A Canadian’s view of the Philippines
Julian Payne, a Canadian expatriate who has been living in the Philippines for the past two decades, believes that the country’s greatest asset is its over 100 million people, many of whom are service-oriented and highly skilled.
“They are very good for a number of reasons. Obviously, you have a relatively well educated work force. You have the capacity to speak English. That is very important. The Filipino accent is a very neutral one, and therefore very acceptable internationally. That is a big plus,” Payne, a septuagenarian, says in an interview at his office in Makati City.
Payne knows the topic very well. He is an international business advisor who has a wide range of experience in diplomacy, economics, foreign aid and business advisory. He is also the long-time president of the Makati-based Canadian Chamber of Commerce of the Philippines Inc. and heads Searep Limited, a consulting firm focusing on Southeast Asia.
He studied economics and politics at Royal Military College of Canada and earned a Master’s in Economics from London School of Economics. He served in the Royal Canadian Navy for three years in the 1960s, became a diplomat in Guyana and Suriname and worked for the Canadian International Development Agency and the Asian Development Bank.
Payne, now semi-retired, lives in Ortigas. “I have been involved with the Canadian Chamber for 21 years, but I have been president only for the past six years,” he says.
As the head of the Canadian Chamber of Commerce, Payne is excited about the growth of the information technology and business process management and global in-house center industry in the Philippines, which has grown tremendously over the past decade because of the country’s highly-skilled, English-proficient labor force.
“We saw this as a potential major area for economic growth in the Philippines,” Payne says, in explaining why the Canadian Chamber chose as its flagship event the annual International ICT Awards Philippines.
“This was launched 10 years ago, which was an initiative of one of our then vice presidents. We thought it would be a useful contribution to the ICT to have an awards program to recognize the very best. We support the economic growth of the Philippines,” says Payne.
The Canadian Chamber teamed up with the Information Technology and Business Process Association of the Philippines to hold the 10th International ICT Awards Philippines on March 22, 2016 at the Marriott Grand Ballroom in Pasay City. Nominations for 14 awards and two special categories are open to eligible companies and individuals in the Philippines. Nominations can be submitted online until Jan. 31, 2016.
Payne says more than 100 nominations are expected to be submitted for the awards. He says come the awards night, more than 500 individuals are expected to attend the event. Among the sponsors are Globe Business and PLDT Alpha Enterprise.
The awards include best company of the year, best employer, best Filipino-owned company, best company outside the National Capital Region, best global in-house center, most innovative company, best voice excellence company, best emerging IT-BPM company, best emerging IT-BPM company for healthcare, best emerging IT-BPM company for finance and accounting, best software company, best Philippine mobile app, best BPO team leader (by on-line voting) and best ICT CEO.
Special categories are individual contributor of the year and hall of fame awards.
Payne says the awards now focus on recognizing Filipino-owned companies as well as companies with headquarters outside Metro Manila. “We thought that it is in the interest of the industry to recognize those companies that are outside the National Capital Region,” he says. “We also try to recognize Filipino-owned companies. A lot of BPO companies are basically foreign-owned. In this case, we put a category and the eligibility is limited to those with 60-percent ownership by Filipino. These were designed to broaden the coverage of the industry, far wider than the traditional ones.”
Payne says to choose the deserving companies, CanCham has made the judging procedures more transparent and the criteria for judging more objective. “And we publish it all. For example, how do we choose the judges? With the advice of IBPAP, CanCham chooses the judges each year. There is gonna be seven judges, four from the industry and three from outside the industry.”
“The selection of judges is very, very objective. They cannot be nominees, they cannot be sponsors. We manage to do that,” he says. “The judges have to make a decision by super majority. It is not unanimous. So five of the seven judges have to agree.”
Payne says the IT-BPM sector has become a huge industry in the Philippines, with more than a million employees. “It is a huge and important industry and one of the purposes of this award program is to really recognize the best in the industry, therefore ensuring excellence, because we need to compete,” he says.
