THE PHILIPPINESYour Partner in Global Expansion

A document to introduce the possibilities for outsourcing of customer support and other business processes to the Philippines

OUTLINE

I. Why outsource business processes?

II. The specific opportunities in the Philippines

III. Why the Philippines? Advantages

IV. Join the other MNCs

V. Invitation

I. Why outsource business processes?

REASON # 1As businesses develop and establish themselves as a supplier of quality, high-

end products, there arises a parallel need to extend better customer care and customer support.

REASON # 2Stiff competition means products are chosen not only because of price, quality,

nor features, but also because of the nature of support and close relationship extended by the company to its customers.

REASON # 3As businesses expand abroad and become global companies servicing different

markets, capability to connect with customers using different languages, especially English, becomes important.

REASON # 4To be as competitive as possible, companies need to focus on their core

strengths and businesses where they are most efficient, and then outsourcing their other backroom processes to others who can do it better and cheaper becomes an effective solution.

II. The specific opportunities in the Philippines

The Philippines is the world-leader in these outsourcing services:

III. Why the Philippines? The advantages of locating with us

Young Labor force of 32 million, all fluent in English, and highly educated

The Swiss International Institute for Management Development (IIMD) study in 2004 rates the Philippines among 60 countries in the Asia Pacific:

#1 in the availability of skilled workers (out of 33 million total labor force)

#3 in the availability of senior managers #4 in the availability of IT professionals #10 in the availability of accounting and financial skills #10 in the availability of expat middle management #12 in qualified engineers.

Available Quality Human Resources

World-class English Proficiency Strong customer service orientation Long tradition of excellence in the professions Highly trainable Fast learning curve Cost efficient Universal cultural adaptation, affinity to

Western culture High level of commitment and loyalty

Available Quality Human Resources

… Lowest IT Salary among 32 countries for same skills

Country Total Cash Country Total Cash Country Total Cash Country Total Cash

23 Venezuela $17,600 Brazil $25,400 Brazil $43,000 Taiwan $64,400

24 Brazil 16,400 Venezuela 24,900 Poland 41,000 Argentina 61,400

25 Argentina 14,100 Argentina 21,800 Argentina 35,800 Poland 58,500

26 Malaysia 13,100 China 19,100 China 31,700 China 58,400

27 China 12,400 Malaysia 17,600 Indonesia 26,500 Indonesia 44,600

28 Bulgaria 10,400 Indonesia 15,800 India 24,500 India 39,000

29 India 9,700 India 15,400 Vietnam 24,000 Bulgaria 34,200

30 Indonesia 9,400 Bulgaria 14,200 Malaysia 23,700 Malaysia 31,900

31 Vietnam 8,300 Vietnam 14,100 Bulgaria 22,100 Vietnam 28,700

32 Philippines 7,900 Philippines 11,600 Philippines 17,000 Philippines 24,900

Source: Mercer Human Resource Consulting (2003/2004 IT Functions Salary Differential Worldwide Report)

2003/2004 Ten Lowest-Paying Countries (Gross Pay)

RANK

TEAM LEADER (Sr. Professional)

SUPERVISOR (Experienced Prof.)

MANAGER (Specialist)

SENIOR MANAGER (Expert)

Robust, Redundant International Networks and Connectivity

Expanding Multi-media Infrastructure 24x7x 365 support operation Aggressive lead times in provisioning of

international leased circuits: 30-45 days

Deregulated Telecommunications Industry

More stable, robust, highly scalable due to numerous fiber optic landings/links

Cost of bandwidth has gone down by 70% in the last 4 years (From US$ 14,000 in 2001 to today’s rates of US$ 2,000 per month for E1 lines to U.S.)

