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DTI 04-A or DTI-CALABARZON is composed of the provinces of Cavite, Laguna, Batangas, Rizal, and Quezon.

CALABARZON’s thriving industries include  semi-processed industrial raw materials and industrial components coming from its 31 world-class industrial estates and economic zones (ecozones). Laguna is dubbed as the automotive capital or “the Detroit City of the Philippines” because most of the automative assemblers in the country—Ford, Honda, Isuzu, Mitsubishi, Nissan, and Toyota—are located here.

The region also hosts the big names in the electronics and semiconductor industries and has a vast pool of human resource base for the manufacturing and services industries.

In Photo: DTI-Laguna Starts Weekly Price Monitoring of Basic Necessities and Prime Commodities
VICTORIA, LAGUNA— Trade and Industry Laguna Provincial Director Christian Ted Tungohan orders the weekly monitoring of the price and supply of basic necessities such as, but not limited to, canned sardines, processed milk, powdered milk, coffee, bread, instant noodles, salt, detergent soap, bottled water, and candles including other prime commodities
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In Photo: City Government of San Pablo in celebrating its 29th Coco Festival 2024 with the theme,
VICTORIA, LAGUNA – The Laguna Provincial Office of the Department of Trade and Industry, represented by its Provincial Director Christian Ted Tungohan, joins the City Government of San Pablo in celebrating its 29th Coco Festival 2024 with the theme, "Saya't Sigla ay Panalo sa Fiesta ng Coco! Kulturang San Pableño
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In Photo: DTI Rizal Conducting Annual Session of Business Name Registration Retooling
The Department of Trade and Industry (DTI) Rizal through DTI Competitiveness Bureau’s Business Name Registration Division successfully conducted the yearly session of Business Name Registration Retooling on December 20, 2023 entitled, “Nurturing Capability-Building Capacity Strategies for Rizal Business Counselors (NCBCS for Rizal BCs)” with the topic Procedural Guidelines on Business
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VICTORIA, LAGUNA – The Department of Trade and Industry - Laguna Provincial Office (DTI-Laguna), through its Consumer Protection Division, conducted an onsite assessment for the DTI Bagwis Awards on March 7, 2024, in the municipalities of Calauan, Pila, and Santa Cruz, Laguna, to determine which Bagwis Level will be awarded
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In Photo: Junior Business Counselor Ms. Rica Mae Ceria of Negosyo Center Luisiana conducting a comprehensive session on creating and optimizing Facebook Pages for business purposes
CAVINTI, LAGUNA — Through the SME Roving Academy of the Department of Trade and Industry, Laguna Negosyo Center Cavinti in collaboration with the Local Government of Cavinti successfully conducted a seminar with the title “Go Digital: Essential Digital Marketing Tips for MSMEs feat. Facebook Page and Canva cum Consumer Education
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In Photo: Webinar on Fair and Responsible Artificial Intelligence for Consumers Zoom Participants
VICTORIA, LAGUNA — Improvement of customer service, development of new products, facilitation of client services, content creation, boost personalization, and improvement of task efficiency are just some of the innovative and practical ways artificial intelligence is used in our daily life. Specifically, “Generative AI” which is extensively used in many
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In Photo: Awarding of livelihood kits for 29 Carinder Owners in Antipolo City
The Department of Trade and Industry (DTI) Rizal successfully held the awarding of Livelihood Kits for 29 carinderia owners in Antipolo City under the Pangkabuhayan sa Pagbangon at Ginhawa (PPG) program. The event took place on December 22, 2023, at the SM Cherry Supermarket located on Sumulong Highway, Brgy. San
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In Photo: Social Media Management and Marketing Strategies Made Simple Webinar hosted by the Senior Business Counsellor Andrea Mae Macuha
PAKIL, LAGUNA — The Department of Trade and Industry – Laguna Provincial Office, through Negosyo Center Pakil, celebrated the successful conduct of a webinar entitled “Social Media Management and Marketing Strategies Made Simple cum Consumer Education” as part of the Center’s small medium enterprise roving academy that aimed at boosting
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In Photo: Onsite inspection and monitoring activity of motor vehicle PETCs.
PILA, LAGUNA -- Pursuant to the Department of Trade and Industry (DTI) Department Administrative Order No. 3, Series of 2002 (DAO 3:2002), the Department of Trade and Industry - Laguna Provincial Office (DTI-Laguna), through its Consumer Protection Division, conducted onsite inspection and monitoring of a motor vehicle private emission testing
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In Photo: DTI-Laguna Reminds Service and Repair Shops to Renew Accreditation
VICTORIA, LAGUNA – The Department of Trade and Industry (DTI) in the province of Laguna reminds all Laguna-based service and repair shop enterprises to renew their accreditation on or before 31 January 2024 without penalty. Under Presidential Decree No. 1572 as amended by Article 128 of the Republic Act (RA)
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The Region is located in the in the adjacent south of Metro Manila. It is among the three regions that comprise a contiguous urban beltway corridor identified as the nucleus of industrialization in the Philippines. It is known as the industrial powerhouse of the Philippines.

CaLaBaRZon has a big supply base of semi-processed industrial raw materials and industrial components coming from its 31 world-class industrial estates and economic zones (ecozones). The region has more potentials for infrastructure development as the location of facilities of the Malampaya gas project in Batangas and Quezon serve as magnets of business development activities. It is also a very appropriate site for petrochemical industries.

Most of the automotive assemblers in the country – Ford, Honda, Isuzu, Mitsubishi, Nissan, and Toyota – are located in the Region, and mostly in the province of Laguna. Thus, Laguna is dubbed as the automotive capital or “the Detroit City of the Philippines”.

Moreover, CaLaBaRZon hosts the big names in the electronics and semiconductor thus also called the “Silicon Valley of the Philippines”. Some of the big-name locators are Panasonic, Matsushita, Samsung, TDK-Fujitsu, Toshiba, Mitsui, Philips, Hitachi, Sanyo-Epson, NEC, Music, Temic, Uniden, I-Max, Lite-On, and Clarion.

The Region has a vast pool of human resource base for the manufacturing and services industries and has reliable utilities and well-placed infrastructure enhancing faster turn-around times. It has business-friendly environment, first-class lifestyle, and booming tourism circuits.

