This post is only about a couple of teasers. The real deal will follow as soon as I have more details to blog about.

A new-media company is in the process of being registered with the SEC (I won’t mention the company name yet… in case it doesn’t get approved!). “New media” is a term that describes entities whose main focus is on the activities of Internet-based marketing and advertising. This new outfit is comprised of 5 bloggers, including yours truly. The reason why we’re putting up this company is the emergence of local demand for new-media services: Web marketing, promotions via blog sites, Internet advertising, SEO.

It’s not just about making Web sites anymore, and companies are starting to see this. They have come to realize that, even with a Web site, there is a missing layer between their sites and the people that they want to target as audience. That layer is what we’re here to provide.

Next up is related to media: a Web-based ‘TV show’ for technology-related content. It’s more aptly called a Webcast, and it’s in production now. The show will be called PinoyTech TV. The Webcast will feature industry news, gadget reviews, personality profiles, IT investment destinations, and employment opportunities. Watch out for it!

(The PinoyTech TV outfit, by the way, is looking for enthusiastic videographers and writers who are attuned to the inner workings of the national IT industry.)

Another online service that’s being developed is Davao Tech Jobs (www.davaotechjobs.com). It’s already live, but is still in beta. Applicants can already send in their resumes, which will then be matched with job openings. Companies can post job openings by sending them via an online form — this service is currently free of charge.

More later!

I have yet to implement the PayPal shopping cart and payment gateway on one of my sites, but after reading through the documentation, I’m confident that PayPal can offer Filipinos a myriad opportunities for doing business online. What’s more, the basic system is practically free — except for the minimal transaction charges, there aren’t any setup fees or recurring monthly charges. Credit card purchases made on your site, for example, carry a minimum 2.5% charge, plus a US$0.30 fee per transaction.

I wonder what precipitated this. What has recently transpired that prompted PayPal to finally allow Filipinos to accept incoming online fund transfers? Has our overall credit rating increased? Have our banking and government financial policies improved to the point of being on a par with international standards? Whatever the reason, the results will certainly be hopeful for the Philippines. For one, PayPal’s move could signal to the world that the Philippines has now come of age, in terms of our standing in the global e-commerce arena.

Janette Toral, acclaimed as the mother of e-commerce in the Philippines, has raised this concern in light of this PayPal development: ‘What will happen to existing Philippine-based payment gateway facilities?‘

Well, I anticipate that such services will necessarily become competitive. Filipino e-commerce providers, such as YES Payments and Your One Stop Shopping Network, will have to shape up or ship out. Presently, these companies offer similar payment systems, but at rather prohibitive rates, on top of stringent restrictions. I expect that much streamlining and repackaging will come into effect as a result of the PayPal initiative.

Funds received via PayPal can be withdrawn to a debit card, such as UnionBank’s EON card. If you’re an EON account holder, it will be very easy for you to start setting up a PayPal account. See www.unionbankph.com for more details.

Recently, PhilEXIM executives held an orientation seminar in Davao City for the benefit of SMEs, particularly small- and medium-sized I.T. enterprises (SMITEs). As does the DTI, PhilEXIM now has a mandate to focus on the development of the country’s I.T. industry. Before anything else, let me just say that the seminar was more than mere talk. The PhilEXIM executives, led by none other than one of the vice-presidents, were all set to start working with Davao companies.

PhilEXIM is the government’s answer to the years-long clamor by SMEs for affordable and accessible funding windows. Commercial loans from the country’s banks are simply prohibitive and are thus impractical for, say, startup I.T. companies in Davao. Stringent collateral requirements and high interest rates are two of the almost insurmountable challenges facing SMITEs to avail of bank loans. But with PhilEXIM in the picture, SMITEs now have a more feasible alternative for their financing needs.

PhilEXIM concentrates its activities on the export sector exclusively. Direct exporters, as well as indirect exporters — those who act as suppliers of raw materials and services to direct exporters — are able to avail of PhilEXIM’s loan products. I.T. companies, especially those who are in the thick of business process outsourcing and software development, are considered eligible.

