Philippines: Strengthening Knowledge-Based Economic and Social Development

Sovereign Project | 46234-001

Summary

The TA purpose is consistent with the overall objective of ADB's Country Partnership Strategy (CPS) for the Philippines, which seeks to help the country achieve high, inclusive, and sustainable growth. The TA's focus on building human capital and a well-skilled labor force sits well with the priorities of ADB's Strategy 2020. The TA's thrust to align higher education programs with the labor market demand reflects the strategic priorities of ADB's Education Sector Operations Plan for strengthening postsecondary education. The TA also supports ADB's Knowledge Management Framework, particularly in expanding knowledge sharing, learning, and dissemination of innovations through external relations and networking. The Philippine Development Plan (PDP) 2011-2016 emphasizes improvement of education and other learning systems to underpin a competitive economy.

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Project Name Strengthening Knowledge-Based Economic and Social Development
Project Number 46234-001
Country Philippines
Project Status Approved
Project Type / Modality of Assistance Technical Assistance
Source of Funding / Amount
Strategic Agendas Inclusive economic growth
Drivers of Change Governance and capacity development
Partnerships
Sector / Subsector

Education - Tertiary

Industry and trade - Industry and trade sector development

Information and communication technology - ICT industries and ICT-enabled services

Gender Equity and Mainstreaming Gender equity
Description The TA purpose is consistent with the overall objective of ADB's Country Partnership Strategy (CPS) for the Philippines, which seeks to help the country achieve high, inclusive, and sustainable growth. The TA's focus on building human capital and a well-skilled labor force sits well with the priorities of ADB's Strategy 2020. The TA's thrust to align higher education programs with the labor market demand reflects the strategic priorities of ADB's Education Sector Operations Plan for strengthening postsecondary education. The TA also supports ADB's Knowledge Management Framework, particularly in expanding knowledge sharing, learning, and dissemination of innovations through external relations and networking. The Philippine Development Plan (PDP) 2011-2016 emphasizes improvement of education and other learning systems to underpin a competitive economy. Aligned with the information and communication technology (ICT) priorities of PDP, the Philippines Digital Strategy (PDS) 2011-2016 provides the roadmap to actively use ICT in the pursuit of socioeconomic goals. The TA is included in the 2012 pipeline program, which is for confirmation by the Government. It will build on and complement ADB's support to national competitiveness and education sector development. The TA will be implemented in parallel with the proposed policy-based loan on Increasing Competitiveness for Inclusive Growth and piggy-backed TAs that support job creation and industry skills development program, particularly in the tourism sector.
Project Rationale and Linkage to Country/Regional Strategy

The Philippines has emerged as a major hub for global IT-BPO operations. In 2010, the local IT-BPO sector accounted for 8% of the total revenues of global offshore services market. The Philippines is the leader in the voice segment and second largest destination for non-voice services. The IT-BPO industry has demonstrated a growing importance in the domestic economy. From less than $100 million in export revenues in 2001, these industry earnings have reached $11 billion in 2011. The sector accounted for about 4.8% of gross domestic product in 2010. It has more than 600,000 full-time employees and more than a million indirect employees by end of 2011. The Philippine Development Plan 2011-2016 has identified IT-BPO as one of the top 10 priority development areas with the highest potentials in terms of economic growth and job creation. The local IT-BPO industry is projected to further expand its market share in global BPO operations. It is expected to generate export revenues of $25 billion and provide about 3.5 million direct and indirect jobs in 2016, provided that the Philippines stays ahead of other countries in a highly volatile and flexible sector

Ensuring a steady supply of qualified workforce is however a huge challenge to the IT-BPO industry. The country's educational institutions have fallen short in providing the adequate number of suitable graduates to meet the labor demands of the growing IT-BPO sector. Programs of higher education institutions (HEIs) are not directly related or complementary to IT-BPO services. While there is a steady influx of college graduates every year, many of them lack proficiencies in English, math, and science that are needed by the industry. In addition, low IT literacy and poor access to computers of the larger segments of the population hinder the expansion of suitable talent for the IT-BPO industry. There is also a large gap in the supply of mid-level managers and senior-level executives to lead the large pools of young employees in the industry. The limited supply of talent and stiff competition among IT-BPO companies have led to high employee turnover rates and increased costs for hiring, training, and retention.