CaLaBaRZoN has been the site of the first expansion of industrial growth outside of Metro Manila and hosts the first wave and the most number of Taiwanese business locators than anywhere else in the Philippines.

Providing a balance is the Region’s natural endowments in natural resources – from land to marine – and vast lands for agribusiness and ecotourism sites.

By 2010, CaLaBaRZon will be the nucleus of manufacturing, e-services, and logistics in the Asia-Pacific Region that would be very significant to and complementary with other global economies.

PROVINCIAL PROFILE

Cavite
Land Area : 128,755 hectares
Population : 2,856,765(2007)
Population Growth Rate : 4.59% (2000-2007)
Functional Literacy Rate : 96.52%
Predominant Languages : Filipino, English
Labor Force : 2,028,285
Employment Rate : 90.5%
Labor Daily Wage : php 172 – 337(January 2011)
The province of Cavite is boredered to the north by Manila Bay and the city of manila and is directly across the bay from the province of vataan. Tothe east, you will find the province of Rizal and Laguna and to south, Batangas, with the west border being the South China Sea.
Cavite was a site of several historic battles betweem the Spaniards and the Filipino revolutionaries. Cavite city used to be mthe site of the biggest American naval base (Sangley Point) in asia until 1970.
As for as tourist destination is concerned, Cavite is not one that rolls off the tongue. It does not have spectacular beaches or natural surrounds, but for these in between flights from Manila,it can make for a pleasant day trip. Tagaytay City provides a breath taking view of lake tall and taal Valcano. Tagaytay’s cool, refeshing climate has made it a favorite vacation spot of residents from Metro Manila.
Laguna
Area : 1,759.7km2

Population : 2,473,530(2007)
Population Growth Rate : 3.22% (2000-2007)
Functional Literacy Rate :
Predominant Languages : Filipino, English
Labor Force : 137,560
Employment Rate : 90.17%
Labor Daily Wage : php 172 – 337(January 2011)
Laguna is a province of the Philippines found in the CALABARZON region in Luzon. Its capital is Santa Cruz and the province is located southeast of Metro Manila, south of the province of Rizal, west of Quezon, north of Batangas and east of Cavite. Laguna almost completely surrounds Laguna de Bay, the largest lake in the country.
The province is emerging as the “Garden Province” with is abundant water resources flowing at 300 gallons per day that sufficiently sustains the province’s agricultural prodactivity. In fact, the province showcases the famous rapids of Pagsanjan Falls, as well as the hot sulfur spring water of Mt.Makiling which is believed to have therapuetic abilities. It hosts one of the campuses of our country’s premiere satae universities, the University of the Philippines (UP Los Banos).
Batangas
Area : 3.165.8sq/km

Population : 2,245,869(2007)
Population Growth Rate : 2.29% (2000-2007)
Functional Literacy Rate : 96.5%
Predominant Languages : Filipino, English
Labor Force : 104,520
Employment Rate : 86.9%
Labor Daily Wage : php 172 – 310(January 2011)
Batangas, once known as the world’s coffee capital and famous for its “kapeng barako”.
Batangas is bordered to the west by the South China Sea and to the sout by the Verde Passage which separates Luzon from the island of mindoro. To the east are the provinces of Quezon and Laguna and to the north is Cavite.
The development of Batangas City into an international port induced multinational firms to invest in the area. It is becoming a suite of several large scale manufacturing inndustries, petroleum refineries, sugar centrals, food and beverage companies, to name a few. Batangas has magnificent beaches and there are dive resort sprinkled throughout the province.
This province is usually more used by tourist as a transit area to get themselves to the more popular Puerto Gralera on Mindoro. But for those not wanting bigger croeds, avisit to Anilao, a world class diving spot with lovely beaches is recommended.
Rizal
Area : 1,303sq/km

Population : 2,298,691(2007)
Population Growth Rate : 4.19% (2000-2007)
Functional Literacy Rate : 100%
Predominant Languages : Filipino, English
Labor Force : 55.7%
Employment Rate : 90.5%
Labor Daily Wage : php 172 – 337(January 2011)
Rizal province is bordered to the north by Bulacan and to the sout by LAguna de BAy. The closest province to metro Manila among the CALABARZON, Rizal stands at the receiving end of the greatest presuure to industrialize. It has the distinctive physical features of gentky rolling hills, low lying mountains and large valleys. It is adjacent to the northeastern portion of Metro Manila. Its eastern boundaries lie alongside the foothills of the Sirra Madre Mountains. Most of its land has been converted to residential subdivisions and industrial sites. particularly in Antipolp, Cainta and tagaytay. Rizal has the secred shrine for the Miraculous Image of our Lady of Peace and Good Voyage and plays host to a number of visitors seeking blessing before making long voyages.
Quezon
Area : 8,706.6sq/km
Population : 1,66,510(2007)
Population Growth Rate : 1.45% (2000-2007)
Functional Literacy Rate : 96.55%
Predominant Languages : Filipino, English
Labor Force :
Employment Rate : 90.52%
Labor Daily Wage : php 165 – 310(January 2011)
The Sierra Madre range runs the entire length of the province of Quezon is famous for its Pahiyas Fstival Celebrated in the towns of Tayabas, Lucban and Sariaya in May every year, as a thanksgiving for a bountiful harvest to the patron saint of farmers, San Isidro Labrador. The province is known for its vast cococnut plantations and major contributer of traditional coco-based products in the export market. The province is also famous for its Distilled Coconut Wine or “Lambanog” which undergoes the process of sap collection, fermentation, distillation, flavoring and aging. From tree to bottle, lambanog making is an artistic expression of the Filipinos unique culture and ingenuity. It is a time-honored tradition invilving a multi-stage process mastered through centuries of practice.

