Cebu’s Tech Sector Attracts Global Firms Amid Expansion

Cebu’s burgeoning technology sector is drawing increased interest from international companies, with Japanese firm Sansan, Inc. significantly contributing to this growth.

The city’s appeal lies in its lower operational costs, reduced congestion, and a steady influx of skilled graduates, positioning it as a viable alternative to Metro Manila for tech enterprises.

“Cebu’s advantages over Metro Manila include lower operating costs and lighter congestion,” said Jay Pegarido, Country Manager at Sansan Global Development Center (SGDC).

“Average rent prices in Cebu are 37% below those in Manila, which is a compelling incentive for businesses looking to establish offices.”

In 2023, Sansan launched SGDC in Cebu, employing over 80 software developers with plans to exceed 100. The initiative offers full-time positions, allowing engineers to lead projects and contribute to global product development.

“Sansan has played a decisive role in Cebu’s rise as a tech center,” Pegarido noted. “Our investments in career development programs, continuous learning, and university partnerships further bolster Cebu’s reputation as a prime destination for international tech ventures.”

Cebu’s Information Technology and Business Process Management (IT-BPM) industry has been a significant economic driver, generating $32.5 billion in revenue in 2022 and employing over 121,000 professionals.

The city’s business-friendly environment and expanding tech ecosystem have attracted multinationals seeking a presence beyond the capital.

Comparatively, Davao shares traits with Cebu as an emerging tech hub, including government support and a growing number of IT graduates.

However, Davao’s tech sector is currently more focused on BPO and agritech, with infrastructure development still underway.

“Davao has huge potential,” Pegarido stated. “As local infrastructure improves and additional investors enter the market, it could emerge as a great alternative to Cebu or a complementary second destination.”

Other cities like Bacolod and Iloilo are also experiencing economic growth and could become future tech hubs.

Critical factors for their development include investing in a highly trained workforce, strengthening infrastructure, and implementing government incentives to attract foreign investment.

“A concerted effort by both public and private actors could ultimately position Bacolod and Iloilo alongside Cebu and Davao as leading innovation hubs,” Pegarido added.

Sansan addresses talent development and retention in Cebu by offering full-time employment, providing stability and project ownership for engineers.

Collaborations with local universities offer hands-on programs, internships, and training aligned with industry needs. “These efforts help bridge the gap between academic theory and industry demands, equipping new graduates with relevant skills,” Pegarido explained.

Decentralizing the tech industry from Metro Manila to other cities can alleviate congestion in the capital, enhance quality of life for professionals, and stimulate broader economic development.

Regional tech hubs create local job opportunities, expand the country’s talent pool, and attract multinational corporations. “Over time, a distributed tech ecosystem can strengthen the Philippines’ standing in Southeast Asia,” Pegarido observed.

Global companies like Sansan play a crucial role in offering meaningful, long-term career growth opportunities for Filipino software developers. By providing stable, full-time positions, engineers gain hands-on experience with international product development, enhancing their technical and leadership skills.

“This model provides far more job security and a sense of purpose than short-term arrangements,” Pegarido emphasized.