To give you a quick idea of how big a business opportunity this is for SMITEs, PhilEXIM’s current interest rates are between 8.5 to 9.5% per annum. The following text is taken from the seminar presentation:

Under the (Short-Term Direct Lending) program, PhilEXIM grants short-term loans, purchases export bills and extends any form of receivable financing to small- and medium-sized exporters to finance their preshipment working capital and postshipment financing requirements.

Let’s drill further down into this Short-Term Program. It is comprised of two types: a Revolving Line of credit, and a Transaction Loan. The former involves a one-year (renewable) credit line with a maximum limit of Php 20 million. Each disbursement must be supported by a promissory note, and will have a maximum tenor of 180 days.

The Transaction Loan type, which also carries the same loan upper limit, might not be suitable for I.T. companies. It is more attuned to the financing needs of exporters of tangible goods.

A Medium- and Long-Term Direct Lending program exists as well. This carries a maximum loan size of Php 40 million. Here’s another quote:

This program provides medium- and long-term loans to small- and medium-sized exporters to finance acquisition of fixed assets, expansion, modernization of production techniques, improvement of production capacity and permanent working capital. Purchase of land / project site is allowed provided only 50% of the loan is used for such purpose.

PhilEXIM is not a bank, but is affiliated with LandBank and the Development Bank of the Philippines. There are also also more than a dozen commercial banks that participate in its programs.

Aside from low interest rates, PhilEXIM has been directed by the government that loan applications must not be denied solely for lack of collateral. It is not my aim here to expound on PhilEXIM loan application requirements, but suffice it to say for now that SMEs will find them very accessible and feasible.

While we may be disappointed — to say the least — in the perceived overall performance of this administration, I daresay it is fulfilling some of its mandate through PhilEXIM. I believe that the activities of PhilEXIM will spell the success of our SME sector. With that, ultimately, we will see a tremendous boost to the national economy.

Unfortunately, PhilEXIM does not yet have a presence in Davao City. Its Visayas and Mindanao operations are currently being managed out of Cebu. But with e-mail and mobile phones, this shouldn’t really be such a big hurdle. The Cebu-based officer-in-charge, Mr. Alex Arabis, has indicated that any request for them to come down for business transactions will be positively received. And with the assistance of DTI-Region 11, access to PhilEXIM will be a cinch.

Furthermore, PhilEXIM is looking to accredit loan-granting conduits in Davao (and other areas). Such conduit could be a non-profit organization. I will discuss this further in another installment. In the meantime, I will welcome any inquiries from I.T. companies or industry associations regarding PhilEXIM’s loan products. Feel free to contact me via this contact form.

Do you have a bankable I.T. business idea? Do you have an e-commerce vision that could potentially become a sustainable business? Do you want to acquire the necessary skills to formulate a sound business plan?

The P.E.S.O. Davao Challenge, launched last 20 June 2007 at the Ateneo de Davao University, is the perfect venue for enterprising young Dabawenyos who’d like the chance to see their ideas transformed into real businesses. The Philippine Emerging Startups Open is a nationwide business plan competition that was initiated by Filipino graduate students at the Massachusetts Institute of Technology (MIT). This “brain gain” initiative was inspired by the MIT US$100,000 Entrepreneurship Competition, which is 17 years running. This prestigious contest has facilitated the creation of more than 60 I.T. companies to date, with an aggregate value of US$10.5+ billion.

The PESO Challenge is a unique undertaking in that it offers participants a mentoring program, as well as progress monitoring, so that they will be equipped with the proper tools for creating a world-class feasibility study. Furthermore, victors of the competition are provided access to funding windows in order to convert their winning ideas into established companies.

In Davao, the Challenge is a project of the Davao City Chamber of Commerce & Industry (DCCCII), and supported by PESO, PAHRDF, PSITE, and CDITE. It is an offshoot of the DCCCII-PAHRDF teachers training in technopreneurship late last year. Essentially, the professors who underwent this training program will be the mentors for this business plan competition.

The Challenge aims to connect academe, industry and the investment sector, thereby encouraging technology-based entrepreneurship. With this holistic synergy in place, it is envisioned that a viable atmosphere of business-mindedness among college graduates will be espoused here in the Philippine South.