INDUSTRY PROFILES

Cost of Doing Business in CALABARZON

INVESTMENT PRIORITY AREAS
INFORMATION AND COMMUNICATIONS TECHNOLOGY
A. Industry Snapshot
Definition of the industry
The BPO industry is just one of the major segments of the Offshoring & Outsourcing industry. Business process outsourcing is defined as the “delegation of service-type business processes to a third-party service provider”. It covers services related to information technology, business administration, sales, marketing and customer care. Contact centers, medical transcription, back-office processing, game development, animation and digital content are services classified under the BPO segment. The other three major segments include software development or information technology outsourcing (ITO), engineering services outsourcing (ESO), and knowledge process outsourcing (KPO).
Types of BPO Services (7 Sub sectors)
1. Contact Center. Consists of in-bound and outbound voice operation services for the purposes of sales, customer service, technical support, and others.
2. Back Office. Services related to finance and accounting (e.g., bookkeeping, accounts maintenance, claims processing, asset management) and human resource administration (e.g., payroll processing, benefits administration, human resources data management).
3. Data Transcription. Provision of transcription services for interpreting oral dictation of health professionals, dictations during legal proceedings, and other data encoding services.
4. Animation. Process of giving the illusion of movement to cinematographic drawings, models, or inanimate objects through 2D, 3D, etc.
5. Software Development. Analysis and design, prototyping, programming and testing, customization, reengineering and conversion, installation and maintenance, education and training of systems software, middleware and application software.
6. Engineering Development. Includes engineering design for civil works, building and building components, ship building, and electronics.
7. Digital Content. Creation of products that are available in digital form, such as music, information, and images that are available for download or distribution on electronic media.
Sources: DTI (2006), Locsin (2006), The Computer Language Company Inc. (2006)
Growth Rate
Within a short span of time, the Philippines has established itself as one of the top destinations globally for off shoring and outsourcing (O&O) operations. From less than USD100 million in total revenues in 2001, the Philippines increased O&O revenues to USD3.3 billion in 2006, effectively doubling every year. This high rate of growth has persisted even as the industry has grown beyond its initially low base. Between 2004 and 2006, the industry grew 49 percent per year. As a result of this growth, the Philippines is now the Southeast Asia market leader and, along with India and China, one of the top countries providing O & O services globally.
The Philippines has been able to achieve rapid growth in O&O as a result of several intrinsic strengths in its labor market, infrastructure, and business environment. The industry has also benefited from targeted efforts to develop it by the government and industry players, including the early stewardship as far back as 2000 by the then Department of Trade and Industry (DTI) Secretary Mar Roxas.
Source: www.bpap.org Why the Philippines?
Regional Scope
Next Wave Cities. The concentration of BPO firms in outsourcing hubs like Makati, Ortigas and Cebu has resulted in a rapid increase of office space rents which prompted some companies to look for sites where there is huge potential talent pool and where rents are lower. The Department of Trade and Industry (DTI), the Commission on Information and Communications Technology (CICT), and the BPAP came up with a scorecard showing the next wave cities suitable for BPO investments. The scorecard, which assessed 30 locations across the country, ranked the cities using three criteria: availability of talent (50%), infrastructure (30%), cost (5%), and business environment (15%). The combined cities and municipalities of Santa Rosa City, Calamba City, Los Baños, Cabuyao and San Pablo City – or Metro Laguna – topped the Next Wave Cities scorecard as it ranked the highest in terms of the availability of graduates and workers.
CALABARZON Call Centers, Contact Centers, BPO, VOIP Companies:
BATANGAS
1. Advanced Contact Solutions, Inc.
2. TeleTech Customer Care Management Philippines, Inc.
CAVITE
1. TeleTech Customer Care Management Philippines, Inc.
RIZAL
1. Asia Global Connect
2. CQuadrant (Customer Care Contact Center)
3. Mega CallNet
4. TeleTech Customer Care Management Philippines, Inc.
5. Text Switch Unlimited, Inc.
LAGUNA
1. Advance Contact Solutions, Inc.
2. Allianz Solutions
3. Ascendas Pte Ltd.
4. Digital Telecommunications Phils., Inc. (DIGITEL)
5. eSYNERGYplus
6. FilWeb Systems Technology
7. HealthRecord Solutions Inc. HSI
8. Infinite Links
9. KGB Call Center
10. Precision Response Corporation (PRC
11. SunPower Shared Services Organization
12. TeleTech Customer Care Management Philippines, Inc.
13. TransCall Global
14. Convergys
B. Industry Performance
Philippines: Strong performance in key areas
Suitable and abundant talent
Considerable pool of generalist and specialist talent
Strong English skills, both verbal and written
Quality infrastructure
World-class telecommunications
Abundant and low-cost real-estate in major urban areas
Conducive business environment
Competitive incentives (e.g., income tax holiday)
Specialized programs addressing near-term issues (e.g., “near-hire” voucher program)
Local governments and national government supportive
Early strategic planning by DTI catalyzed industry
Operational performance
Among the lowest in labor costs
Genuine global reputation in voice with multiple signature locators
Source: Business Processing Association of the Philippines (BPAP). 2007. Offshoring and Outsourcing Philippines: Roadmap 2010. BPAP: Manila.
TALENT
Foremost among the intrinsic strengths that have drawn O&O to the Philippines is a sizable and skilled labor force. The nation produces nearly 500,000 college graduates per year across a range of disciplines that align well with the O&O industry. Nearly 150,000 graduates from business-related programs, while another 100,000 are from engineering or information technology (IT) programs. The Philippines is also one of the few countries that can boast a large number of English-speaking college graduates each year.
The proportion of the labor force considered suitable for O&O is as high as or higher than that of many other potential O&O destinations in Asia. According to human resources professionals interviewed across 24 countries by the McKinsey Global Institute (MGI), 30 percent of generalists and 30 percent of finance and accounting professionals in the
Philippines are suitable for work in a multinational organization, higher than in other Asian countries such as China, India, or Malaysia. For life sciences professionals, researchers, and analysts, 20 percent of the Philippines labor pool is considered suitable for global work, higher rates than those of either China or India.
This high-quality talent pool is also affordable. In a study by the MGI in 2004, the Philippines tied with India as the lowest labor-cost provider, with total labor costs roughly equivalent to 12 percent of the cost of equivalent jobs in the US. This labor cost competitiveness persists. In 2006, the MGI again estimated relative total labor costs and found the Philippines at 16 percent of the US across seven occupation categories, slightly higher than India but lower than the 15 other countries surveyed.
C. Market Trends
Current trends in offshore outsourcing
US financial crisis that started in 2008 changed several industries permanently; offshore outsourcing is not immune to the changes. Top outsource vendors successfully managed the global recession by adopting different global delivery models and by understanding customer’s business started providing direct business value in the projects. Customers from their part started managing their outsource vendors more efficiently and with better performance metrics they started getting maximum benefits in minimum cost.
Following are some of trends that are happening in offshore outsourcing:
1. Outsource vendor delivery model
Outsource vendors started with “Staff Augmentation” as the primary delivery model slowly changing to “Managed delivery model”. In staff augmentation, client sends RFP to offshore vendors asking for specific technical skills like Java, C++, Oracle DBA, etc. Outsource vendors respond to the RFP by sending their employee’s resume with an hourly rate. Generally outsource vendor with lowest hourly rate (cost arbitrage) wins the RFP. In this model customers did not have a way to find the business value provided by the contractors. “Yes” the customers saved money in their projects, but they do not have a way to specifically point out the business value added by those contractors. Also customer’s measurement did not include the time spent (and productivity lost) by their own employees in managing and training the contractors.
2. From cost arbitrage to managed delivery
