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MANILA - (UPDATED 3:05 p.m.) Eight out of 18 cities playing host to call centers and other business process outsourcing companies are vulnerable to climate-induced disasters, according to a study by the Insitute of Development and Econometric Analysis.
Commissioned by Bayan Telecommunications Inc, the study identified the 8 vulnerable cities as Metro Manila, Dagupan, Naga, Angeles, Cavite, Santa Rosa, Lipa and Legazpi.
Metro Manila is the top Philippine host for BPO companies, while Cavite, Santa Rosa and Lipa are among the top 10 next-wave cities identified earlier by the Business Processing Association of the Philippines.
Seven cities - Baguio, Subic, Malolos, Bacolod, Dumaguete, Cebu and Davao - have moderate risk of climate-induced disaster, while Iloilo, Cagayan de Oro and General Santos are considered less susceptible to such disasters.
Davao, Bacolod, Iloilo, Malolos, Baguio, Dumaguete and Cagayan de Oro also belong to the BPAP's top 10 next-wave host-cities.
"Flooding is a very common occurence in the country, especially in Metro Manila and other metropolitan areas due to congestion in urban sprawls, solid waste problems and blockage of natural and artificial waterways," the IDEA study said.
In August, torrential monsoon rains caused massive flooding across the National Capital Region, Bulacan, Pampanga, Rizal and Laguna.
The IDEA study also ranked BPO host-cities in terms of their vulnerability to geophysical disasters such as earthquakes, volcanic eruptions and landslides.
Six out of 18 cities have high to very high risk, three have moderate risk and the remainder faces very low to low risk.
The study identified the cities of Dagupan, Subic, Angeles, Davao, General Santos and Baguio as highly vunerable to geophysical disasters. Lipa, Legazpi and Cagayan de Oro were identified as moderately prone to such disasters.
The study also showed that 77.1 percent of the surveyed companies consider natural disasters such as typhoons, flooding and earthquakes as potential sources of disruption to operations.
Other sources of disruptions are power failure, 37.7 percent; IT failure, 33.9 percent; fire, 23.5 percent; equipment failure, 17.2 percent; economic shocks, 6.8 percent; theft, 5.5 percent; health problems, 4.2 percent; and political instability, 1.6 percet.
"The Philippines is no stranger to a wide range of disaster events. Apart from loss of lives and property, disruptive events can result in significant direct and indirect financial losses for business organizations," Raul V. Fabella, chairman of IDEA said.
Fabella said the tendency to underinvest in protection measures and to deal with disasters as and when they happen amplify vulnerability.
The study further showed that only 35.5 percent of firms surveyed have yet to develop business continuity plans, while 44 percent have yet to put in place disaster recovery. Only 32.4 percent of the firms consider themselves "very comfortable" in the adequacy of preparations for disruptions.
Chito Franco, vice president of Bayan, said the study aims to alert businesses about the need to expand and refine analysis on risk assessment and disaster recovery.
"We want to encourage business organizations to adopt a proactive stance and invest in data recovery infrastructure now, as investing after a disaster already struck would be more costly for them," Franco said.
Using stratified random sampling, the 2012 study surveyed organizations in the National Capital Region representing education, finance, ICT, logistics, manufacturing, offshoring and outsourcing and trade industries.
The samples were drawn from the 2011 Security and Exchange Commission's Top 25,000 corprations.
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