Philippines’s Got Talent – in Spades
The human-capital space doesn’t get more lively than this
WE FOUND OURSELVES in Dubai and Abu Dhabi some years back, talking shop with firms in the finance, IT, and hospitality sectors. Unbidden, and tangential to the discussion, all sang praises to the quality of their Filipino employees. One company even confessed that if one fine day (in a self-inflicted doomsday) the Emirati government suddenly decides to expel all guest workers, Filipinos would be the utter last to get retrenched, and employers would fight tooth-and-nail to retain these.
All this was ringing testament to the skill, education, positive cultural traits, service orientation, value-add, and global competitiveness of the Filipino employee, whether blue-collar or white-. We’ve heard similar compliments in Singapore about Filipino professionals, in Hong Kong about household help, and in Riyadh about construction workers and engineers.
However, some argue that there’s self-selection bias going on; that the best-quality talent flies the coop, while the dregs are left as fodder for the domestic economy.
That’s only partially true; because during the last 10-15 years whole new industries have sprouted that demonstrate the Filipino worker’s prowess to the world without forcing her to leave native soil. One stark telltale is the fact that in 2011 Philippines overtook India in headcount for offshored voice-based services by a wide margin, i.e., 400,000 call center agents, versus 350,000 – this despite a 13-to-1 population disadvantage.
But, the wet blankets would again retort dismissively, call centers are low-margin, low-wage, commodity businesses that merely tend to exploit or harvest human capital.
Well, we can tell you that based on the opportunities we’ve encountered (a few of which have made it into our deal pipeline and advisory client base), Philippines is host to an exciting and diverse array of higher-value-added knowledge process outsourcing (“KPO”) companies, such as:
Most of the firms in the foregoing sample have been operating for a number of years now, and are all revenue-generating. Many have already been tested by market downturns and industry shakeouts. Most are on track for both organic growth and growth by acquisition, and therefore for intervention by providers of private equity (“PE”) capital.
That’s not all. Philippines is also a hotbed for the creation of original content and disruptive intellectual property (“IP”). At the moment, we’re working with relatively younger firms that are developing and launching:
Outside of what we’ve been doing, the local incubation scene has lately received shots in the arm from Globe Telecom’s Kickstart Ventures and PLDT’s IdeaSpace. The start-up portfolios shown on these boot camps’ websites are worth trawling through, if at least by the more “angelically-inclined”.
In conclusion, Philippines is home not only to Manny Pacquiao and the reigning Miss World, Megan Young. There are rich seams of high-quality human-capital investment themes that remain largely overlooked by investors on the hunt for long-term value in a volatile world. So, do check out the Philippines, folks. We’ve got a surplus of talent that PE investors would simply eat up!
(More reason to re-examine Philippines today: the country is now deemed investment-grade by ALL THREE major US credit rating agencies. This has never happened before. Thank you, Moody's, for finally helping us complete the set early last month.)
The opinions expressed herein are the writer’s own, and are not necessarily official positions of Angeon Advisors Ltd. Neither the writer nor Angeon makes any representations or warranties as to the accuracy or reliability of the materials contained herein.
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Angeon Advisors is an independent alternatives manager specializing in private equity and venture capital growth themes in the Philippines and other markets in Asia. Angeon also provides financial advisory services to very select clients.