The cost arbitrage model gave little or no incentives for the outsource vendors in providing other business values like quality, process efficiency, time to market, etc. In the managed delivery model outsource suppliers agree to deliver specific functionality for a given price. For example, customers outsource their call center operations with specific service level requirements like call wait time less than one minute per customer, number of calls processed in a given time etc. In the managed delivery model both client and the outsource supplier work closely from the beginning of the project, often client considers the outsource provider as a partner and gave full control in managing their own employees. Customers benefit from getting the desired services without managing the variable requirements of the contract resources needed for the projects. The new managed delivery model is getting wider acceptance in both onshore and offshore outsources projects. Compared to cost arbitrage model, in managed delivery model clients must spend significant up-front cost in working with the outsource vendor’s team in making them understand their business processes, IT infrastructure, project management, etc. So they may not see the ROI for a long time, but still customers are moving towards managed delivery model due to the benefits offered by the new model.
3. Different pricing models
In the managed delivery model customers started negotiating different pricing models like fixed price, transaction based, performance based, etc. For customers these new pricing models are helping to reduce their capital (capex) and operational expenses (opex). For offshore vendors it is helping to use their resources efficiently to achieve the SLA set in the outsource contract and to meet their profit margins.
4. Outsource vendor domain maturity
In the managed delivery model offshore vendors moved from lower to higher value chain, working closely with the customers, started offering business solutions that are strategic in nature. This is helping the customers to identify long-term need for the offshore vendor services and managing the project more efficiently. The offshore vendors are benefiting repeat business from their customers and it also helping them to sell their domain expertise to other customers in similar business verticals.
5. Outsource project metrics and accountability
Traditionally offshore outsourcing performance metrics was performed with the main focus on cost savings. But now in the managed outsource model, customers started measuring business value provided by the offshore teams. Typically both the client and the offshore vendor identify minimum number of measurable goals in the beginning of the project, add those goals in the SLA, and manage it throughout the duration of the project. This gives the client and the offshore vendor proper project governance in resolving issues that arises during the course of the project. The transparency provided by the new model is helping the offshore vendors to correct their mistakes and offer better service to their customers. In the post-recession world, both ITO and BPO changed for good, offshore vendors have to mange constant pressure to lower their cost and provide higher value services to their customers. This forced the offshore vendors to change their delivery model by utilizing highly skilled onshore and offshore teams to provide higher value to their clients. By seeing the success of India, other countries like China, Philippines, Mexico, etc., started competing for the outsource projects. This is creating increase in competition, decrease in price for the offshore vendors and ultimately benefiting the customers.
Reference: http://www.outsourceportfolio.com in a web publication dated January 13, 2010
D. Competitive Edge
Having captured around 15% of the global BPO market and 7% of the global BPO -IT services, the Philippines has been established itself as one of the most favored BPO service providers in the world next to India. The industry aims to pursue it global inroads by gaining 10% of the BPO-IT market in 2010. The key success factor of the country’s BPO industry rests mainly on its low cost but highly qualified English-proficient labor pool, its close affinity to Western culture, and the improved telecommunications infrastructure ideal for outsourcing operations. The Philippines is considered as the center for excellence particularly in the voice-based services. The educational system of the Philippines, wherein the medium of instruction is English, produces graduates who are highly proficient in the language. American clients more often prefer Filipino call center agents as compared to their Indian counterpart, because Filipinos have English accents almost similar to the North American agents.
The A.T. Kearney Global Services Location Index (GSLI)3 identified the Philippines as one of the best locations for BPO-IT services together with India, China, among others (Table 2). The country bested other top BPO-IT destinations worldwide like Singapore, Mexico, and Russia, among others, ranking 7th out of 50 countries in the 2007 GSLI. The Philippines ranks second to Vietnam in financial attractiveness which refers to the cost structure in the country. Included in this measure of competitiveness are cost incurred on labor, infrastructure and taxes. The Philippines has also been recognized as the offshoring destination in the 2007 UK National Outsourcing Association, and has been a finalist in the same category in 2008. According to studies, the Philippines has one of the lowest compensation cost in the world, but not necessarily in Asia. Non wage labor costs appear to be one of the lowest also due to the relatively low attrition rate in the country. For instance, the attrition rate in the contact center is relatively manageable at 60% in the Philippines as compared to 102% in India. Moreover, the good judgment call and the ability of Filipinos in solving complex problems make them more desirable in the contact center business. On the average, it takes one to two calls to solve a problem in the Philippines compared to six to seven calls in India. This partly explains the relatively low cost voice services in the country because customers need not make repetitive calls as compared to other call centers in other countries. (IDEA 2007) Despite having one of the highest corporate income taxes, the Philippines manages to attract BPO-IT firms due to its generous fiscal incentives and its generally competitive costs. The Philippines also compares favorably in terms of office rental costs, internet and broadband costs
E. Government Support
Together, the government and the BPAP had undertaken substantial efforts in promoting the Philippines as a prime BPO destination. Apart from the generous fiscal and non-fiscal incentives that augured well for BPO operations in the country, several activities and programs were undertaken in harnessing the BPO industry as a key driver of employment and economic growth. Recent government initiatives aimed at addressing the problems on labor shortage and the jobsskills mismatch in the BPO industry include the following:
Scholarship Programs. The “Training for Work Scholarship Program (TWSP)” had earmarked funds for IT industry to provide educational grants for the training of BPO applicants. The program issues training certificates to “near hires” or applicants whose qualifications fall just slightly below a hiring company’s skill requirements. As of December 2008, the BPAP distributed over 44,000 certificates worth P260 million. This translated to improvements in employment yield rates for BPO segments: contact centers (65%), medical transcription (86%), software development and animation (100%). The program was renamed “Pangulong Gloria Scholarship” (PGS) and provided bigger funding in 2009 amounting to P350 million. This aims to benefit 60,000 BPO trainees by providing them tuition reimbursements and training allowances.
5 Cited by BPAP in its report entitled “What’s Next? The Philippine IT-BPO Industry”
AdEPT. The Advance English Proficiency Training (AdEPT) program of the Commission on Higher Education (CHEd) aims to improve English proficiency of the Filipino labor force at par with the global standards. From only 10 AdEPT partner schools in 2008, it aims to partner with 110 to 220 schools targeting to benefit 5,500 students in 2009 and 2010. For school year 2010 to 2011, it aims to partner with 835 to 1,000 schools targeting 25,000 graduates. Complementing the government’s initiatives, the private sector has also undertaken the following programs that would support the development of the BPO industry:
Next Wave Cities. The concentration of BPO firms in outsourcing hubs like Makati, Ortigas and Cebu has resulted in a rapid increase of office space rents which prompted some companies to look for sites where there is huge potential talent pool and where rents are lower. The Department of Trade and Industry (DTI), the Commission on Information and Communications Technology (CICT), and the BPAP came up with a scorecard showing the next wave cities suitable for BPO investments. The scorecard, which assessed 30 locations across the country, ranked the cities using three criteria: availability of talent (50%), infrastructure (30%), cost (5%), and business environment (15%).

