Why Clark is the best offshoring location in the Philippines

Why Clark is the best offshoring location in the Philippines
Mark Engelmann
Mark Engelmann
    5 minute read

When you’re trying to work out which outsourcing provider is best suited to you, you should pay attention to where each provider’s offices are located. In the Philippines, there are distinct differences between business precincts, and the guidelines and laws that govern foreign companies in these zones. Beepo is located in the Clark Freeport Zone; we chose Clark over numerous other popular offshoring destinations in The Philippines; here’s why….

Clark Freeport Zone

Clark is located right next to Angeles City, approximately 80 kms north of Manila. Being a Freeport Zone, Clark was created by The Philippines government as a special zone aimed at fostering foreign business investment in the country. Up until 1992, Clark was the home of a US military base, and as such still benefits from much of the infrastructure built by the Americans; including sealed roads, underground sewage and storm water drains, and reliable electricity provision. Since control was ceded to The Philippines government, they have also laid a world class fibre optic backbone within The Clark area. This infrastructure ensures foreign businesses of all sizes and types have the basics at hand to ensure reliable utilities and internet services that are equal to western standards, if not, better.

In terms of on the ground security, Clark has its own Police Force and is also home to a Philippines air force base. Clark is also home to hundreds of businesses including Samsung, Yokohoma Tyres and Texas Instruments among others.

In terms of accessibility, Clark has its own international airport and a number of 5 star hotels including a Marriott and Hilton, only 5 mins from the Beepo office.

The Clark Freeport Zone is also unique in that businesses do not need Philippines nationals as shareholders; which means Beepo is 100% Australian owned. This is in contrast to other parts of The Philippines that require Filipino shareholders.

Clark is managed by the Clark Development Corporation (CDC). The CDC has a no corruption policy, which is strictly enforced. As an example, CDC officials will not accept a gift of any size; not even a branded pen! In addition to the no corruption policy, the CDC also receives its mandate directly from the President’s Office. This means there is no interference from local governments and assurance that businesses in the Clark Zone are protected..

Some of the benefits to conducting business in Clark as opposed to other popular Philippines outsourcing destinations are:

  • Security

    Clark is a gated “zone” with unique security features, such as restricted access to only those working or visiting the Zone. There is extensive CCTV, dedicated check points in and out of the Zone; and it is also a joint training destination for The Philippines and United States military.

    In addition, PLDT, the leading telecommunications company in the Philippines have cited Clark for its ideal environment for electronic-business, and data storage and protection. Owing to its natural characteristics and existing facilities, the industry leader has chosen Clark to invest PHP1.3-billion in its new Vitro Data Center Clark.

  • Accessibility

    Manila has been voted as the worst city to drive a car in the world. Metro Manila is a conglomeration of 16 cities and is highly congested, housing over 12.8 million people; it can sometimes take hours to drive only 10’s of kilometres. This congestion obviously creates issues for business travelers, but with regard to outsourcing, it can make it difficult for Filipino employees’ punctuality, work performance and job retention. This scenario is not unique to Manila and is quite common in other parts of The Philippines as well.

    In contrast, Clark is predominantly home to businesses, which means it contains very little residential housing. This takes a massive load off the road infrastructure in Clark and makes it easy for employees and business people to commute to and from their destinations.

  • Weather-proof

    Clark is situated on the west coast of the central Philippines island of Luzon, only 80 kms north of Manila. Due to the infrastructure constructed by the US Military, Clark deals with severe weather events really well. The underground drainage prevents any flooding and the electricity and internet networks are super reliable with almost 100% (>99%) uptime.

    In addition to the great infrastructure in Clark, its position on the west coast protects it and nearby Angeles City from the massive typhoons that tend to hit The Philippines east coast.

    Compare this to Manila, where storm water drainage is obsolete and inadequate. This causes severe flash flooding during monsoonal weather events, which results in staff being late or not being able to attend work at all! The end result being unplanned outages and a lack of business continuity.

  • Work/Life Balance

    Most of the Clark workforce lives in nearby Angeles City which is officially about 8kms away; however, in reality, the city and the freeport basically meld into one another. This means it is easy for staff to travel to work with most living within a 45 minute commute. This is considered a comfortable commute, which means it is unlikely that distance to work would be a reason for staff attrition. Most people living in Angeles and working in Clark have grown up in the local area, live near their extended families and have the time available to enjoy life outside of work and the associated commute (which can be up to four hours each way for some people living in Metro-Manila!). We even have staff, who live in Manila, but work at Beepo as the commute to Clark is shorter than what it would be for them if they worked in Manila.

    An issue that often plagues employers in Manila is ‘job-hopping’. Many Manila based workers move there from the regions for the increased job opportunities. This means they generally do not live close to family members and have to deal with the horrendous commutes that are often the scourge of Manila based workers. With these factors in mind, Manila workers are often chasing higher paying jobs; which means staff attrition can be high. For outsourcing customers this can increase the training overheads involved in managing an outsourced team.

The Clark region has big plans including New Clark CIty with construction starting in 2022. The plans for the city include:

  • 5 districts - Government, business, education, agriculture, and recreation

  • A focus on environmental sustainability and climate resilience

  • New technology to reduce energy and water usage

  • Driverless electric cars to assist workers and visitors in getting around

  • A sports stadium and agro-industrial park

The new city aims to alleviate congestion in Manila, but also further modernise The Philippines and ultimately see Manila become the ‘old city’.

As you can see, there is a lot to consider when integrating an outsourced team within your business; and the location of your provider is one of them.

To understand all of the other considerations read our ebook, ‘33 Questions to Ask Your Outsourcing Provider’ and start your outsourcing journey off on the right foot.

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