Saturday, 29 September 2007

Ten Letters (4)

LET'S get straight to the point.

As a country, we have never been that good in sustaining anything that is potentially of value. So many opportunities have been presented before us, and many more have been there for the taking. And yet, all we have managed to do is squander most of them away.

Today, the BPO industry and the export of healthcare (particularly nursing) workers to foreign markets are proving to be lifesavers for our economy, both without which we would be in even direr straits than we are at the moment.

It is perhaps a difficult thing to accept — that we as a country are either doing things that other countries find to be of little value (the whole essence of Business Process Out-sourcing), or find less rewarding to pursue (such as being a nurse in a developed economy).

But desperate times call for desperate measures, and although I am hardly labeling those in either sector as desperate, what I am really saying is that given where we are, we have really very little choice in which activities we do or do not wish to pursue. We have to, as a country, take on all comers, as they say.

The first thing to do is to admit that we have little choice in the matter, as this sets us in the right frame of mind to do whatever it is we need to do to be good in both, for as long as we can.

The second thing to realize is that we need to keep working away in being good at these things, because in an increasingly global eco-nomy, alternatives always abound, and we can be easily be substituted with very little notice.

And of course, the third fact we need to digest is that we cannot just rely on these two sectors to lead us into economic prosperity — many more answers will have to be found to the question of economic development, if we are to get anywhere.

These three “reality checks” serve as useful guides in formulating a whole host of policies, influencing such areas as education, tourism, finance, and economic development.

The first pillar is perhaps self-evident. Apart from the two sectors, we have very little to go by as a country anymore.

Bankrupted by years of inept leadership, and today still ruled by a bickering, selfish and morally corrupt political elite, nursing and BPO are opportunities that our Tagalog friends would call “kapit sa patalim.” I prefer this description to “last-ditch,” which somehow doesn’t quite describe the desperation as starkly. But you get the picture.

The second pillar is the one that needs a lot of work put into it, by everyone concerned. Two Cs determine whether we continue to be favored over other countries — cost and competence.

The first is particularly key to BPO, because by de-finition, business processes that are being outsourced, are those which are not considered by the outsourcer as being “core” to their business. For example, call centers for banks are considered necessary, but not key to their survival and success. Therefore they are willing to farm out the task to the lowest bidder.

Having said that cost is the pre-eminent consideration, competence is considered as standard — if you have it you get the business (providing you are the lowest bidder) but if you don’t have it, then you lose the business (even if you are the lowest bidder).

Published in the Sun Star Daily, Saturday, September 29, 2007 (

Saturday, 22 September 2007

Ten Letters (3)

I REMEMBER the days when I was an eager young man working in the financial services sector back home.

At that time, all the rage was about the furniture industry and how good we were compared to the rest of our neighbors in the Asean. Years before this, it was our sugar industry that was the darling of our economy.

What’s happened to them now, and why? Depending on your perspective — too much, and not a lot.

In the beginning, they made too much profit, but not a lot of it went into re-investment.

Flushed with our success, we made too much hype of them, but really not a lot of action.

And though there was getting to be too much competition, we never did a lot to strengthen whatever advantage we had.

As a result, although there was too much promise then, there is not a lot to show for them today.

It is a difficult thing to admit, but we need to face up to reality sometime — even in our economic policy, the “ningas cogon” syndrome is a difficult thing to shake off.

If we were athletes, we would be good sprinters, but poor marathon runners.

We get to the 100-meter line first, but once there we immediately set up our hammocks and take a long siesta. Meanwhile, everyone else, whilst seemingly jogging along at a much slower pace, will have passed us by and crossed the finish line before we wake up. When we wake up, we then realize how much ground we have already lost and decide to quit the race in desperation.

Count them with your fingers if you can — prawn farming, handicraft, garments, terra cotta, iron craft, wood working, dehydrated food, processed food, floriculture, tourism — you will run out of fingers and still the list goes on of sectors where we had shown a lot of early potential, but which never really progressed much beyond the promising stage. Or if anything did, it invariably had a meteoric climb to the top, but an equally precipitous drop to mediocrity or failure.

True, there are exceptions to be found within these sectors, but these are organizations that have survived due to their own efforts, and not because of any coherent strategy from the top.

Today, the apples in the eyes of our policy makers happen to be nursing, and the BPO (business process outsourcing) industry.

Much is being made of the successes we have attained in gaining a substantial share of the demand for healthcare workers in foreign lands. We cannot, it seems, produce enough nurses to meet the demand in overseas markets and have to open new schools year after year to fill the gap.

Call centers, too, are sprouting all over the place like mushrooms. A lot of times these days whenever I need to call a contact center from the UK, it is an American-sounding-but-quite-distinctly Filipino accent that I hear on the other line.