The following are the qualifications for business plan entries:

• Technology application in product design or innovation in value proposition; business concept meets criteria of tech/business innovation matrix
• Addresses concerns in:
  • IT/Telecom
  • Agriculture and Aquaculture
  • Life and Biosciences
  • Energy and Environment
  • Services
  • Process technology and Engineering
• Technology idea owner must be identified and be a member of the team; nature of intellectual property rights must be clearly stated

According to PESO, teams must be comprised of 3 to 5 members, with at least one member in undergraduate (or higher) level. The others may be faculty or professionals. As mentioned above, teams will be guided by mentors.

Team members may also be part of one other team at entry level. However, at the finals (after eliminations), participants must exclusively belong to only one team.

Currently, the Challenge is being promoted to the various colleges and universities. Submission deadline for application (in other words, the concept paper) is set on 20 August, which will be followed by the “participant enrichment series” (the mentoring phase). Submission of the business plans is on 23 October. Other inclusive dates will be announced later.

Aside from receiving awards and recognition for the PESO Davao Challenge, winners here will also be automatically entered in the nationwide PESO Challenge in 2008.

For more information, please contact the Davao Chamber, or send an e-mail to pesodavao[at]gmail.com.

A couple of years ago, through the initiative of the Davao City Chamber of Commerce & Industry Inc (DCCCII), an extensive educational program was instituted for the development of entrepreneurship training at colleges in the Davao Region. This was in partnership with the Philippines-Australia Human Resource Development Facility (PAHRDF), and funded by the Australian Agency for International Development (AusAID). This bore fruit when 12 colleges and universities were introduced to curriculum development coaching for an entrepreneurship program in information technology courses. The coaching ran from December 2006 to January 2007.

According to Cornelia Victolero, I.T. consultant of Davao Doctors College, the output is an elective course (3 units) which is targeted at students enrolled in Computer Science and other related majors. Each college may have different guidelines, but I think it would be a beneficial idea to offer this elective to students of any course.

Most participating schools will start offering this elective on technopreneurship this school year, although a few have reportedly begun offering it since last semester. In Davao City, the participating colleges / universities are: Ateneo de Davao University, Brokenshire College, Davao Doctors College, Holy Child Academy, Interface College, John Paul II College, Jose Maria College, University of the Immaculate Concepcion, University of Mindanao, and University of Southeastern Philippines.

This program is highly commendable, and is one more reason why our Davao Chamber is recognized nationwide as a model organization, and a catalyst for positive change. It should be noteworthy that the DCCCII is the only private organization that is considered a partner in development by the Australian government. What is even gratifying is that, the Davao Chamber will not sit on its laurels: the technopreneurship elective subject is just the tip of the iceberg. (One thing, though: I just hope they’ll soon decide to update their website more often….)

The long-term goal is to develop a full four-year degree course on entrepreneurship in the business of information technology. In order to achieve this worthy objective, the Davao Chamber and PAHRDF are conducting further training here and in Australia. For instance, there’s Mark Maglana, who is in Brisbane Canberra taking up a master’s program in Management, specializing in Technology, Innovation and Commercialization. This is under a scholarship grant from the PAHRDF. After he graduates, Maglana is contract-bound to return to Davao and impart the knowledge he will have gained. As well, he is of the same mind to close the gap between industry and academe. Other professionals-turned-students are — or will be — under training in Australia for similar reasons.

The ultimate purpose of developing this technopreneurship academic program is to develop entrepreneurial skills in today’s youth, in order to engender business-mindedness among technology-inclined graduates. It answers the question, ‘Why work for someone when you can build your own I.T. business?’

In line with this, a nationwide Business Plan Competition will be launched in Davao on 20 June 2007, during the next Techno Kapehan. Techno Kapehan #6 is set to be held at the Ateneo college campus, from 2:00 PM. This competition, which hopes to encourage students to produce bankable business ideas, is only this year being opened to Davao entrants. The Davao Chamber is the local coordinator. More details on this in forthcoming articles.

Finally, the MICT Congress franchise owner and this year’s host organization have agreed on the broad strokes of the event’s planning and management. The Mindanao Business Council (MBC) and the Davao City Chamber of Commerce & Industry have set the date on 26 to 28 October 2007. And, the inclusion and participation of the Davao ICT Inc. has also been approved in principle.