TOOL. The Training for O&O Leadership Pro gram (TOOL), a management development program BPAP developed in partnership with Ateneo De Manila Graduate School of Business and the De La Salle of Graduate School of Business intended to increase the number of capable managers for the BPO industry. In 2009, about 150 managers are expected to graduate from the program.
National Competency Assessment and Certification Program. The BPAP is also planning to launch the National Competency Assessment and Certification Program for entry level talent in the BPO-IT industry. This aims to develop a competency assessment test for graduating college students and career shifters who like to work in the BPO-IT industry. For the schools, this assessment test will help them develop and design curriculum acceptable to the industry. For BPO-IT companies, recruitment cost will be reduced further because selection will be targeted to those who possess the specified ratings for the particular competencies that the company requires. For the participants, this will help them determine the areas they would need to work on if they are targeting a career in the BPO -IT.
BPO Investment Missions and Conferences. Intensive marketing activities through trade missions and conferences, placements in major industry publications and broadcast media, among others, were also undertaken in order to promote the Philippines as a prime outsourcing destination. The “Experience Excellence, Experience Philippines” marketing campaign seeks to attract more companies to outsource in the Philippines by underscoring on Filipino excellence in outsourcing services. Investing in the Philippines is more than just doing business; it is the total experience that clients get when partnering with Filipinos, namely English proficiency, work ethics, hospitable culture, infrastructure and lifestyle. The country has targeted to capture 10% of the global BPO-IT market share by 2010.
Enabling Laws/Policies
Medium Term Philippine Development Plan 2004-2010 – Reduction of connectivity cost – Development of ICT Human Resource Executive Order No. 561 dated 19 August 2006 creating the Philippine Cyber Corridor, an ICT belt stretching 600 miles from Baguio City to Zamboanga designed to provide a variety of cyberservices at par with global standards, and supported by a $ Billion high bandwidth fiber backbone digital network
2010 Investment Priorities Plan provide fiscal and non fiscal incentives to IT/BPO services
Allocation of Php 350 million scholarship funds for the training of near-hires in IT BPO
Data privacy and protection are priority bills in Congress
F. Incentives
DOING BUSINESS IN THE PHILIPPINES
The business process outsourcing (BPO) and information technology-enabled services (ITES) sectors fall under the government’s Investment Priorities Plan, a list of promoted areas of investments issued annually by the Board of Investments (BOI) under the Department of Trade and Industry (DTI). As such, investors in the local information and communications technology (ICT) industry enjoy fiscal incentives such as income-tax holidays, exemption from taxes and duties on spare parts, additional deductions from taxable income, and exemption from wharfage dues and export taxes, duties, imposts, and fees. The government’s investment policies likewise provide non-fiscal incentives to ICT investors, which include employment of foreign nationals in supervisory, technical, or advisory positions; simplified customs procedures; and duty-free importation of consigned equipment.
The Philippine Economic Zone Authority (PEZA, www.peza.gov.ph) is a government corporation set up to oversee the promotion of world-class economic zones (ecozones) and the establishment of ready-to-occupy locations for foreign investments. The agency has put in place additional incentives for ecozone locators and IT investors, developers, and operators.
For ecozone developers and operators, the following incentives are available:
Income-tax holiday
Incentives under the Build-Operate-Transfer Law (BOT Law), including government support for accessing official development assistance and other sources of financing
Vital off-site infrastructure facilities
Option to pay a special 5% gross income tax, in lieu of all national and local taxes
Permanent resident status for foreign investors and immediate family members
Employment of foreign nationals
Assistance in the promotion of economic zones to local and foreign locator enterprises
For ecozone and IT locators, the following incentives are offered:
Income-tax holiday or a four-year exemption from corporate income tax, extendable up to eight years, with the option to pay a special 5% tax on gross income in lieu of all national and local taxes after the tax holiday
Exemption from duties and taxes on imported capital equipment, spare parts, supplies, raw materials
Domestic sales allowance equivalent to 30% of total sales
Exemption from wharfage dues and export taxes, imposts, and fees
Permanent resident status for foreign investors and immediate family members
Employment of foreign nationals
Simplified import and export procedures
Other incentives under Executive Order 226 (Omnibus Investment Code of 1987), as may be determined by the PEZA Board
Source: “PEZA Incentives”
The Board of Investments (BOI, http://www.boi.gov.ph), an attached agency of the Department of Trade and Industry (DTI), is the lead government agency tasked with promoting investments in the Philippines. The BOI assists local and foreign investors in appropriate and profitable areas of economic activities and offers a separate range of incentives to ICT investors, which include the following:
-Income-tax holiday
-Exemption from taxes and duties on imported spare parts
-Exemption from wharfage dues and export taxes, duties, imposts, and fees
-Tax credits
-Additional deductions from taxable income
Source: “BOI Incentives”
Detailed information on investment costs, including registration and tax rates, as well as tariff topics, are all available on the official DTI Website (www.dti.gov.ph).
In addition to the government’s proactive support and the cooperation of individual BPO firms, private groups like BPAP and sector-specific organizations bolster the Philippines’ value proposition as the top choice for ICT investment, assuring investors of cost-effective investment and efficient operations.
Rapid growth in O&O in the Philippines is also a consequence of government support through investment incentives, which are competitive with other destination countries. The incentive package offered through Philippine Economic Zone Authority (PEZA) includes an income tax holiday of six to eight years, a 5 percent marginal tax rate thereafter, and duty-free importation of capital equipment. In addition, the government supports O&O operations by expediting visas and permits for key personnel
These incentives have helped keep the Philippines competitive against other countries as an O&O destination. In a comparison between the Philippines and India, the net margin for locators after taking account of incentives is nearly identical.
Early government leadership of the industry’s development also helped put the Philippines on the map for O&O. Under the direction of the DTI, early players in the industry organized to promote and develop the industry. This led to the extension of investment incentives to O&O and a special incentive category for pioneer IT enterprises. It also helped deliver valuable marketing and promotion, as the government and the private sector championed the country’s competitive advantages as a location for O&O during investor and business development road shows.
Source: www.bpap.org Why the Philippines?
G. Investment Requirements
INVESTMENT REQUIREMENT (micro)
Working area requirement per call center agent 5 sq.m
Rent per sqm in Metro Manila P500/sq.m = Php 2,500.00
Add:
-Cost of Furnishing a cubicle 70,000.00
Computers with dialing equipment, voice switch, multiplexers, modems, routers and servers, Headsets, desktops, telephone cirtcuits, ACD (automatic call distributor)
COST PER SEAT = Php 72,500.00
X 10 seats
INITIAL INVESTMENT = Php 725,000.00
OVER ALL Investment P 1million to P1.5 million to get a contact center up and running. Industry analyst estimate that I would take 2 ½ years for a well managed call center to break even, a turn around time that’s quicker that that of most industries.
Source: How does a prospective entrepreneur put up and run a call center? By Rafael Santos from the Entrepreneur Philippine Magazine, January 2008 The Six Eleven Global Services Experience of Michael Bian, Davao City
PANGASIUS INDUSTRY
A. Industry Snapshot
Definition of the industry

