Megacenter the Mall: ICT Hub in Cabanatuan City

1. Cabanatuan City as an ICT-enabled services hub for Central Luzon:Megacenter the Mall Information Brief9-2004

2. Megacenter the Mall Information Brief 9/2004 Chas Realty is primarily responsible for this /information packet and its contents. Knowledge Institute’s (KI’s) assistance was limited to assembling the information, which are based solely on the plans, studies conducted by, and any other information furnished by Chas Realty. Knowledge Institute (KI) did not examine the underlying assumptions used in the information packet and other data included in it and accordingly, KI does not provide any assurance on the accompanying assumptions. The Knowledge Institute is an affiliate of SGV & Co (a member practice of Ernst & Young Global). All inquiries, requests for clarification and additional information must be directed to Chas Realty and Development Corporation (c/o Denise Huibonhoa <denisehuibonhoa@yahoo.com> / Telefax: + 632 810 1625 / Mobile: + 63 918 938 8047).

3. Executive Summary • IT enabled industries, such as contact centers and business process outsourcing (BPO) companies, continue to be a “sunshine industry” in the Philippines. While Metro Manila has attracted several top global and local operators, these IT enabled companies are beginning to look beyond Metro Manila and into other locations in the Philippines • The availability of skilled labor, developed infrastructure, more affordable labor costs, and the lower turnover of employees are some of the factors that have attracted operators to locate in northern and southern Philippines • Central Luzon provides a closer and attractive option for locators looking to expand or to build new businesses. According to the Department of Trade and Industry, Central Luzon is “one of the most dynamic and aggressive regions in the Philippines…It serves as the gateway for European and American enterprises wanting to penetrate Asia”1 • Nueva Ecija is the largest province in Central Luzon and the “food basket” of the area. It is situated within the “W” growth corridor which defines the key growth areas in Central Luzon. It is a first class province based on income classification • Cabanatuan City is the most populated area in Nueva Ecija with over 220,000 individuals and is home to Central Luzon’s best educational institutions such as the Nueva Ecija University of Science and Technology (NEUST) and Wesleyan University. The presence of a pool of skilled labor, developed telecommunications infrastructure, continuous power supply and security make Cabanatuan an ideal option for IT enabled industries locating in Central Luzon • Megacenter the Mall (a development of Chas Realty) in Cabanatuan has 4,000.00 sq. m. of existing, contiguous floor space that is PEZA approved and well suited for IT enabled services looking to locate in the city 1 http://www.dti.gov.ph/contentment/9/60/64/476.jsp

4. Outline • IT enabled industries, such as contact centers and BPO providers are locating outside of Metro Manila • Cabanatuan, located in Nueva Ecija (Central Luzon), has favorable factors that support IT enabled industries • Megacenter the Mall in Cabanatuan City, has available 4,000 sq. m. of contiguous space that is PEZA approved and highly suited for IT enabled operations

5. IT enabled services consider several factors in locating in a particular geography Availability of Skilled Manpower Real Estate Expenses • Lease costs • Sale prices • Literacy and ability to speak/understand English • Critical thinking skills • Depth of labor pool Transportation • Accessibility • Vehicle and road systems Communication Facilities • Local and long-distance telephone service providers • Postal/package delivery services • Availability of redundant telco providers Investment Incentives • Tax holidays, credits, refunds Utilities Business Costs • Cost and reliability of power and water • Registration costs • Other fees and dues Living Conditions • Health • Leisure • Education • Security

6. While Metro Manila (particularly Makati, Pasig and Eastwood) has been very successful in attracting IT enabled industries, operators are beginning to explore areas outside for several reasons • There is a presence of a skilled labor pool outside of Metro Manila • Piracy of human resources in Metro Manila is causing an increase in wages, re-training time and other indirect costs • Costs outside of Metro Manila are generally lower and provide companies with higher margins • Companies may want to put up several sites for redundancy purposes

7. Several alternatives/complimentary sites to Metro Manila have emerged. Companies have announced their plans to set up in other areas and… Selected Operators Outside of Metro Manila Cebu People Support, Sykes, eTelecare, Western Wats, Teradyne, Page Computers Dagupan Indiscussions Baguio Client Logic Dumaguete Epixtar Clark Cyber City AOL Laguna Advance Contact Solutions, All Asia Customer Service, Cyber City Teleservices, AOL Member Services Davao In discussions …Cabanatuan City, located in Nueva Ecija (Central Luzon), presents itself as an attractive location for IT enabled service providers Source: IT Matters, Company announcements