While no official statement has been released yet, apparently the ongoing negotiations include an agreement that the three organizations will split the event’s profits three ways. Currently, the Davao Chamber and ICT Davao are threshing out the particulars of the memorandum of agreement.

ICT Davao, being at the center of the whole affair, is expected to generate the MICT Congress’ main content. The Chamber, as the event’s host, is the overall organizer. It is responsible for the event’s groundhandling, among other things. The MBC, for its part, is committing to ensure wide participation from its member organizations across Mindanao.

Recently, ICT Davao got a boost from no less than Commissioner Monchito Ibrahim of the Commission on ICT. The CICT is the national government’s lead agency in the promotion and advancement of the Philippine I.T. industry. Ibrahim is tasked to further the progress of this administration’s ICT master plan, the Philippine CyberServices Corridor.

The CyberServices Corridor is the Filipinos’ answer to Malaysia’s CyberJaya and India’s Multimedia Highway. This planned Corridor will pave the way for I.T. industrial development from Baguio City all the way to Davao City.

To help this along, Commissioner Ibrahim was in town last Friday, 11 May, to meet with ICT Davao representatives. The commissioner’s main purpose in visiting Davao was to touch base with the local industry players and gather vital input for the constantly evolving CyberServices Corridor master plan. Ibrahim also indicated that he is keen on organizing a national aggrupation of industry associations during his term in the CICT.

In 2004, I participated in the Fly High Philippine Software 2010 program, which was held in Tagaytay Highlands. Ibrahim was also there, then representing a private enterprise. It was very reassuring to hear the commissioner talk at length about the importance of the software sector last Friday. I’m glad that the Tagaytag convention initiative, which was spearheaded by the CICT and the Philippine Software Industry Association, is still exerting influence on the government’s view of the I.T. industry.

Of late I’d been fearing that the national government was focusing too much on I.T.-enabled services (e.g., call centers), rather than on the mainstream sector. Software development is at the heart of the whole industry. In other parts of the globe, it is the sector that contributed most to the advancement of I.T. hubs such as Silicon Valley and Bangalore. The business of software development is the one that adds the highest value to the economy.

Davao’s lackluster showing in the number of local software development houses is a challenge. While the city has only a handful tax-paying software developers at present, we do have a healthy number of freelancers and independent developers operating in the metropolis. The challenge is to encourage these “non-aligned” individuals into becoming active contributors to the local economy.

The Department of Trade & Indstry – Region 11 is in fact very supportive of this. Unbeknownst to many, the DTI actually has a funding window available to startup I.T. companies. Additionally, there are business support services already in place, such as the DTI’s NERBAC and the Davao Chamber’s SME Center.

Now, if only the two upcoming I.T. parks — Damosa Land’s and SM City’s — would embark on an I.T. incubation program, then the circle of support would be complete. Some of my colleagues and I hold the belief that an I.T. incubation facility is what transforms a real estate development project into an I.T. economic zone. The most basic premise is that, homegrown high-tech businesses are the ones that truly participate in nation-building.

Foreign investments in large-scale contact centers, for example, are all well and good, of course. It is important for employment and for the initial inflow of capital, I suppose. But I have a sinking feeling that, ultimately, they’re just good for bolstering the image of grandstanding politicos….

Therefore, Dabawenyo entrepreneurship in I.T. business is highly recommended. For more discussions and input on this, I also recommend this blog: Studies in Technopreneurship. It is being authored by Mark Maglana, who is on an AusAID scholarship in Australia for a masters degree in entrepreneurship.

Personally, I have benefitted from being a member. I’ve been able to get a couple of huge projects through club get-togethers and introductions.

It was rather disappointing, though, that there were only a handful of us during this eyeball. Still, I believe it was productive in the sense that those of us who were present were able to acquire useful information.

Aileen Apolo of Google Philippines did a presentation on Google AdWords. For those of you who are not yet familiar with Google’s advertising products, AdWords is the service that accepts your ad placements and allows them to be propagated on the Web. Simply put, it’s targeted towards companies and businesses that are looking into marketing their products/services via the Internet. AdSense, on the other hand, is the service that allows website owners to monetize their websites by publishing the ads.