Pangasius is the third most important freshwater fish and the fastest growing fish group within the aquaculture sector. It has a strong and increasing demand from current importing countries such as US, Europe, Russia and China with its fillet meat popular among high end restaurants. Few countries dominate the production and several value added products and options are available for the under developed local market.
Pangasius as a high value specie is highly suitable for processing into fillet which has a big demand among local restaurants and in the export market. It is estimated that *4,000 to 5,000 metric tons per year of Pangasius in all its product forms (around 2,000-3,000 MT of which is the fillet) are being imported from Vietnam finding their way to local upscale restaurants, hotels and supermarket in the country under several exotic names such as Cobbler Fish, Cream Dory Fish, Basa Fish among others. The demand for Pangasius is expected to increase with the growing food chains and the high potential of the fish as an organic product. (*Source: BETP/FFPD research presented during the Pangasius Industry Consultative Conference June 18, 2010 RODG, Makati)
Industry size, location and growth rate
National Scope
In 1981, Mr. Domingo Tapiador of the United Nations’ Food Agricultural Organization (FAO) brought from Thailand to BFAR NIFTC in Tanay, Rizal the Pangasius fish for experimentation. The river catfish (Pangasius spp) belonging to the family Silurida (Pangasidae) indigenous to the major rivers, reservoir and swamps in Thailand and the Mekong River Basin was considered to be an economically important food fish and were actually first brought in by private sectors engaged in the ornamental fish trade introducing it as freshwater hammerhead shark. Breeding, trial risk assessment and culture were conducted at the inland water facilities of BFAR in Tanay in 1985. Today, the fish is propagated nationwide where BFAR was able to train aqua culturists and eventually establish demo ponds. The hatcheries in Calabarzon are among the source and supplier of fingerlings in Central Mindanao where a thriving nursery, grow out and value added Pangasius is big business.
RDEX Food International Philippines located in General Santos City is a key player in the seafood processing in Central Mindanao. The company produces a wide variety of value added Pangasius, tuna, white shrimps and milkfish exported mainly to the US and Asian markets. For Pangasius, their supply is sustained by a farm producing an annual volume of 30 metric tons. Their processing plant is equipped with state of the art machineries and equipment and as to quality, the facilities and operations of the company is EU, USDC, US FDA, HACCP and BFAD accredited.
In Luzon, among the major players are Vitarich Corporation and Bluebay Aquaculture Inc. and in the Visayas INTAQ (Integrated Aquaculture Specialists Inc.).
Regional Scope
Fresh Industry. Calabarzon’s freshwater resources, infrastructure set up and its proximity to major markets are conducive to the culture and processing of Pangasius. While it is considered a recently located industry, the convergence of services to complete the value chain exists in the region.
In June 2010, during an industry mapping of the Pangasius players in the region, the following investments were located:
FSAP Company Inc. in Banjo East, Tanauan, Batangas producer of the Panga Royale Brand of processed Pangasius (ie; fillet, nuggets, fish fingers), Fishilicious Hotdogs and fish chicharon. The company is also into feed mill, fingerlings, growing out production and breeders.
Norberto Carmen Aqua Farm in Brgy Masiit, Calauan Laguna. A conservative aquaculture farm which is into hatchery, breeder and grow out of Pangasius. The farm sells choice cuts of the fish catering to the culinary requirements of several hostels and retreat houses in Tagaytay.
Ocean 3 Enterprises in Banca-banca, Victoria, Laguna, a facility devoted to hatchery of fingerlings, breeders and grow out culture of the Pangasius. Majority of their clients are aqua farmers from the Mindanao region.
St. Martha Farms in Teresa, Rizal, a farm of diverse interest from poultry, vegetable farming pick and pay scheme and very recently ventured into Pangasius hatchery and nursery.
B. Market Opportunity
The Philippine market has not been saturated; this is the biggest opportunity for catfish growers to fill in the growing demand of the market. Today some fast food corporations like Mcdonalds and other restaurants are now using Pangasius for their fish burgers and other products while other big and prestigious restaurants use Pangasius as their main menu.
The current market demand is estimated at *4,000 to 5,000 metric tons per year (all product forms – live,fresh and frozen fillet). About 2,000 to 3,000 MT of this requirement is for Pangasius fillet.
The Philippines imports 4,000-5,000 metric tons per year of Pangasius products in all its forms from Vietnam and is currently sold at Php 180.00-300.00 per kilo depending on type/color while locally cultured Pangasius whole are sold at ex-farm price ranging from Php 80-100 per kilo. The Pangasius fillets are supplied to food chain stores, supermarkets and restaurants. (*Source: BETP/FFPD report presented during the Pangasius Industry Consultative Conference June 18, 2010, RODG Makati
Market Trends/Opportunities
High demand in the local market
Filipinos are highly adoptable and have now started to accept Pangasius
Processing plants are now ready and some are processing Pangasius for the domestic market
Fish have started to be seen in the wet market and offered in varied menus in specialty restaurants
In the economic aspect, dollar-peso exchange continues to rise
As to image and reputation, the deteriorating image of exporting countries
MarketingStrategy. Expand the market by introducing fresh/frozen, whole/sliced Pangasius in the domestic market, and then explore the exports market once the domestic market is saturated and has enough volume. How?
Penetrate food outlets serving seafoods or native menus;
Introduce to the public market through the fish brokers and traders;
Study consumer demand (public market) of Pangasius versus Tilapia and Bangus;
Conduct of business opportunity seminars to cover discussions on potentials of Pangasius industry, technology or production, financing windows, market matching, distribution of project profile during the break – out session;
Strengthen the industry cluster/stakeholders in all regions; establish network among players.
Bottom Up Budgeting Project