8. Outline • IT enabled industries, such as contact centers and BPO providers are locating outside of Metro Manila • Cabanatuan, located in Nueva Ecija (Central Luzon), has favorable factors that support IT enabled industries • Megacenter the Mall in Cabanatuan City, has available 4,000.00 sq. m. of contiguous space that is PEZA approved and highly suited for IT enabled operations

9. Nueva Ecija, the largest province and the “food basket” of Central Luzon, is situated within the “W” Growth Corridor* which defines the key growth areas Assessment • Central Luzon provides a closer and attractive option for locators looking to expand or to build new businesses. Central Luzon is “one of the most dynamic and aggressive regions in the Philippines…It serves as the gateway for European and American enterprises wanting to penetrate Asia.”* • Nueva Ecija is a first class province based on income classification with a labor force of over 650,000 individuals (out of 1.6 million inhabitants) * Department of Trade and Industry

10. Aside from having a large population, literacy rates are comparable with Metro Manila while having lower manpower costs Labor Force Lower manpower costs – approximately 13% lower than Metro Manila Source: Department of Trade and Industry * Source: Nueva Ecija website, NSO

11. Located in the heart of the Province of Nueva Ecija, Cabanatuan City is approximately 117 kilometers north of Metro Manila Assessment • Cabanatuan has a land area of 282.75 square kilometers and is the most populated city in Nueva Ecija with more than 220,000 inhabitants • It is the 35th most populous city in the Philippines (out of 114) • It is home to Central Luzon’s best educational institutions • The presence of a pool of skilled labor, developed telecommunications infrastructure, continuous power supply and security make Cabanatuan an ideal option for IT enabled industries locating in Central Luzon Source: Cabanatuan City Planning & Dev’t. Office

12. Transport to and from Cabanatuan is primarily land based and is only a few hours away from other major areas Clark, 2 hours Subic, 4-5 hours 3-4 hours Source: Cabanatuan City Planning & Dev’t. Office

13. Cabanatuan is home to Central Luzon’s leading universities… UNIVERSITY COMMENT NEUST has became a symbol of higher learning toward the advancement of vocational and technological education in Central Luzon. Has an average enrollment of over 8,000 students in all academic levels. As a reputable State University, NEUST qualifications are accepted world-wide, including the United States, United Kingdom, Australia, Hong Kong and many other countries for employment in the public and private sector. Has over 3,000 students in management and IT related courses and over 2,000 students in engineering related courses Nueva Ecija University of Science and Technology Wesleyan University-Philippines has an average enrollment of 6,700 students in all academic levels, employs nearly 500 faculty and staff members, and boasts of some of the best school facilities one can find north of Metro Manila. Over 3,000 students are in the College of Nursing Wesleyan University Source: University websites, university registrar …which attracts individuals from other nearby areas, contributing to the availability of skilled manpower

14. Out of the over 28,132 students enrolled in the Cabanatuan-based colleges, a large number are majoring in nursing (26%) or management (20%) Assessment College enrollment profile by course, 2003-2004 • NEUST, Wesleyan, and Araullo Universities account for 77% of college enrollment. The total graduates of the 3 universities for 2003 was 4,904 • Enrollment breakdown for all: • nursing 7,352 • management 5,535 • engineering 4,198 • IT related 3,465 • education 3,183 • criminology 2,273 • others 2,126 Source: University registrars

15. CABANATUAN JOB FAIR ENGLISH EVALUATION CHART

16. Universities Colleges IT Schools Business Stations Aside from being an educational hub, Cabanatuan is also the center for trade and commerce in Nueva Ecija Establishments • 3 Private & Public Universities • 8 Private & Public Colleges • 49 Public Primary Schools • 5 Public Secondary Schools • 6 Vocational Schools • 37 Major and Local Banks • 69 Financing & Lending Investors • 2,704 Registered Business Establishments • 6 Private & Public Hospitals • 78 Medical, Optical, Dental and Skin Clinics • 61 drug stores and pharmacies Central Business District MAP OF CABANATUAN CITY PROPER Source: Cabanatuan City Planning & Dev’t. Office

17. Cellular Phone Operators Package Delivery Satellite Feed Multinet Cable TV Telecommunications infrastructure is developed: fiber optic cables and high speed broadband connections are available. Central Luzon, outside of the National Capital Region (NCR), has the 2nd highest telephone density* (out of 15 regions) Communication Facilities Telecommunications Source: Cabanatuan City Planning & Dev’t. Office * Source: National Telecommunications Commission, 2003

