) (2,434)

Supply Side for ITO
ITO: what %age of ITO analysts sourced this year will be 2006 2007 2008 2009 2010
College grad w ith ICT-related degree, internal training needed 90% 90% 90% 90% 90%
College grad w ith other degree, internal training needed 5% 5% 5% 5% 5%
Career shifters, internal training needed 5% 5% 5% 5% 5%
Source of ITO analysts
from ICT-related degree Total Graduates 42,047 43,700 45,352 47,004 48,657
Absorption Rate 5% 5% 5% 5% 5%
from other degree Total Graduates 55,752 57,943 60,134 62,325 64,515
Absorption Rate 1% 1% 1% 1% 1%
from career shifters 99 179 285 485 720
Total Supply 2,759 2,943 3,154 3,459 3,798
Total Demand 1,989 3,573 5,706 9,702 14,409
Surplus/(Shortfall)
from ICT-related degree 2,102 2,185 2,268 2,350 2,433
other degree 558 579 601 623 645
Total Surplus/(Shortfall) 2,660 2,764 2,869 2,973 3,078

Supply Side Summary
HR: Urgent need for HR-related degree
F/A: Supply of Fin/Acctg is more than needed;
opportunity to market more of these type of skills
Engineering: Current supply seems adequate,
but as sub-segment matures, this may turn into
a shortfall quickly
IT Operations: Supply of ITO is more than
needed; opportunity to market more of these
type of skills

Supply Side Constraints
Content-related Issues
– Current emphasis on auditing; should be on bookkeeping
– Need more exposure to automated systems, e.g. ERP, HRIS
Faculty-related Issues
– Lack of Faculty proficiency in English which results in subject
matter not being taught in English
– Teachers must be able to teach automated applications
– Brain drain of qualified faculty
Facility-related Issues
– More automated applications rather than manual ledgers
Regulatory Concerns
– Strict implementation of English as medium of teaching
Others
– Reluctance to work night shift
– Roughly 25% attrition (10% involuntary, 15% voluntary)

What needs to be done?
Short-term
– Approach of teaching English should shift to ESL (DepEd/CHED,
Academic Organizations e.g. COCOPEA, PAASCU, PASUC)
– Advocacy (Industry, Media)
• Support “English is Cool” campaign
• Career track advocacy to college students
• Course of study advocacy to high school students (and parents)
– Use of automated transaction systems such as ERP, HRIS (with
appropriate faculty retraining) wherein industry partners with
academe (COCOPEA, PAASCU, PASUC w/BPAP)
Medium-term
– Development of curriculum for specific needs of the BPO
industry for entry level and middle-management (CHED,
CEDFIT, BPAP)
• Separate course focused on bookkeeping and transaction-keeping
rather than auditing
• Need for industry to establish standards

Exhibits
1. Cyberservices Revenue
2. Cyberservices Workforce Forecast
3. Cyberservices Job Generation
Breakdown, 2006-2010 Forecast
4. Summary of Tertiary Graduates
Commission on Information and Communications Technology

Cyberservices Revenue (Estimates in US$ M, based on Workforce Forecast)
2004 2005 2006 2007 2008 2009 2010
Customer Contact 920 1,610 2,580 3,740 4,860 6,080 7,290
Growth 75% 60% 45% 30% 25% 20%
Back Office 120 180 320 580 990 1,680 2,700
Growth 50% 78% 81% 71% 70% 61%
Software Development 170 204 265 345 465 604 740
Growth 20% 30% 30% 35% 30% 23%
Medical Transcription 42 70 150 280 470 800 1,280
Growth 67% 114% 87% 68% 70% 60%
Animation 39 54 71 89 125 169 220
Growth 38% 31% 25% 40% 35% 30%
Engineering Design 17 26 39 68 109 164 230
Growth 53% 50% 74% 60% 50% 40%
Other Data Transcription 20 31 43 60 85 110 143
Growth 55% 39% 40% 42% 29% 30%
Legal Transcription 2 3 5 8 12 17 22
Growth 50% 67% 60% 50% 42% 29%
Digital Content 2 6 11 22 45 84 168
Growth 200% 83% 100% 105% 87% 100%
TOTAL 1,332 2,184 3,484 5,192 7,161 9,708 12,793
Growth 64% 60% 49% 38% 36% 32%
Source: CICT, BOI, BPAP and its Member Organizations