Development is evident in the Bottom up Budgeting (BUB) Project of the Department of Trade andIndustry (DTI). With its main mission to provide funding to cooperatives, they aim to develop not only their business handling skills but also improve their product quality. A clear example of growth can be seen in the story of the Likhang Kamay Kalambenyo Producers Cooperative.

The Likhang Kamay ng Kalambenyo Producers Cooperative started with just a group of women with a longing to create beautiful crafts with their hands. As a first step, they attended basic trainings specifically on bead work, crochet and water hyacinth upgrading which was then conducted by the Cooperatives and Livelihood Development Department (CLDD) under the City Government of Calamba.

This was not an easy feat, with the group being composed of farmers, shop keepers, full-time mothers and senior citizens. However, their need far outweighed the hardships they had faced. With their scissors, hooks, needles and their babies keeping them company, these remarkable individuals trained twice week, some for even five days a week for almost four months on basic weaving, crocheting, designing and dyeing.

As CLDD saw the sincerity of these women in making something of themselves, LKKPC was given an opportunity for further training and product development thru the BUB Program of the City Government of Calamba in partnership with the Department of Trade and Industry. A total of Php 1.1 M was delegated to the Project LILY Phase 1 and Product Development and Branding Program.

Project Lily Phase 1 provided a series of training to the participants in all aspect of water hyacinth-based production: from preparation of raw materials to finishing and packaging. The trainees were taught how to properly treat the materials, color, weave or leatherize and design their own products.

Moreover, proper management of production lines was also applied for greater efficiency. Product Development and Branding immediately followed the heels of Project Lily. This program ensured that the products of the group would be presentable and saleable in local markets.

With the final objective of the BUB project to promote the LKKPC and their products in local trade fairs such as KALAKAL Calabarzon and Manila Fame, they invited skilled trainers to further develop the skills of the cooperative’s members. They invited Mr. Rey Luciano P. Soliven, DTI’s top most authority on product branding and promotion. He conducted a series of trainings and focus group discussions to orient the women in product improvement, branding and logo making, visual merchandising and booth designing. Meanwhile, other DTI resource persons such as Mr. Clark S. Nebrao, Mr. Dennis Orlina of Philippine Trade Training Center and Mr. Cesar Pasco trained the group on costing and pricing of products, dynamics of negotiation with buyers and alternative ways on dyeing and treating of water hyacinth-based products.

To test the marketability of the products, the group was able to join several city trade fairs namely the City Hood Trade Fair (CLDD sponsored), SM Recyclable Fair and SM Senior’s Week Fair, and the ANILAG Festival in Sta. Cruz, Laguna. The group also put up a booth for a month-long display in Metro Checkpoint Mall. These trade fairs precipitated an evaluation of the products to be produced by the cooperative which in turn resulted to a lot of product improvement and designing.

With overwhelming effort, LKKPC finally introduced their products made from water hyacinth, beads and crochet to the local market during the KALAKAL CALABARZON Fair sponsored by DTI last October 12-16, 2016 at the Megatrade Hall B, SM Megamall. The event brought several customers who bought crocheted pouches, water hyacinth slippers and beaded bags. Some of these clients even placed orders and promised to keep in touch for future transactions.

From the skills trainings provided and funded by the BUB Project, indeed, it was a very satisfying venture for Likhang Kamay ng Kalambenyo Producers Cooperative. They were able to see their growth individually and as a cooperative. Through the BUB Project, the LKKPC members were able to see their full potential in order to face the bigger challenges that will come in the future.

Rise of Opportunities: The Establishment of Negosyo Centers

Living up to its mission and vision, the Department of Trade and Industry (DTI) – Laguna in partnership with different local government units (LGU) has successfully established five (5) Negosyo Centers (NCs) in the province of Laguna.  Pioneered by the establishment of NC Los Baños in September 2015, DTI – Laguna continued to bring their services closer to the people by establishing NC Victoria (November 2015), NC San Pablo (July 2016), NC Pagsanjan (September 2016), and NC Biñan (October 2016). Now, the preparation for the establishment of NC Sta. Rosa is underway for its launching on November 25, 2016.

The implementation of Republic Act No. 10644, otherwise known as the “Go Negosyo Act”, is clearly visible in the establishment of these Negosyo Centers. These Negosyo Centers shall be responsible for promoting ease of doing business and facilitating access to services for Micro, Small, and Medium Enterprises (MSMEs) within its jurisdiction. The Negosyo Centers have three (3) main services offered to the people; business registration assistance, business advisory services, and business information and advocacy.

Upon the establishment of the five (5) Negosyo Centers, there have been a large number of assisted MSMEs, registered businesses, and trainings conducted. These trainings cover topics of relevance for the development of existing and potential MSMEs.Through these services, the Negosyo Centers gathered a lot of positive feedback from the citizens of the different municipalities.