Payne says to stay ahead of the game, the Philippines needs to maintain its advantage. “Obviously, English is becoming more of a standard language, not only in the Philippines, but you are seeing younger generation in Cambodia and Vietnam learning English. The second thing is that the industry is not just voice, it is also technical service. In India, you have very skilled technical people. You are getting competition in the non-voice side. Basically, in my view, as long as the Philippines maintains a very high English standard capacity, and as long as it increases its technical expertise for the non-voice side, and as long as the basic cost remains competitive, then the industry should be able to continue,” he says.
Payne says Canadian companies are also present in the Philippine BPO sector, including Telus, which is one of the largest players. Canadian companies are also major investors in other sectors, particularly the insurance industry.
“Sunlife and Manulife are the biggest and they have been here for 100 years. They are very well known across the country,” he says. Canadian companies also have investments in mining, ICT and electronics sectors.
An area of opportunity, he says, is medical tourism, because of the excellent healthcare provided by top hospitals in Metro Manila. “Another area in tourism relates to Filipinos in Canada. There is a lot of family travel. There are 800,000 Filipinos in Canada now and a lot of them have extended families here. So you are seeing an increasing flow of travel between the two countries related to families,” he says.
Meanwhile, about 25,000 to 50,000 Canadians live in the Philippines, but the number could change, if the Canadians of Filipino descent would be included in the count, he says.
Payne says he has been living in the Philippines on retirement visa. He says while the retirement sector is also another area of opportunity, there are several issues that affect the sector such as the long distance between the two countries. “As air travel becomes less expensive, like if a budget airline establishes service between the Philippines and Canada, you might see that grow more,” he says.
“The second problem is when you retire, you want to own a home. Under Philippine laws and regulations, I can only own a condo. I cannot own land and a house. Some of us, me included, would much prefer to have a land and a house with a garden than a condo,” he says. “That becomes a disincentive. In the US, you can buy land. You can buy land even in Vietnam now.”
Among the advantages of the Philippines is the quality of services here, he says. “When you get older and medical services become important, medical services here are excellent. As you get older, you become more dependent on household care. This is cost effective in the Philippines. The third thing, when you are old, you don’t want to shovel snow,” he says, referring to the cold climate of Canada. Payne is from Toronto.
He says in terms of investments, the Philippines is becoming more attractive as a market. “Obviously, if a country has more than 100 million people, that is a big market. It is a market that is basically reaching middle-income levels. Therefore, it has disposable income. Obviously it is a huge market,” he says.
“So you are seeing great interest in international trade and international investment. The problem with foreign investment is the foreign investment restriction which is fairly restricted compared with other countries. Secondly, the ease of doing business, which has much improved in recent years, but still it is more difficult to invest here compared to like Vietnam. Bottomline, there is not much investment yet, but interest is increasing. We think that if the government will ease on restrictions, foreign investment will increase,” he says.
Payne says there are four areas that require improvement. “First of all, you need less protectionism in trade and foreign investment. You need more open markets. Second thing is the ease of doing business. It is how many permits you have to get. How many forms you have to fill up. How long it will take. In some countries, you can form a corporation in one day and two steps. The third area is corruption. Again, this exists in many countries. Obviously, you need to improve that situation. The fourth is the judiciary. It is absolutely essential in business to have a judicial system that you can depend on and understand,” he says.
Payne says the Philippines should also prepare for economic integration. “We are going through some momentous changes there. There is the Asean integration. Second, there is the Trans-Pacific Partnership, which Canada has signed on, but the Philippines has not yet. If you want to take advantage of this huge thing, people may have to adjust,” says Payne.
Payne says the Canadian Chamber on its own started discussions on the Philippines-Canada free trade agreement. “This is very interesting. Canada has no FTA with any Asean country. It has no window into Asean. So a free trade agreement between the Philippines and Canada can actually give Canada a window into Asean. Similarly, it will give the Philippines a window into North American Free Trade Area,” he says.
CanCham had 318 members as of November 2015, with half of them Canadian and international companies and the rest Philippine members with Canadian interest. The chamber has a full-time staff of eight, with six in Manila, one in Cebu and one in Davao.
“We have started consulting our members about what they think about a free trade agreement. We will continue doing that into New Year. Eventually, we will come up with a position on the scope of the free trade agreement,” says Payne.