But what are we doing to ensure that the industries that now provide the lifeline to thousands of our countrymen continue to prosper and survive, instead of going the way our furniture and sugar potential went — with a lot of snap, crackle and pop in the beginning, somewhat of a big bang in the middle, but just total silence in the end?

Published in the Sun Star Daily, Saturday, September 22, 2007 (

Saturday, 15 September 2007

Ten Letters (2)

SERVICE industries are a peculiar lot.

Unlike manufacturing organizations — with their factories, equipment and stacks of inventory — many service-orientated companies have little by way of “hard” assets.

Take a restaurant, for example. Among the things of tangible value would be the furniture, kitchen equipment, some pieces of décor and possibly the building itself in which it is located. Apart from these, the refrigerator will probably contain a few days worth of food ingredients, but not much more really.

Clearly, as the Little Prince would no doubt have observed, what is of value in a restaurant business “is invisible to the eye.”

Call centers are even more spartan — just huge, open floor areas with lots of desks, computers and banks of telephones. Okay, maybe the air conditioners would be worth something, but I think you get the point by now.

In elaborating on his theory of competitive advantage, the eminent Har-vard management guru Michael Porter cites “intensive capital requirements” as one of the major barriers to enter any industry.

Automotive manufacturing, for example, is one such sector. Since it requires large capital investment which are often unavailable to would-be start-ups, those already in the sector are afforded some sort of protection from competition, at least for some time until potential entrants find a way to either raise funds, or do things differently that would require lower capital investment.

In many service businesses, “intensive capital requirements” is usually not a major barrier to entry. Almost anyone can start a restaurant, and for that matter, entering the call centre business does not seem to be such a difficult proposition. Whether the ventures succeed or not is an entirely different proposition.

As a country, we have chosen to hitch our future on the provision of services to the world. Nursing and BPO are two of our biggest revenue earners at the moment — and if we believe all the hype that surrounds them — will remain so for the foreseeable future.

As we have pointed out, this subjects us to potentially stiff competition from rival countries who wish to do the same things we are doing. And because services do not require a lot of investment, it will not be that easy for us to defend our position.

Take the case of the domestic service (domestic helper) sector, for example.

Indonesians, Sri Lankans and Africans, have undercut the going rates for our countrymen in the lucrative markets of the Middle East. As a result, these countries have managed to take a large share of our erstwhile monopoly in the region.

Nursing and business process outsourcing will not be exempt from the competitive pressures that the domestic service sector experienced. Even today, nurses from India, Sri Lanka, and South Africa continue to flock in large numbers to the same countries where our countrymen are headed, e.g. the United States and the United Kingdom.

BPO businesses likewise face stiff competition, especially from India, where the call center revolution first started.

And yet, we cannot escape the great responsibility of making sure that these service sectors survive and thrive amidst the growing foreign competition.

The lives of thousands of our countrymen, and the fortunes of thousands of others who depend on them, demand no less.

NOTE: Warmest greetings to my beloved wife, Cynthia Marie Arguelles Batuhan, who celebrates her birthday on Sept. 20.

Published in the Sun Star Daily, Saturday, September 15, 2007 (

Saturday, 8 September 2007

Ten Letters

ALL in 10 letters.

That’s right. It seems that these days, the entire nation’s future rests on only 10 letters. Well, nine letters to be exact, but one is twice important.

B-G-I-N-O-P-R-S-U. The future of the Philippines is all there. Rearrange the order, repeat the “N” twice, and you can decipher the hope for our future.

What are they? Why BPO and NURSING, of course. Who can open a paper these days without seeing something on one or the other?

Whether to favorite destinations like the United States and the United Kingdom, or less favored ones such as Saudi Arabia and Taiwan, everyone’s ambition, it seems, is to go there and work as a nurse. So much so that in a nation where there seems to be a college or university in every street corner, we now have a shortage of institutions to meet the insatiable demand for nursing education.

Those who manage to escape the forces of the nursing magnet, or simply want to stay at home instead of roaming the world caring for the ill and infirm, end up mostly in one place — the call center. Business process outsourcing (BPO), or simply put, the export of work routines that foreign companies see as “non-core” and “non value-adding” to their organizations, has become the career of choice for our well-spoken and well-educated workforce, graduated from esteemed centers of learning like the Ateneo, La Salle and UP.

There’s nothing wrong per se to having a current competitive advantage in at least two sectors that provide mass employment for our young people. After all, the more of us are in employment, the less burden it will be for the state (and indeed for our families, relatives and friends) to provide the necessary financial support to those that would otherwise be out of work. And of course, tax revenues and remittance inflows from these sectors are becoming a larger and larger component of our gross domestic product.

For now, it seems, we at least have some answers to the all important question – “how shall we provide work for our countrymen?”