18. There is a stable and reliable supply of power. Power rates in Nueva Ecija are lower by 15% as compared to the NCR Power and Water • Cabanatuan City Electric Corporation (CELCOR), a private franchise power firm, is the franchise holder for the operation and provision of electric service in the city. Its source of power comes from its own Bitas Power Plant with ample support from the National Power Corporation • Nueva Ecija is the location of the largest hydro-electric dam in the country, the Pantabangan Dam (100 MW), which provides ample supply of power, irrigation and potable water to all the towns of the province • The Cabanatuan City Water District (CCWD) sources water from 15 deep wells within the distribution system. There are presently about 108 kms of distribution piping ranging in size from 50mm to 300mm. This water system has a total of 14 pump houses with a capacity of 800,000 cu.m. per month Source: Cabanatuan City Planning & Dev’t. Office

19. Cabanatuan City also offers excellent living conditions and provides a metropolitan lifestyle Living Conditions • Health: • Health facilities are manned by doctors, majority of whom have specialized abroad with well-trained staff and personnel • 6 hospitals • 78 clinics • Educational System: • Institutions for learning in Cabanatuan provide a wide range of educational opportunities to residents and students from neighboring municipalities and provinces • 49 elementary schools • 5 secondary schools • 8 colleges • 3 universities • 6 vocational and technical schools • Leisure/Tourist Areas: • The continuing government support in the development of tourist potentials in the city will further improve the commercial climate in the city • 21 hotels and inns • Sports facilities, playgrounds, golf courses Source: Cabanatuan City Planning & Dev’t. Office, Sta Lucia Realty Web Page http://staluciarealty.com/project-LakewdCity.htm, LPHI Web Page http://www.lphi.com.ph/

20. In addition, a stable and business oriented local government is highly supportive of ICT enabled businesses CABANATUAN CITY OFFICIALS Hon. JULIUS CESAR V. VERGARA City Mayor Hon. Raul P. Mendoza City Vice Mayor City Councilors Hon. Mario R. Seeping Hon. Voltaire S. Chua Hon. Aurora E. Golpeo Hon. Jesus M. Diaz Hon. Laverene S. Manangbao Hon. Raqueliza A. Agapito Hon. Ruben A. Ilagan III Hon. Ramon S. Garcia Hon. Angelito G. Saclolo Hon. Augusto Santiago Hon. Maricel Garcia NUEVA ECIJA OFFICIALS Hon. TOMAS N. JOSON III Governor Hon. Mariano Cristino N. Joson IV Vice-Governor Provincial Representatives Hon. Josefina M. Joson Hon. Eleuterio R. Violago Hon. Aurelio Umali Hon. Rodolfo W. Antonino

21. Outline • IT enabled industries, such as contact centers and BPO providers are locating outside of Metro Manila • Cabanatuan, located in Nueva Ecija (Central Luzon), has favorable factors that support IT enabled industries • Megacenter the Mall in Cabanatuan City, has available 4,000.00 sq. m. of contiguous space that is PEZA approved and highly suited for IT enabled operations

22. Universities Colleges IT Schools Business Stations Megacenter the Mall is located in the heart of Cabanatuan City, 5-10 minutes away from all the major universities and is easily accessible by various means of transport at any time of the day Megacenter the Mall is located in the heart of Cabanatuan City Central Business District MAP OF CABANATUAN CITY PROPER Source: Cabanatuan City Planning & Dev’t. Office

23. Megacenter the Mall is a 5-storey commercial complex on a 5.5 hectare property • Megacenter the Mall boasts dynamic, ultra-modern facilities for the ultimate shopping, dining and entertainment experience. In operation since 1998. • Megacenter the Mall’s emphasis is on the shoppers’ convenience and freedom of circulation coupled with maximum visibility and exposure to the mall’s retail tenants (nearly 400 stores, boutiques and kiosks). • AMENITIES INCLUDE • 500 free parking slots • Shuttle service from Megacenter the Mall to Cabanatuan Central Terminal (available until 8PM) • Tricycle & jeepney rides (available 24 hours) • FEATURES: • Poulex, Cabanatuan’s most modern department store & supermarket • A 20-outlet, 1000-seat food court • 4 theaters with DTS & Dolby Digital Sound • A family amusement center • 8 escalators, 2 passenger and 2 freight elevators Source: Chas Realty

24. The 5th level offers a 4,000.00 sq. m. space that is PEZA approved and ideal for locating an IT enabled operation • The area offers: • Contiguous and level floor area for easy monitoring of workers / agents • An attractive space that is secure • Entertainment, shopping and food areas within easy reach • Substation generators rated at 1750kw at 460 Volts and 120kw at 230 volts can run for 24 hours at 70% tolerable load • Mall's telecommunication facilities provided by PLDT and DIGITEL • Air conditioning system of the mall is provided through four units of water cooled chillers at 375 TR each. All equipment is 100% operational