To improve the labor supply chain in the local IT-BPO industry, the Business Processing Association of the Philippines (BPAP) has partnered with the Technical Education and Skills Development Authority (TESDA) and the Commission on Higher Education (CHED) in the development and roll out of industry-based educational programs. TESDA and BPAP have ongoing programs to train and certify call center agents and trainers as well as other talents in non-voice services such as software development, animation, medical transcription, legal transcription, and game development. BPAP has a two-year associate program with selected academic institutions that guarantees employment in the industry upon completion of the program. CHED has approved the specialization track on Service Management for BPO (SM-BPO), a 21-unit program that can be incorporated in the existing curricula of HEIs. BPAP has co-developed the SM-BPO and will co-teach it in selected HEIs starting school year 2012-2013. A service technology program is also being developed by BPAP that can be offered by HEIs as either a post-graduate certificate or master's degree to equip potential executives and managers with industry-relevant information, education, and experiences.

Going forward, industry players, government, and educational institutions need to work more closely together to sustainably meet the labor demands of high growth but also high risk industries like IT-BPO. The ongoing initiatives of BPAP, TESDA, and CHED should be supported and scaled up to cover more HEIs in the country, particularly those located outside Metro Manila. Incentive systems should also be put in place for HEIs to progressively improve their programs and move them closer to industry needs.

Impact Improved alignment of higher education programs with the needs of the economy
Project Outcome
Description of Outcome A replicable and sustainable system of ICT-enabled knowledge hubs developed for the improved teaching and learning of IT BPO industry-designed curricula in HEIs
Progress Toward Outcome
Implementation Progress
Description of Project Outputs

1. Access to knowledge resources for teaching and learning IT BPO industry-designed courses increased

2. Higher education curricula and instruction enhanced

3. Partnerships between industry and academic institutions strengthened

Status of Implementation Progress (Outputs, Activities, and Issues)

ADB engaged the Information Technology-Business Process Association of the Philippines (IBPAP), Asian Institution of Management (AIM) and University of the Philippines-Open University (UPOU) to work jointly on the implementation of the TA. IBPAP is primarily responsible for managing the TA while ensuring closer university-industiry linkage and sustainability of the TA benefits. UPOU is responsible for designing and deploying e-learning products for industry designed courses in higher education institutions (HEIs) and AIM will lead the TA knowledge management components.

IBAP, UPOU and AIM have mobilized their resource teams, set up management/monitoring, financial and personnel systems and identified equipment for procurement. Key mobilization activities undertaken also included the immersion of the AIM and UPOU teams to IBPAP and indistry firm operations, preparation of Inception Report and preparation for the first project steering committee meeting.

The project is now in the middle stage of implementation with several activities undertaken leading to outputs 1 and 3. Some activities such as the preparation of the Business Model and establishment of knowledge hubs are slightly delayed while activities under Output 2 which covers design and delivery of online service management program (eSMP) are slightly ahead of schedule with two courses ready for delivery in the next quarter.

TA closing date has been extended for one year or until 15 October 2016.

Geographical Location
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design Stakeholders consulted.
During Project Implementation Consultation with stakeholders undertaken continuously.
Business Opportunities
Consulting Services Department of Finance (DOF) will be the executing agency. The TA will be implemented in collaboration with two leading academic institutions in the country, which will be engaged using single-source selection method in accordance with the ADB Guidelines on the Use of Consultants (2010 as amended from time to time). Chaired by DOF, a steering committee composed of Commission on Higher Education, the National Economic and Development Authority, other government agencies, and Business Processing Association of the Philippines (BPAP) will oversee TA implementation. The steering committee will provide quality assurance and ensure effective coordination with other government agencies, development partners, and stakeholders. The TA will be implemented from August 2012 to July 2015.
Procurement All procurement will be done in accordance with ADB's Procurement Guidelines (2010, as amended from time to time). All procured assets will be transferred to the executing agency after the completion of the TA. Disbursements under the TA will be in accordance with ADB's Technical Assistance Disbursement Handbook (2010, as amended from time to time).
Responsible ADB Officer Joel V. Mangahas
Responsible ADB Department Southeast Asia Department
Responsible ADB Division Human and Social Development Division, SERD
Executing Agencies
Department of FinanceDOF Building
Bangko Sentral ng Pilipinas Complex
Roxas Blvd., Manila, Philippines
Timetable
Concept Clearance 17 Jun 2012
Fact Finding 26 Apr 2012 to 04 May 2012
MRM -
Approval 14 Sep 2012
Last Review Mission -
Last PDS Update 31 Mar 2015

TA 8164-PHI

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
14 Sep 2012 18 Oct 2012 18 Oct 2012 15 Oct 2015 15 Oct 2016 -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
0.00 0.00 0.00 0.00 0.00 0.00 0.00 14 Sep 2012 136,313.19
Title Document Type Document Date
Strengthening Knowledge-Based Economic and Social Development Technical Assistance Reports Sep 2012

Safeguard Documents

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Evaluation Documents

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