Aileen also indicated that Google is looking at investing into tech companies in the Philippines, including Davao. She said that it won’t have to be an acquisition (or buy-out), but a joint-venture sort of arrangement. It doesn’t even have to be a very large requirement — something as small as US$5,000 might even be possible, she said. Google, in its drive to help propagate technology, is interested in software applications that involve search, imaging, SNS or community-building services, and mobile applications.

If you’re interested to pursue this or inquire into this, please e-mail me: robillo[at]gmail[.]com.

The sad fact of our current situation is that, most fresh graduates automatically think about employment, and never consider putting up their own enterprise. They instinctively polish up their résumés, instead of endeavoring to develop a business plan. Owning your own business just isn’t built-in in the Davaoeño psyche. I suppose it’s in the upbringing. But the economic environment also has something to do with this. I’m certain that there are plenty of young idealists out there who have sound business ideas. It’s just that young people aren’t very bankable, it seems.

But back to DTI-XI — that government agency that I truly respect — they actually have a funding window available to entrepreneurs. I’ll blog about this more in another post.

Another very hopeful development is this new program, the Technopreneurship Course, sponsored by the Australian government. This is an initiative by the Davao City Chamber of Commerce & Industry, in partnership with the Philippines-Australia Human Resource Development Facility, or PAHRDF. From what I’ve gleaned from press releases, this will be a 6-unit course that will be offered in Davao universities. The objective of this course is to enable students to think entrepreneurially (am I coining a word here?) and equip them with the tools for when they do decide to plunge into the world of IT business.

I guess this is one way to stave off our city’s perennial brain drain problem. One might argue that the situation is a chicken-and-egg problem: Which should come first, the entrepreneurs or the viable business climate? But I say, it is the businessmen themselves who should create this viability. Particularly technopreneurs, or enterprising businessmen (and women, of course!) who focus on the IT industry. Why? Because information technology is the country’s sunshine industry. It is the great equalizer, the arena where all players with enough initiative can consider themselves at par with everyone else. Or even better!

The business district is dotted with internet cafes, the best of which are equipped with broadband access. And, more and more city hotels and coffee shops are becoming WiFi hotspots, enabling businessmen the luxury of connecting to their companies via high-speed Internet access. Computer shops abound and are stocked with the latest in digital hardware. Many schools now offer courses in computer science and information technology, what with the demand in the burgeoning call center and medical transcription fields for graduates with high computer literacy.

Looking at it this way, Davao does appear to be a modern city now. However, we’re only considering a few of the city’s 244,000 hectares. Only less than a quarter of the city’s more than 1.2 million people are in fact computer literate.

While it can be truthfully said that a handful of industry players are already capable of offering quality IT solutions to the world, the majority of the population, on the other hand, is blissfully unaware of even the mere usage of personal computers. Even as the third largest city in the Philippines in terms of development and population, Davao is far from being an urban center like Cebu. The city is still very much an agricultural center, but this should not be an excuse for remaining uninformed in the field of information technology.

Ever since the boom of IT and the resultant culture of technology, there has been the so-called "digital divide". It is the perceived gap between those who are immersed in the wonders of computers and high-tech gadgets, and those who merely wonder about these things. In other words, the digital divide is simply another rehashed concept of the disparity between rich and poor. But is it really that simple? Obviously, you know I’m going to say ‘No.’

In an article published by The Economist, the author wrote, "…the digital divide is not a problem in itself, but a symptom of deeper, more important divides: of income, development and literacy." This idea of a digital divide does not even occur in the minds of those on the other side, because they are concerned with more fundamental pursuits, such as the next meal. Still and all, technology–while being at the root of the digital-divide problem–is itself the key to bridging this gap.

The beauty of technology is that, it can be custom-fit to suit one’s needs according to one’s budget. Take, for example, mobile phones. I remember when, back in college, it used to be the exclusive use of the upper echelons of society. In less than a decade, this utility has become so mass-based that I daresay the cellular telecommunications industry is now a major contributor to the country’s economy.

The conventional view of high technology as the domain of the rich or of the well-educated is outmoded. More and more people, from all walks of life, are now realizing that technology can work for them. So does this mean that the proverbial digital divide has now been spanned? Hardly. (To be continued.)