“For now,” because whether we realize it or not, nursing and BPO can only be the answers for so long. I have purposely alluded to this earlier in the piece, by saying that we have a “current” competitive advantage in both sectors.

By current, I meant the “here and now” only. Whether or not we still have this edge in years to come remains to be seen, and is something that we need to invest a lot of work into.

While both appear unrelated at first, there is a lot in common between BPO and nursing than we might think.

Both are in the service sector, with people being their most important resource.

And the nature of this resource is precisely where our future problems are likely to come from.

One thing we need to realize is that we are producing levels of these resources, OVER AND ABOVE what our local economy alone can fully utilize.

To use an old economy analogy, these are “export-orientated” sectors that need foreign demand, otherwise we will have excess production that our domestic requirements alone can never hope to utilize.

It is clear then that this “foreign demand” has to constantly be there, or we will have an excess of resources with little use for our own consumption.

But how robust and reliable is this foreign demand that we are talking about?

Can we rely on this to continue well into the future?

NOTE: Warm Greetings to my brother, Atty. Aristotle “Totol” Batuhan, who celebrated his birthday yesterday.

Published in the Sun Star Daily, Saturday, September 08, 2007 (

Saturday, 1 September 2007

Faith tourism (the not so good side)

IT was a very fulfilling experience — having visited some of the holiest sites of the faith that I was born into.

A few years ago, while working in Turkey, my family also had the opportunity to see many of the places that feature prominently in the history of the Church, among them the church in the Byzantine city of Nicaea, where the wording of the Apostle’s Creed as we know it today was agreed upon; the Seven Churches of the Revelation; the Basilica of the Hagia Sophia — the ancient world’s rival to the St. Peter’s Basilica in Rome; the city of Ca-ppadocia; the House of Mary (one of the sites believed to be where the Blessed Mother spent her last days under the care of the apostle John); and the ancient city of Ephesus, where the apostles Paul and John continued their work of evangelization following the death of Jesus Christ.

There is something about actually being in places that are mentioned frequently in our prayers, where some of the Bible’s most famous passages were written, or where the first Christians went about preaching the good news to people outside the faith, that can strengthen the belief of even the most shaky adherents like myself.

Taking in the majestic grandeur of a place like Cappadocia, the tranquility of a lakeside summer city as Nicaea or the rugged landscape of the churches of Sardis and Laodicea, it is difficult not to feel strengthened by the resolve of the first converts to make it through, despite all the obstacles that stood in their way. For me therefore, personal pilgrimages are faith enhancing, and useful to believers of a faith — any faith for that matter.

This is where I also noted the other side of faith tourism — the one that is as less desirable as the spiritual elements are spiritually enriching — the business side of it. For I have never found commercialism and naked capitalism to be as rife and rampant as in the places where people of faith congregate and visit.

Never have I paid so much for a simple breakfast of egg omelette, toasted bread and coffee, for example, as I had in Lourdes — a princely sum of P1,500 for the privilege. This was no Shangril-La in the Pyrenees either — just a simple café staffed by some surly looking Frenchmen, who looked like the last time a smile crossed their faces was when the Virgin Mother appeared before St. Bernadette.

In Italy, the smiles were much more welcoming but the mark-ups were no less exorbitant. Around the area of the St. Peter’s Basilica, a bottle of water was selling for P300, and this was out of one of the roadside mobile food sellers, not in some fancy Roman bistro. No wonder the Italians always say the water in their many outdoor fountains tastes good — seems like they have no choice but to convince themselves of this, otherwise they would be spending all their disposable income just on drinking water!

I guess in the end, business will spring where an opportunity exists, whether it is to cater to the simply curious — such as the Moulin Rouge, or the fervently faithful like the Cathedral of the Sacre Cour (Sacred Heart) in nearby Montmartre.

The only thing that we can do, as the faithful devoted who flock to these sites in our thousands, is to be more discerning in how we part with our money. Like for a start, not paying P2,000 for a small statue of the pieta, which clearly looks like it was made in China.

Only then may we actually see a modern-day miracle coming out from some of these sacred places — the miracle of mass price reduction forced upon profiteering businessmen to win back customers boycotting their overpriced merchandise.

CONGRATULATIONS. Our congratulations to JM Batuhan, who won second place in the Essay Category, English Division of the 57th Carlos Palanca Memorial Awards for Literature. Awarding takes places on Sept. 1 at the Manila Peninsula Hotel. Also our warmest felicitations to my son, Jacob Anthony Batuhan, whose work “Spartan War” was judged among the winners and chosen for publication in the Young Writers Writing Competitions for Secondary School Pupils, in the United Kingdom.

Published in theSun Star Daily, Saturday, September 01, 2007 (