Following the success of the fruitful and productive year, DTI – Laguna has set a new target of eight (8) Negosyo Centers to be established in 2017. This step will bring DTI’s services closer to more citizens thereby providing more opportunities to potential and existing MSMEs.

Shared Roasting Facility for Café Amadeo

The surge of coffee shops augurs well for the burgeoning coffee industry in the country.

A lot of young coffee shop patrons may be surprised to learn that a couple of centuries ago, quality Philippine coffee was in demand the world over making it the fourth largest coffee-producing country in the world. But in the last quarter of the 19th century, coffee, ‘rust’ decimated the industry.

The Philippines is reclaiming its rightful place in the world of quality coffee blend hence, in 2001, the Provincial Rural Industry Development Committee and the government of Cavite got together to revitalize the Cavite coffee industry. Of the nine coffee growing municipalities in the province, the municipality of Amadeo stood out in terms of hectarage planted, production, and number of coffee planters. On 28 June 2002, Amadeo Development Cooperative with 15 members and PHP137,500 as initial capital. The cooperative started by selling premium green coffee beans and much later engaged in producing ground coffee.

Then, with subcontracted roasting services costing PHP12.50 per kilo, this easily spelled out a hefty PHP18,750 for roasting 1,500 kilos of coffee beans a month. The answer to deflect large expenses came in December 2013 when it got a roasting facility from the DTI worth PHP560,000.

Not only did the machine address the roasting needs of the cooperative, it also saved the group valuable processing time by subcontracted companies. The production process is now accessible, faster, and inexpensive.
Today, 80 local farmers and three millers benefit from the project. The original 15 members have expanded to 209 active members. The cooperative used to produce 1,000 to 1,500 kilos to produce 3,000 to 3,500 kilos a month. In 2012, it grossed PHP9,621,827 and netted PHP649,113 income improving further in 2014 with PHP14,483,082 gross income and PHP2,226,187 net.

As an enterprise, Café Amedeo has been growing with total assets of PHP8,663,653 as of December 2014. With aggressive promotion, diversification, and value proposition as marketing strategies, it is not farfetched that it could become a medium scale enterprise by 2016.

From Pesky to Pleasant

The Province of Laguna is blessed with natural attractions and a rustic charm. It is where the past blends with the present, and man is one with nature. Not only that, it is a businessman’s haven and a traveler’s prime destination.

One of Laguna’s pride and joys is the Laguna de Bay. It is the largest lake in the country with 220 kilometers of shoreline and a 949 square kilometer area. It also the home of water hyacinths, which were considered a nuisance not so long ago. With the help of Laguna Livelihood Emergency Employment Accelerated Program (LEAP), the water hyacinth slowly became a source of livelihood, so far from their infamy as blockers of waterways.

The Laguna Water Hyacinth Handicraft Producers Association, Inc is one such group of people that benefitted from the pesky hyacinth. Located in Los Baños, the group’s production area is backed up against Laguna de Bay, providing them a consistent supply of water hyacinth. With the innovation and creativity of its members, the association was able to turn the problematic and invasive water hyacinth into works of art, like bags, shoes, mats and other decorative items.

Laguna Water Hyancinth Handicrafts

They are beneficiaries of the Shared Service Facilities (SSF) project, and were provided with a dryer, dyeing vat, sewing machines and electrical flatteners.

“Before, it took us 10 days to completely dry the stalks. With the dryer, it was reduced to 5 days, and we can dry the water hyacinth during the rainy season, whereas before, we do not have production during rainy days!”, said Remia V. Adedoja, president of the association.

“Originally, we used empty bottles of liquor to flatten the water hyacinth stalks. This process is tedious and eats up a lot time. Our arm muscles are painful after a long time of pressing!”, lamented another association member.

With the assistance DTI Region IV-A has provided, their sales increased to Php1,190,000 in 2015, and they were able to hire 42 full time workers from the original 25. They also provide house wares to establishments like Taal Vista Hotel, Acacia Hotel, The Suez Boutique Hotel and SM City Calamba. In the same year, they were able to export picnic baskets made of the hyacinth with cloth linings to the Japan market.

Laguna Water Hyancinth Handicrafts

Truly, the Laguna Water Hyacinth Handicraft Producers Association, Inc has captured the hearts of the local and foreign markets with their world class design and craftsmanship.

The Success in Darak

Who would have thought that darak or rice bran that is commonly fed to pigs or thrown away could be turned into beauty products and be a profitable business venture? A woman entrepreneur from Laguna province has this success story.

Ms. Sherill R. Quintana started with selling candles and beauty products over a decade ago when there are only few players in the industry and limited supplies were available. Her first exposure was during the Barakalan 2001, a DTI IV-A organized trade fair where she got several contacts and buyers. Her first taste of direct exports came in 2002 even reaching shelves of Macy’s New York. By the year 2007, she was able to put up her own stall in a mall in Laguna and named it to Kutitap. But just like any other business, Ms. Quintana faced a big challenge when the products from China came into the scenario. She then lost her major clients locally and abroad.

The Success in Darak

Instead of giving up and going back to work, Ms. Quintana rocked brains on research, prayed really hard and embarked on product development with the help of DTI and DOST, until she stumbled to darak. In 2011, she renamed her business to “Oryspa Spa Solutions”, the first in the country to provide spa products in the wellness sector made out of rice bran oil. Quintana’s Oryspa business has a wide range of products including massage oil, soap, shampoo, lotion, perfume, body scrub, among others.

In a period of four (4) years, she grew the business from toll manufacturing to a franchising company which today has over 20 branches across the country and 2 outlets in Singapore.

DarakThe Success in Darak

With her success, she gained recognition from different local and international organizations such as: Most Promising Filipino Franchise of Franchise Excellence Awards 2015; Philippine nominee for ASEAN Business Awards for two categories: ASEAN Women Entrepreneur award and ASEAN Priority Integration Sectors Excellence Awards for Healthcare 2015; Outstanding Young Entrepreneur 2015 in South Luzon by the PCCI; and one of the Go Negosyo Inspiring Filipina Entrepreneur of Go Negosyo Filipina Summit 2016. She is also a motivational speaker for APEC, Go Negosyo, PCCI and DTI. Currently, Ms Quintana is working on her book about her entrepreneurship journey to inspire more Filipina to venture into business.