Experience Excellence: The Philippine Advantage June 2011

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Voice – Based Services Suppliers

Homegrown Suppliers

Banking, Financial Services and Insurance IT and Software Services

NASSCOM’S Top BPOs Shared Service Centers / Captives

Who Are With Us

Maintenance, Repair, Overhaul Services Clinical Research Outsourcing

HR Outsourcing Legal Process Outsourcing

Engineering Services Outsourcing Creative Services Outsourcing

Medical Services Outsourcing

Who Are With Us

Philippine IT-BPO industry size 2006–2010; US$ billion

~50% ~26%

~19%

~26%

x% YoY Growth

FTEs = full-time employees, YoY = year on year 1 Philippines IT-BPO market as percentage of global offshore services market, in revenue terms

Sources: BPAP; Everest analysis

# FTEs (~‘000) 240 300 370 440 525

Global share1 5% 6% 6% 7% 8%

Impact over 5 years Contribution to GDP

4%–5% of annual GDP

Employment generation

Largest private sector new job creator   350,000 direct and   Up to 0.7–1.0 million

indirect jobs

Foreign exchange earnings

Significant export impact   3rd-largest export

earner based on net value added

Growth of Next Wave Cities™

Catalyzed growth of 10+ Next Wave Cities™ adding over 50,000 jobs

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8%

640

~24%

FTEs % inc. fr YA

Revenue (US$B)

% inc. fr YA

Voice BPO 344,000 23% 6,100 21% Non-voice BPO/KPO 101,750 18% 1,628 30% ITO 44,962 27% 725 28% Transcription 14,000 8% 102 11% ESO 10,600 -12% 201 -12% Animation 8,640 8% 142 18% Game development 1,230 92% 7 56% TOTAL FTEs 525,182 24% 8,905 26% Source: ACPI, BPAP, CCAP, GDAP, HIMOAP, PSIA (2011). All rights reserved.

6 Source: CHED 2010; CIA World Factbook 2010

Suitability rates are empirically based on a total of >80 interviews with HR professionals working in each country

Number of college degree graduates

2009 Annual growth

Medical and natural sciences, allied fields

132,244

Business, accounting, and related fields

107,272

Social and behavioral sciences, education

68,764

Engineering and architecture 50,734

IT-related and mathematics 47,928

Fine arts, masscom, humanities 12,269

TOTAL Tertiary level 469,654 5.8%

Pop Labor force Unemp rate Literacy

World 6,768M 3,179M 8.7% 82.0%

India 1,130M 509M 7.8% 61.0%

China 1,330M 814M 4.3% 91.6%

Brazil 201M 102M 8.1% 88.6%

Philippines 100M 38M 7.5% 92.6%

  Abundant labor force of 38 million   Over 450,000 college graduates per year   Large pool of accounting and business

graduates   English proficiency   Affinity with Western culture   Customer service orientation   Highly trainable   Cost effective   High level of commitment and loyalty

Supplier presence across industry verticals1

Wide range of industry-verticals serviced Captives of 60+ Fortune 1000 firms

# FTEs servicing (’000s)

75+

# Firms

50+

40+

40+

25+

15+

25+

Banking and financial services

MDR and healthcare

Telecom, travel, energy, and media

BFSI = banking, financial services, insurance; MDR = manufacturing, distribution, retail 1 Per Everest-O2P survey of ~200 firms across the Philippines IT-BPO industry

Sources: BPAP database; survey results

Mature Credible Emerging

Eastern Europe: Established near-shore destination

China: Domestic and APAC centric scale and capabilities

Mexico, Brazil, Columbia, Chile, and Argentina: Evolving rapidly as near-shore base to drive penetration in North America

Philippines: Reaching #1 in voice BPO (330K+ FTEs) #2 in non-voice/IT-BPO (200K+ FTEs)

India: Industry leading scale and capabilities Voice: 350K+ FTEs Non-voice IT-BPO: 1.4M+ FTEs)

Egypt, Morocco, and South Africa: Significant government-backed push to target UK and Europe Source: Everest analysis

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Expertise in diverse BPO and KPO functions: Finance/HR/Publishing/Supply Chain/Legal/Medical

