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Outsourcing News for December 2012 | MicroSourcing

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PH one of Fastest Growing Economies Amidst Global Financial Woes

Unlike other regions around the world, the Philippines was able to withstand and rise above the fiscal pandemic that crippled even the most advanced countries of today’s time. The country was even cited as one of the fastest growing economies in Asia.

Some of the government’s goals are designed around good governance with good economics, reinforced by debt fiscal management, a well-supported partnership between government and businesses, and transparent public spending.
Meanwhile, it was found that over three million Filipinos were helped by the local government’s conditional transfer program during the first three quarters of 2012, a part of its commitment to serve a larger number of the populous. Furthermore, the International Monetary Fund (IMF) has a similar outlook for the nation. This includes improved governance, innovation, better educational and social systems, and reforms aimed to improve business environment.
Christine Lagarde, IMF Managing Director, noted highly of the Aquino administration’s outstanding economic management.


Emerging outsourcing hubs identified as key growth propellers

The Global Data Processing and Outsourcing Services Market 2011-2015 report done by market intelligence firm TechNavio predicted that the segment will grow at a 5.2 percent CAGR from 2011-2015. The study was also able to identify emerging outsourcing hubs as key growth propellers.

Moreover, cloud technology was seen proliferating in the segment. However, global economic challenges still pose a threat to its growth.

The study was derived from a comprehensive research, as well as contributions from industry experts. It specifically covered regions such as the US, EMEA, and APAC. Furthermore, the future of the global data processing and outsourcing services market landscape is being observed as well.

Meanwhile, some of the key vendors identified in the market are Fujitsu Ltd., HP Co., IBM Corp., and Xerox Corp. Companies such as Computer Sciences Corp., Accenture plc, Convergys Corp., AON Corp., NCO Financial, Capgemini S.A., Genpact Ltd., TCS Ltd., Stream Global Services Inc., Wipro Ltd., WNS Ltd., Aegis, and Infosys Ltd were mentioned as well.



PH Commercial Real Estate Grew 18%

by: Sarah Joson

Wednesday, December 26, 2012 | Outsourcing News | Comments (0)

Philippine BPOs a Major Market Segment for Office Space

The Philippine commercial real estate segment grew 18 percent from the average demand of 360,000 square meters (sq.m) to 425,000sqm. during the months of January up to November this year. It is projected to reach 430,000sqm by the end of December according to global real estate services firm Jones Lang LaSalle (JLLL).

Sheila Lobien, Director for Project Leasing at JLLL, said apart from local business process outsourcing (BPO) companies, multinational companies (MNCs) and local firms are also considered as major market segments for office spaces in 2012. In fact, these segments account for 25 percent of the current demand, which translates to 100,000sqm.

Meanwhile, the national director for markets, Lizette Tan, said BPOs can still customize architectural design according to the requirements of their respective infrastructure. Buildings will also be strategically located to be near residential areas.


Philippine Peso One of Asia's Best Performing Currency

Due to strong remittance inflows and the growing number of foreign investors to the country, an investment bank predicted that the Philippine Peso will hit the P37 to a dollar mark in the coming year.

According to a report from the Bank of America-Merrill Lynch (BofA-ML), they are keeping an eye on Bangko Sentral ng Pilipinas’ aggressive actions as it is striving to counter the rapid appreciation of the peso against the dollar, propelled by the surge of foreign investments.

However, the rise of the peso could affect the growth of the local business process outsourcing industry, remittances from overseas Filipino workers, and value of dollar exports.

Some of the BSP’s efforts include purchasing dollars to improve the strength and demand of foreign exchange. BofA-ML noted that it will not work as the BSP is suffering losses, caused by costly production of local currency and valuation losses from intervention actions. Moreover, a P68.36 billion deficit is faced by BSP, which is two times more than last year.

BofA-ML noted that the local economy could experience a growth of 5.5 percent as the strong peso will be able to ease inflationary pressures in 2013, as well as provide leeway for lower lending interest rates from banks.

The country’s gross domestic product (GDP) was predicted to increase to 5.7 percent. It was able to reach 6.5 percent during the months of January up to September.