Presence of Dedicated IT Parks Right in the Center of Business Districts

Reliable Infrastructure Support

11 – – Global Market Rents Report by CB Richard Ellis, Aug 2005 2 – Global Office Real EstateHighlights by Colliers Int’l., June 2005

Reliable Infrastructure Support REAL-ESTATE

Low rates with liberal lease agreement terms; mostly administered by international property management companies (JonesLangLasalle, FPDSavills, CB Richard Ellis, Colliers, etc.)

Total Occupation Cost for Prime Office Space in CBD (US$/ft2/year)11

Mumbai Shanghai Singapore Manila

Rent/Lease Rate 56.43 40.49 33.71 13.43 - Typical Lease Terms 9 yrs. 2-3 yrs. 3 yrs. 3-5 yrs. - Typical Months Free 1 mo. 1-2 mos. 1 mo. 3 mos.Existing Inventory (ft2)22 8,865,605 33,768,893 45,725,047 28,327,249 Under Construction (ft2)2 0 6,819,430 704,100 153,868

POWER Stable with excess capacity over current demand

– Back-up generator system: a regular feature in almost all buildings

Regional Hub for Logistics (UPS, Lufthansa Technik)

Good Access to the important 550 Million People ASEAN Market, plus ongoing bilateral trade negotiations with Japan (120 M affluent population)

Reachable within 4 hours by plane from Asian key cities Japan Korea China Singapore Taipei Thailand Indonesia

Strategically Located in Asia

Historical

Educational

Political

Accounting

National Standards and practice adhering to Generally Accepted Accounting Principles (GAAP) and International Accounting Standards (IAS)

Legal

Banking & Finance, Insurance

Entertainment

Strong Affinity With the West

Friendly people Value-for-money housing Modern recreational facilities First-rate educational institutions

Presence of International schools

Expatriates’ top choice for quality of life

Hospitable Lifestyle

Government Support

ICT enjoys the full support of Philippine President Gloria Arroyo, and is considered a high priority sector

E-commerce Law is in place ICT incentives available

4 to 6 years Income Tax Holiday Special 5% tax rate on gross income after the

lapse of ITH (for IT Park/Ecozone locators) Tax and duty exemption on imported capital

equipment (for IT Park/Ecozone locators) Unrestricted use of consigned equipment Exemption from wharfage dues Employment of foreign nationals Exemption from 10% input VAT on allowable

local purchase of goods and services (e.g., communication charges)

Investment Incentives available:

IV. Join the other global companies outsourcing in the Philippines

Contact Centers (including customer support call centers):Growth has been phenomenal, with the

industry growing 79% last 2005! 87% of our foreign customers are from the

USA, a testament to the Philippines’ strength in English contact centers!

Majority of the top call centers have set up operations over the last two years and many of the Fortune 500 companies are outsourcing to the Philippines, as can be seen in the next pages!

The world’s top Contact Center companies are in the Philippines:

                                                                                              

                      

                                                                                

                                

Some Fortune 500 Clients outsourcing to the Philippines:

                                                            

Companies who have setup their own in-house Contact Center operations in the Philippines:

Other Business Processes:

Meta Group cites the Philippines as Asia’s “Bright Spot” for outsourcing

We specialize in Finance and Accounting, Human Resources Administration , software development, and engineering design

Key players include AIG, JPMorgan, Alitalia, Citibank, P&G, Chevron Texaco, Accenture, Shell,HSBC and SGS, as follows:

Who Are With Us

                     

                      

Companies who are already outsourcing finance, HR, and other processes in the Philippines:

V. Invitation

Value Proposition

Better Quality Delivery At A Significantly

Reduced Cost

Our Invitation

We invite you and your customer care officials to visit the Philippines. We can assist you and put together an itinerary that will demonstrate exactly the opportunities that are mentioned in this document

Contact details: •Mr. Emmanuel W. Ang, Commercial Attaché and Director, Philippine Trade and Investment Center, Guangzhou, PROC•Address: Rm. 713, Guangdong International Hotel, 339 Huanshi Dong Lu, Guangzhou, PROC, 510098•Telephone: (8620)83316331; (8620)83312391 for fax