Philippine Location Trends By CBRE GCS, Manila September 16, 2009

CB Richard Ellis Labor Analytics Group| Page 2 A Snapshot – Philippine Economy  The slowdown in GDP reflected primarily the negative contributions from exports and gross capital formation and the significantly lower personal consumption expenditures (PCE) growth. GDP Growth Rate Data Source: National Statistical Coordination Board

CB Richard Ellis Labor Analytics Group| Page 3 A Snapshot – Philippine Economy  The continued downtrend in headline inflation was due mainly to lower food inflation from favorable supply conditions, particularly the sustained growth in agriculture, and lower global food prices. In addition, inflation in 2008 was triggered by the rise in fuel prices. Inflation Rate Data Source: National Statistics Office

CB Richard Ellis Labor Analytics Group| Page 4 Key BPO Locations in the Philippines First Tier Cities Second & Third Tier Cities Metro Manila* Cebu Bacolod Baguio Iloilo Davao Urdaneta Batangas, Laguna & Cavite Legazpi * Metro Manila Cities include Makati, Pasig, Taguig, Muntinlupa, Quezon, Mandaluyong,& Pasay Dumaguete Pampanga Cagayan de Oro

CB Richard Ellis Labor Analytics Group| Page 5 Key BPO Locations in Philippines  Cities in Metro Manila, Cebu City and Baguio City, account for the majority of the BPO market. The BPO industry is made up mostly of contact centres and back office work. There is also increasing demand for Software, Engineering, Transcription and Animation.  Batangas City, Urdaneta City and Legazpi City are just some of the cities that make up the list as next BPO destinations due to considerably large talent available (nearly all can speak and understand conversational English. Almost all college and some high school graduates are very articulate in the English language). Another factor that makes these cities the right next destination is low cost for human resources, utilities, and real estate rentals.

CB Richard Ellis Labor Analytics Group| Page 6 Philippine’s BPO Market  The Philippines is now one of the top destinations for BPO services in the world, with a 15% market share.  The BPO industry earned a total of USD6.1 Billion in revenue the previous year. Competitive Advantages Challenges  Abundance and quality of talent and Filipinos’ strength in the English language  Cost competitiveness with Western and some Asian countries.  Filipinos have a strong positive view of the BPO industry  Philippines has various incentives in place to attract investors  Philippine government has given support and focus on development of the industry  Competitive search for qualified labor as some of the cities are attracting a lot of locators already  Some of the second and third tier cities will have lower talent pool with quicker saturation point Development of Philippines’ BPO Market

CB Richard Ellis Labor Analytics Group| Page 7 Philippine’s BPO Market  The BPO industry has become a crucial component of the Philippine economy covering a wide field of specialized markets including transcription, animation, publishing, software development, etc.  20 cities have been identified as the Philippine’s key BPO hubs. The 20 Designated Cites: First Tier Cities Second /Third Tier Cities  Makati  Pasig  Taguig  Quezon  Muntinlupa  Mandaluyong  Pasay  Cebu  Baguio  Bacolod  Urdaneta  Batangas  Legazpi  Cavite  Laguna  Pampanga  Dumaguete  Davao  Iloilo  Cagayan de Oro

CB Richard Ellis Labor Analytics Group| Page 8 Talent Supply for Philippines’s BPO Industry Source : Commission on Higher Education Supply of Educated Talent  Talent supply of university graduates is promising – more than 400,000 students graduate yearly. This has been the average for the past three years and continues to increase.  BPO jobs are perceived as an attractive and stable longer-term career option.

CB Richard Ellis Labor Analytics Group| Page 9  Metro Manila is the capital of the Philippines, with close access to government offices  Good infrastructure  Developed business environment  Existing affordable, BPO-ready real estate  Availability of labor with highest concentration of universities/colleges  Rising costs in labor  Traffic issues STRENGTHS WEAKNESSES  Population: 11,553,427  Number of graduates: 112,121  Population Growth :1.99% (avg)  Unemployment Rate7.5%  Close to 300 higher education institutions (universities / colleges / vocational schools)  Major schools: University of the Philippines, Ateneo de Manila University, University of Sto. Tomas, De La Salle University  Multinational banks – Citibank, HSBC, Deutsche Bank, JP Morgan Chase, etc.  Telecoms companies – Oracle, Motorola, Samsung, Ericsson, etc  IT - IBM, HP, etc  Others – Nestle, Shell, Chevron, Procter & Gamble, Colgate Palmolive, etc COLLEGES & UNIVERSITIES MAJOR OCCUPIERS TIER I MARKET LABOR AVAILABILITY Metro Manila

CB Richard Ellis Labor Analytics Group| Page 10  Close proximity to Metro Manila (travel time takes about 1hour)  Well-developed infrastructure and transportation system (international airport)  Former US air-force base with strong cultural and educational influences  Social infrastructure and good standard of living  Clark Special Economic Zone in Pampanga is a PEZA- accredited park (with several business incentives)  High attrition due to its proximity to Metro Manila STRENGTHS WEAKNESSES  Population: 2,645,395  Number of graduates: 7,218  Number of graduates from neighboring provinces:5,611 (Nueva Ecija) 3,547 (Tarlac) 15,778 (Bulacan)  34 higher education institutions (universities./ colleagues / vocational schools)  Major schools include: University of the Philippines – Pampanga, Philippine Women’s University and Angeles University Foundation  Texas Instrument, Samsung, FedEx, Global Gateway Logistics COLLEGES & UNIVERSITIES MAJOR OCCUPIERS TIER II MARKET LABOR AVAILABILITY Pampanga

Contact Information For more information, please contact: Joey Radovan Vice Chairman, CB Richard Ellis Philippines Inc. CB RICHARD ELLIS CBRE Global Corporate Services