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Outsourcers unscathed after recent floods

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To the west of the Philippines' capital, Manila, lies Laguna De Bay, a colossal freshwater lake that has just become the site of what can loosely be called maritime services startups.

The new businesses sprung up weeks ago after the annual monsoon hit the Philippines harder than usual. The lake filled, then spilled into surrounding suburbs.

Why are we mentioning this in The Register? The answer is that The Philippines is becoming a technology hub. Business process outsourcing (BPO) firms providing outsourced tech support services for the likes of Microsoft have well and truly discovered the nation.

One lure is the fact that the large English-speaking population has an accent more palatable to western ears than Indians'. Low wages are another attraction for business, especially technology manufacturers such as Foxconn, which is eyeing off a local plant.

Many of those low-waged workers reside near the shores of Laguna De Bay, says Chris Moriarty, an Australian (and former technology journalist) who now runs a BPO* in Manila. Flat Planet, as his company is called, employs 43 Filipinos who, thanks to the wonders of modern telephony, have Australian phone numbers and jobs as software developers, accountants and other roles.

When the floods hit Manila, Moriarty didn't have a problem. Flat Planet's offices are in Makati City, a business district 15 metres above sea level. The company's offices have triply-redundant optic fibre links to the rest of the world, and they all stayed up all the way through the floods. One outage turned out to be a software glitch, rather than anything to do with local telcos.

“What hurt us was attendance rates,” Moriarty explains, as some staff were cut off from the office as the already-torturous commutes most Manilans face became impossible to navigate. Some telecommuted, but Moriarty says “You cannot telecommute when your house is under water. Some of our staff were wiped out.”

Flat Planet hired a four wheel drive, and driver, and did the rounds of staff's homes. The company then rented several hotel rooms to house staff, to keep the business running and help families to cope.

Moriarty wasn't alone in that effort as the Business Processing Association of the Philippines donated what he called “a bucket of money and aid packages to 1400 families.” The Philippines Army provided logistics to distribute the aid, and Moriarty says they then “put me in a six wheeler, gave me a few boys with machine guns and drove to the deep flood areas.”

“There are still people living there,” he said. “The flood will stay for two months because it takes a long time for the lake to drain.”

Which is where the maritime services startups come in.

“Kids have made boats with tyres and bits of wood, they ferry people around who don't want to get their feet wet. There's a whole economy that has sprung to life out there. It's like a scene from Waterworld.”

But Moriarty says those scenes aren't typical of the Philippines.

'All this stuff you see on TV of people in rice paddies is not what the country is about. There are people in the provinces living like that, but there is a whole side the rest of the world does not see. There is a bright, energetic, cosmopolitan middle class.”

“People here might earn $600 a month but they all have smartphones. Being connected to the world is a really absolutely vital thing for Filipino people.” It will likely become more so, as the 60% of the population 100-million strong population is under 15 years of age. There are also graduates a-plenty: Moriarty says the nation is producing them at a rate of 600,000 a year.

He therefore feels the nation is poised to play a larger role in the wider world, and the technology industries. “There are 630,000 BPO jobs here now and 400,000 of those are in voice. The other 230,000 do everything else.”

The government has awoken to the potential of tech jobs to fuel the economy, calling it out in an Investment Priorities Plan. Officials rushed to point out that BPOs and manufacturing, which tends to be located outside Manila to avoid its horror traffic, were not disrupted by the floods. Officials are still sending out re-assuring messages, as shown by the Mayor of Makati taking pains to point out that BPOs face no risks in the city.

Moriarty says another reason to promote the industry is as an alternative to the guest worker jobs millions of Filipinos perform across Asia.

“Imagine being a Filipino maid in Saudi Arabia,” he says. “BPO has a humanitarian as well as an economic benefit.” ®

* The acronym BPO is widely used as a noun to describe an outsourcing company in the BPO industry.

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