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									    Asia/Pacific Regional Seminar on Animation Culture and Industry for Promotion
                                 of Cultural Diversity
                                 (Tokyo, Japan, 16 - 18 July 2008)

                  Organised by Asia/Pacific Cultural Centre for UNESCO (ACCU)
                        The Association of the Japanese Animations (AJA)

                                  Country Report (Philippines)

                                                             RUDYARD CONTRERAS PESIMO
                                                                 ATENEO DE NAGA UNIVERSITY

                        The Current State of Cultural and Industrial
                     Government Policies on Animation in the Philippines


The Government of the Republic of the Philippines (GRP) has recognised the importance of the
country’s animation industry -- having achieved more than 25 years of global animation services,
specifically in being a preferred outsourcing partner of big international production outfits
worldwide. Philippine animation companies are subcontractors to major US, European, Japanese
and Australian animation companies. Thus, the GRP has strategically formed the Business
Processing Association of the Philippines (BPA/P), an alliance of the country’s top IT-BPO
industries, including animation, to further strengthen their status and galvanise their stature in the
world stage.

1. BPA/P represents the entire width and breadth of IT-enabled services in the Philippines. It
   represents all outsourcing and off-shoring IT and business process services, namely: BPO
   (Voice and Non-voice); IT services (Software Development, System Integration and
   Animation); Engineering/R&D services; and Allied services (Property Development, Systems
   Integration, Recruiting and Telecom).

2. BPA/P currently has 198 Regular Company Members and 5 partner Association members
   including the Animation Council of the Philippines (ACPI). In 2006 and 2007, 121 new
   members have signed up. Its target in 2008 is the addition of 60 new members.

3. On October 2007, BPA/P launched the Philippine Roadmap 2010 Report, a strategic plan for
   the Phil IT-BPO industry and employed a full-time management team responsible for leading
   key initiatives defined in the roadmap, which resulted in key partnerships with government,
   academia, vendors and international groups.

                                                              Asia/Pacific Cultural Centre for UNESCO (ACCU)
4. BPAP developed the Philippine IT-BPO “roadmap” to achieve a strong global #2 position in
   the world.To this end, Sec. Ray Anthony Roxas-Chua was appointed as the Philippine
   Government’s “Outsourcing Czar.”

5. Her Excellency President Gloria Macapagal-Arroyo announced the release of $10million
   worth of PGMA Scholarship grants for deserving students to be employed in BPO. The first
   release of these scholarship vouchers went to:

                                 Sector               Amount           # of

                       Call Centre                     25 M            5,000

                       Animation                        3M               300

                       Medical Transcription            3M               300

                       Software Development            4.5 M             150

6. The Philippine IT-BPO industry currently has close to US$5.0 billion in revenues. Philippines
   is now the third outsourcing destination in the world, 2nd outside of North America. This is a
   result of the main advantages that the Philippines offers to its global clientele: strong intrinsic
   skills, proficiency in the English language, strong cultural affinity to the U.S., large pool of
   talent, and competitive factor costs in labour, real estate, telecom and government incentives.

7. All sectors under the Philippine IT-BPO are growing at a tremendous rate. In 2007, the
   animation industry posted US$105M revenue.

                           SECTORS                    2007 REVENUES   PAST 3
                                                         ($000,000) YEARS AVE

          Contact Centre                                     3,600                    52

          Back Office (non-voice bpo)                          398                    46

          Transcription (non-voice bpo)                        197                    24

          Animation                                            105                    38

          Software                                             423                    35

                                                               Asia/Pacific Cultural Centre for UNESCO (ACCU)
         Engineering/Design Process                        152                    55

         TOTAL Philippine IT-BPO (export only)             4,875                  50

8. The Philippine identifies its high talent value proposition of a large pool of English-speaking
   professionals. Annually, over 400,000 college-degree graduates are produced out of the 90
   million population. The labour force stands at 36 million with a literacy rate of 92.6%.

                           Pop     Labour Force     Unemployment             Literacy

          World          6,602M       3,400M             6.3%                 82.0%

          India          1,130M        509M              7.8%                 61.0%

          China          1,322M        798M              4.2%*               90.9%*

          Brazil          190M          96M              9.6%                 88.6%

          Philippines      90M          36M              7.9%                 92.6%

9. The Philippines is viewed as a favourable location for BPO-IT services by top international IT

   • Frost & Sullivan, August 2007:
      “Philippines among top 10 shared services and outsourcing locations in the world.”

   • IMF, March 2007:
       “The Philippines has established a strong presence in voice-based BPO sectors such as
   call      centres, and there are also signs of growth potential in other offshore services,
   such as   medical transcription and animation.”

   • Gartner, Dec 2007:
      “The Philippines has become a destination for call centre and back-office finance and
      accounting operations; rates highly in cost, labour quality and language/cultural

   • Nomura Securities, November 2007:
       “We think that the Philippines has grown into the No. 2 outsourcing base after India in
   call      centre–based BPO fields.”

   • Everest Consulting, April 2008:
      “The Philippines is now the third largest destination geography for BPO services.”
                                                           Asia/Pacific Cultural Centre for UNESCO (ACCU)
   • Frontier Strategy Group, September 2007:
      “The Philippines is among seven key markets that are “above the rest” and are the “most
      critical to achieving corporate growth and outperforming the competition in 2008 and

   • National Outsourcing Association (UK), October 2007:
      “Philippines is awarded the Off-shoring Destination for 2007.”

10. On the legislative agenda, BPA/P is drafting a Position on arbitrary proclamation of Holidays.
    BPA/P has also started looking into Gainsharing Incentives bills and have just submitted a
    Position to both Houses. BPA/P is also drafting a position on wage increase issue. QT
    assisting BPA/P to consolidate all proposed amendments to Labour Code. Further, BPA/P has
    submitted its position on the Data Privacy and on Intellectual Property Rights.

1. Recently, the Animation Council of the Philippines conducted its Strategic Planning 2008 at
Casa San Pablo, in San Pablo City, Philippines from July 12-13, 2008.

2. The council endeavoured to revisit, revise and reaffirm the proceedings of StratPlan2005, and
to assess, appraise and appreciate the performance of the industry in order to better position the
country in the increasingly competitive nature of the global market.

3. After significant deliberation and meaningful discussions, ACPI has crafted a brand new
Vision-Mission statement, to wit:

       A. Vision: ACPI shall be the Centre of Excellence for Animation in Asia.

       B. Mission: To be the prime mover in building the capability of the Philippines as the:
              1. Creator of world-class original content;
              2. Preferred provider of animation services in the Global market
              3. Hub of animation education in the region.

4. ACPI has updated its three main objectives, namely:

       A. To facilitate the global promotion of the Philippine animation industry
              1. By evolving a Filipino brand of animation
              2. By enhancing the image of Philippine Animation

                                                           Asia/Pacific Cultural Centre for UNESCO (ACCU)
      B. To facilitate proactive development of local talents to be able to meet the global
            1. By increasing the number of animation artists and business professionals each
               year by at least 25%
            2. By spearheading industry-based animation courses through partnerships with
               various stakeholders

      C. To encourage the development and production of original content
             1. By providing assistance in looking for funding, and distribution channels
             2. By providing avenues for promotion such as festivals and publications
             3. By giving recognition to outstanding productions
             4. By lobbying for legislations that will support productions

                                                          Asia/Pacific Cultural Centre for UNESCO (ACCU)

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