- Accounting and bookkeeping - Legal Transcription - Account maintenance - Litigation Support - Accounts receivable collection - Content Development - Accounts payable processing -Contract Summarization -Fund adm/reconciliation - Editing, Sub-titling, Translation - Payroll processing - Publishing - Retail banking support - Health Services revenue cycle - Asset management - Travel Services Back Office - Financial analysis and auditing - Credit/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

-  Market Research and Analysis -  Intellectual Property Management -  Account Risk Management - Equities/Portfolio research & analysis

copyright 2009: Business Processing Assoc of the Philippines. All rights reserved

Cost competitive, almost as much as India, across service segments   One of the lowest cost destinations for English work, and for non-

voice and IT services work   Relatively minimal inflation and currency volatility indicate

continued cost competitiveness in future

Large, scalable talent pool—next only to India, China   Top-3 global location in

graduate pool size   Third-largest talent pool

in delivery of voice BPO, F&A, and IT services

  Amongst the largest experienced talent pools

Costs

Relatively minimal risk perceptions, primarily directed at geopolitical concerns   High-quality physical and

social infrastructure   Favorable investment

climate   Limited risks to talent

scalability   Natural disasters in certain

regions and sporadic political incidents are key concerns

Source: Everest experience

Transmission Backbone Networks

  PLDT Digital Fiber Optic Network (DFON)

  Globe Telecom Fiber Optic Backbone Network (FOBN)

  TelicPhil (BayanTel) Nationwide Digital Transmission Network (NDTN)

Cable Landing Stations

  Ballesteros, Cagayan   Tanza, Cavite   Nasugbu, Batangas   Bauang, La Union DAVAO

CDO DAUIN

TALISAY LAHUG LILOAN SAN REMIGIO ROXAS

SAN JOSE MAMBURAO

NASUGBU

BACOOR ERMITA SAMPALOC

CADIZ

MANTICAO ILIGAN

CANERO AURORA MAKATI

ZAMBOANGA

GEN. SANTOS

BACOLOD

SORSOGON BATANGAS

CABADBARAN

COTABATO PAGADIAN

BUTUAN

MAASIN

TACLOBAN ORMOC

PAGBILAO PILI LEGASPI

CALBAYOG DONSOL

NAGA

DUERO TAGBILARAN

BALLESTEROS

ILOILO

LAOAG

SUBIC BAGUIO SFLU

DAGUPAN CABANATUAN

VIGAN

TARLAC URDANETA

MASBATE

BANATE

CAUAYAN TUGUEGARAO

SOLANO

MARIBOJOC TALISAY

TGN-IA

AAG

EAC

APCN2

C2C

Ilocos Cagayan Valley

Central Luzon

Southern Tagalog Bicol

Western Visayas

Central Visayas

Eastern Visayas

Western Mindanao Northern Mindanao

Southern Mindanao Central Mindanao

Cordillera

Davao

Iloilo

Metro Cavite

Bacolod

Cagayan de Oro

Santa Rosa

Super cities have >15,000 IT-BPO workers Large cities have a potential capacity of 10,000–15,000 Mid-sized cities 5,000–10,000

Another 20-plus cities offer a potential capacity of <5,000 FTEs each

Angeles/Clark

Bulacan Lipa

Manila

•   Next  Wave  Ci+es™  

Cebu

12 Copyright ©2011: Business Processing Association of the Philippines. All rights reserved.

Dumaguete

Baguio

• Business  environment  •  Leading  the  industry  priori1es  behind  govt  policy  and  legisla1ve  agenda  –  fiscal        

incen1ves,  data  privacy,  IP  protec1on,  cybercrime,  Labor  Code  amendments,  DICT  •  Suppor1ng  investors  with  set-­‐up  through  “industry  roundtable”  

•  Due diligence assistance •  Business registration

facilitation •  After care service

Government – BOI, PEZA, LGUs

•  Provide end-to-end quality assurance for investors setting up operations in the Philippines

•  Assist investors with government approvals

Legal consulting

•  Provide overview on talent pool based on competency requirements

•  Deliver recruiting and training quantity and quality requirements

Staffing consultants/Advisors

•  Provide industry overview •  Organize site visits and

meetings with vendors & govt

BPAP advisors

•  Provide best options available that fit requirements

•  Provide end-to-end service support

•  Complete delivery and after-dales service

Infra – Telco, Property, Hardware

Investor Assistance Group

13 Copyright ©2011: Business Processing Association of the Philippines. All rights reserved.

Road Map 2016: Driving to Global Leadership

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