Cyberservices Workforce Forecast (Based on Industry Reports for 2004-2005)
2004 2005 2006 2007 2008 2009 2010
Customer Contact 64,000 112,000 179,200 259,800 337,700 422,100 506,500
Growth 75% 60% 45% 30% 25% 20%
Back Office 15,000 22,500 40,500 72,900 123,900 210,600 337,000
Growth 50% 80% 80% 70% 70% 60%
Software Development 10,000 12,000 15,600 20,300 26,400 34,300 44,600
Growth 20% 30% 30% 30% 30% 30%
Medical Transcription 4,000 5,500 13,800 24,800 42,200 71,700 114,700
Growth 38% 151% 80% 70% 70% 60%
Animation 3,000 4,500 6,800 9,900 13,900 18,800 24,400
Growth 50% 51% 46% 40% 35% 30%
Engineering Design 2,000 2,800 4,200 6,700 10,700 16,100 22,500
Growth 40% 50% 60% 60% 50% 40%
Other Data Transcription 2,000 3,000 4,200 5,900 8,300 10,800 14,000
Growth 40% 40% 40% 30% 30%
Legal Transcription 300 450 700 1,100 1,700 2,400 3,100
Growth 50% 50% 50% 40% 30%
Digital Content 200 500 1,000 2,000 4,000 8,000 16,000
Growth 150% 100% 100% 100% 100% 100%
TOTAL 101,000 163,000 266,000 403,000 569,000 795,000 1,083,000
Growth 61% 63% 52% 41% 40% 36%
New Jobs Generated 62,000 103,000 137,000 166,000 226,000 288,000
Source: CICT, BOI, BPAP and its Member Organizations

Cyberservices Job Generation Breakdown, 2006-2010 Forecast
2005 2006 2007 2008 2009 2010
Customer Contact 48,000 67,200 80,600 77,900 84,400 84,400
Back Office 7,500 18,000 32,400 51,000 86,700 126,400
Software Development 2,000 3,600 4,700 6,100 7,900 10,300
Medical Transcription 1,500 8,300 11,000 17,400 29,500 43,000
Animation 1,500 2,300 3,100 4,000 4,900 5,600
Engineering Design 800 1,400 2,500 4,000 5,400 6,400
Other Data Transcription 1,000 1,200 1,700 2,400 2,500 3,200
Legal Transcription 150 250 400 600 700 700
Digital Content 300 500 1,000 2,000 4,000 8,000
New Jobs Generated 62,750 102,750 137,400 165,400 226,000 288,000
Source: CICT, BOI, BPAP and its Member Organizations

Summary of Tertiary Graduates per Year
Discipline Group 2006 2007 2008 2009 2010 2011 2012
Architectural and Town Planning 3,100 3,222 3,344 3,466 3,588 3,710 3,831
Business Admin and Related 128,602 133,655 138,709 143,763 148,816 153,870 158,924
Engineering and Technology 55,752 57,943 60,134 62,325 64,515 66,706 68,897
Fine and Applied Arts 1,706 1,773 1,840 1,907 1,974 2,041 2,108
Humanities 5,954 6,188 6,422 6,656 6,890 7,124 7,358
Law and Jurisprudence 2,894 3,008 3,122 3,236 3,349 3,463 3,577
Mass Comm and Documentation 6,543 6,800 7,057 7,314 7,571 7,828 8,085
Mathematics 2,859 2,971 3,083 3,196 3,308 3,420 3,533
Information Technology 42,047 43,700 45,352 47,004 48,657 50,309 51,961
Medical and Allied 31,400 32,634 33,868 35,102 36,336 37,570 38,804
Natural Science 5,814 6,042 6,271 6,499 6,727 6,956 7,184
Social and Behavioral Science 16,243 16,881 17,519 18,158 18,796 19,434 20,072
*Total Cyberservices-inclined 302,914 314,817 326,721 338,626 350,527 362,431 374,334
Other Disciplines 151,904 157,874 163,843 169,812 175,783 181,753 187,723
Grand Total 454,818 472,691 490,564 508,438 526,310 544,184 562,057
Source: Commission on Higher Education