UK Government Says No Protectionism

by: Sarah Joson

Friday, December 14, 2012 | Outsourcing News | Comments (0)

During an interview with BusinessMirror, Hugo Swire, a visiting Minister of State at the Foreign and Commonwealth Office, said the British government has no plans of coming up with a bill similar to the Bring Jobs Home Act proposed before the United States Congress. He noted that even if the British economy is in crisis, they will not prioritize protectionist methods.

When asked if they are thinking of creating a similar bill which is supported by US President Barack Obama, he said they believe that such acts are short-term solutions with long-term consequences. He noted that it is common for some politicians to respond to economic depression by creating such barriers.

Moreover, Swire stated that protectionist measures could only lead to more problems because each country’s strength relies on its ability to be globally competitive and have a globalized economy to attract more investors, and barriers will only weaken local industries.

Bring Jobs Home bill shook the BPO industry

The Bring Jobs Home bill was sponsored by reelectionist Democrat Sen. Debbie Stabenow of Michigan, and shook the business process outsourcing (BPO) industry, including the Philippines’, as they lobbied for approval before the US Congress. The bill was designed to address the economic crisis in the US. It is aimed to modify tax provisions and eliminates government grants for businesses that outsource offshore.

Swire added that they are opposing protectionist measures and reiterated that the UK is open to investments and is a part of the global trade.



IT Outsourcing Deals Drop for Q3

by: Sarah Joson

Thursday, December 13, 2012 | Outsourcing News | Comments (0)

Lowest number of deals in the IT outsourcing market

A study done by analyst firm Ovum showed that the global IT outsourcing market’s total contract value (TCV) has fallen by 75 percent in this year’s third quarter. It was also indicated that the figures posted are the lowest level for the segment in nine years.

Ovum noted that from last year’s third quarter, the TCV of IT services contracts fell 33 percent this year, same period, with 18.9 billion (£11.7 billion).

Moreover, the third quarter of 2012 showed the lowest number of deals with 332, from 438 contracts posted during the same period last year. However, the lowest is still 324 contracts tracked during 2007’s Q4.

However, Ed Thomas, an analyst at Ovum, said the signs of recovery for the IT services market during the second quarter of 2012 were not seen during the third quarter of 2012. The industry would have to work twice as hard on improving the TCV and volume of deals if it wants to at least match last year’s statistics.

Europe was identified to have dominated the contracts belonging to the private segment but activity dropped for the IT providers’ market which is North America.

For the global public sector, Q3 of 2012 posted a TCV of $10.6 billion (£6.6 billion), a decline of 43 percent. The volume of deals also fell 22 percent to 195 for the same period last year.


BPO Office Congestion in the Philippines

Nearly 40 locations outside Metro Manila(National Capital Region or NCR) and other major cities are identified as feasible hubs for business process outsourcing (BPO) operations, according to the Next Wave Cities (NWC) campaign launched by the local BPO sector and government.

One of the key drivers for the industry to go beyond NCR is the mounting expenses caused by office space congestion and mass recruitment.

Business Processing Association of the Philippines (BPAP) Executive Director Gillia Virata said the locations offer more than what the more popular and developed information technology (IT)-BPO hubs like Metro Manila, Metro Cebu, and Metro Clark already have.

Furthermore, she said an NWC scorecard created by BPAP and the Department of Science and Technology-Information and Communications Technology Office (DOST-ICTO) helped single out the suitable regions. They check each location annually, update data accordingly, and release the list of the 10 best cities and municipalities.

Last year, Davao, Santa Rosa in Laguna, Bacolod City in Negros Occidental, Iloilo, Metro Cavite (Bacoor, Imus and Dasmariñas), Lipa City in Batangas, Cagayan de Oro City, Misamis Oriental, Malolos in Bulacan, Baguio, and Dumaguete City in Negros Oriental were included in the NWC list.

Other regions that IT-BPO companies can consider are Iligan City, Zamboanga, General Santos City, Leyte, Laoag City, Bohol, Legazpi City, and other provinces in Central Luzon and Southern Luzon, some of which already house small BPO firms.

Virata reiterated that 75 percent or more than 350,000 graduates hail from regions outside Metro Manila. Since talent is the main driver of the industry, they were able to asses that these locations can have a huge potential to help the industry grow and attract more foreign investments.


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