Foreign Investors can improve the Philippine security industry

One area which is still restricted to Filipino ownership is security agencies. I would like to believe if foreign investors were allowed to enter the industry, better employment conditions in addition to better training and logistics management will be introduced to the industry. Let’s see first whether the constitutional amendments required are made to allow this to happen.

From Businessworld Philippines

September 11, 2014

Security agencies upbeat thanks to police lack

PHILIPPINE companies that run security agencies remain upbeat about business prospects, citing the increased demand for their services owing to the country’s lack of police personnel.

More and more companies are hiring private security companies for protection, an official of the Philippine Association of Detective and Protective Agency Operators (PADPAO) told BusinessWorld in a phone interview yesterday.

“Tumataas ang need for security guards, and of course, the investments for that… Ang driving factor nito is that there is not enough police to provide private businesses with the necessary protection so they engage in contracts with security agencies. Parang ito ang nagiging force multiplier nila (The need for security guards are rising and this is being driven by the lack of police personnel that can provide necessary protection for private businesses. As a result, businesses enter into contracts with security agencies to multiply their forces), “PADPAO Executive Vice-President Manuel P. Espejo told BusinessWorld in a phone interview on Thursday.

The country’s police force, the Philippine National Police (PNP), recognizes its personnel shortage which is manifested not only in Metro Manila but throughout the country as well.

Only 148,000 police officers serve the Philippines’ 100 million population, or a ratio of one officer for every 675 persons, almost 200 personnel short of the ideal 1:500.

As a result, even the smallest security company can earn more than a million pesos a month, depending on their margins and the kind of equipment provided to its customers, Mr. Espejo said.

“Sa akin lang eh, with around 750 security guards I’m shelling out P12 million every month. Ganun kataas, ano. Tapos kung 10% or 20% ’yung aking markup, or kung ’yung sa iba higher, depende sa equipment na mga pino-provide, ayun ang babayaran ng client namin (My company shells out P12 million every month for 750 security guards. My markup is 10% to 20% and it could go higher depending on the service and equipment we provide),” Mr. Espejo explained.

The Philippine security industry is worth around P4 billion every year, he said.

For her part, Teresita A. See, founding chairperson of anti-crime organization Movement for Restoration of Peace and Order, said that security agencies are capitalizing on the lack of police personnel.

“The police are engaged in many things right now — they help with traffic violations like apprehending colorum buses, enforcing the one-truck lane policy, manning checkpoints and so many others… Security agencies of course will capitalize on this and increase their business,” Ms. See told BusinessWorld in a phone interview.

“That’s why people are encouraged to get their own bodyguards instead of depending on the police if they can afford it. Even with politicians — tell me, how many bodyguards does [congressman] Pacquiao have? They rarely depend on the police for security at all,” she added.

Citing PADPAO figures, Mr. Espejo said there are currently 700,000 security guards in the country and 1,675 security agencies operating locally. Majority of these agencies, according to him, are operating in Metro Manila, the Southern Tagalog Region, and Cebu.

The PADPAO executive also said that salaries of security guards should be raised and that the national government should take initiative in correcting it in the next few years.

The PADPAO also serves as the self-regulatory and policing body of private security agencies in the country.

“We hope in the next three years, makaka-develop ang Department of Labor ng rates that would be commensurate to this industry. Ginagaya lang kasi sa janitorial [services] ang security guards. So mababa ang sweldo. But it’s not just the sweldo, it’s also the overhead expenses of the agencies. So ’pag affected ang overhead expenses affected din ang sweldo ng security agencies (We hope that the Department of Labor and Employment come up with rates that would be commensurate to this industry. Right now, salaries are just based on janitorial services. This is why salaries are low. But beyond that, it’s also the overhead expenses of agencies. If these expenses are affected so do the salaries of the security guards),” he said.

Article location : http://www.bworldonline.com/content.php?section=Nation&title=Security agencies upbeat thanks to police lack&id=94396

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