Industry leaders worry over brain drain

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Thursday, February 20, 2014

WHILE the Asean integration opens market opportunities, Cebu industry stakeholders fear it could lead to brain drain from poor countries to richer ones.

Speaking as reactor during the Sun.Star Economic Forum last Wednesday, Cebu Educational Development Foundation for Information Technology (Cedf-it) executive director Wilfredo Sa-a Jr. that the integration could lead to skilled workers moving to countries that offer higher salaries.

Sa-a said that even before the start of the integration, the industry has already been losing talented workers to countries like Singapore, which offers salaries that are four times higher than the Philippines.


Cenelyn Manguilimotan, president of Hotel, Resort and Restaurant Association (HRRAC), also shared the same sentiment, saying that the industry might suffer a shortage of skilled workers if they leave for other countries.

“This integration actually opens opportunities for local hotels to expand to neighboring Asean countries...and for our workers as well to learn from the technology and skills from our Asean neighbors. However, the problem is that instead of coming back and sharing to the industry all these learnings, Filipino workers would instead get their families and relocate abroad,” said Manguilimotan.

She said the industry is having a difficulty getting the right people.

Furniture exporter Charles Streegan, president and chief executive officer of Pacific Traders and Manufacturing Corp., said continued workforce development is necessary for Cebuano industries to thrive and remain competitive.

Streegan said there should be continuous training among employees for local companies to thrive.

Cheaper labor

“There is not much difference between Filipino and Indonesian workforce, they are also highly-skilled. It is just that they have cheaper labor and power rate and their gasoline is subsidized. They have a government whose policies support and protect the local industries,” he said.

Streegan, who has been in the furniture business for 40 years, believes the Philippines still has the competitive advantage amid the slowdown it went through because Filipinos are good designers. He said industry stakeholders, including the government, should continue strengthening the supply value chain to create great products to rejuvenate the industry.

What Streegan is concerned, however, is the access to capital, especially among small and medium-sized companies.

Despite these concerns, the three industry leaders said their respective industries are now bracing for tighter competition when the Asean single market starts next year.

Sa-a said that while Cebu sustained its top 8th rank in the list of leading business process management (BPM) destinations, the industry should not merely attract contact center services but also high-value services like research and development and shared services.

“We should realize this as a niche market,” he said. “We have proven our capabilities as hospitable and customer-focused.”

Another area the industry is promoting is impact-outsourcing. Saa said the industry has diversified its operation by bringing outsourcing to remote areas where there is high unemployment. Sa-a said this sub-sector now has 500,000 people involved in home-based outsourcing, of which 20,000 are based in Cebu. The figure, he added, is more than half of the 800,000 employed in the formal IT-BPM sector.

For her part, Manguilimotan said the tourism industry of Cebu has long been doing initiatives to prepare for the Asean integration such as the implementation of the new star rating in the accommodation sector, which is already at par with international standards.


“We are now waiting for the third party audit for this new star rating,” she said.

In terms of attracting new markets, Manguilimotan said she has high hopes for the Philippines to attract more of the Meeting, Incentives, Conference and Exhibition (Mice) market. The country, though, needs proper packaging and campaign.

“We should put our acts together and focus on the branding, on what Philippines is known for and stick on it,” she said.

“The Asean integration presents a lot of opportunities. We should never be complacent. We should get our acts together,” Streegan said.

According to Department of Trade and Industry (DTI) International Trade Group Assistant Secretary Ceferino Rodolfo, the Philippines is already 87.2 percent Asean compliant as of 2013. He said efforts are underway to fully prepare the country and its industries for the single economy.

He assured participants at the forum that industry roadmaps have been already been in place to facilitate seamless integration of Philippine industries in the Asean. Out of the 26 industry roadmaps, 21 of these are being implemented while five roadmaps are
still under review. Seven new roadmaps are being developed.

Jay Yuvallos, Philippine representative for Small and Medium Enterprises of the Asean Business Advisory Council, advised local companies to be involved in the sectoral roadmap for their strategies to be aligned with the industry and with that of the Asean.

Published in the Sun.Star Cebu newspaper on February 21, 2014.


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