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Outsourcing News for November 2014 | MicroSourcing

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PH Economy to See Downgrades due to Slow Q3

by: Sarah Joson

Friday, November 28, 2014 | Outsourcing News | Comments (0)

Lower Forecasts Anticipated for the Philippines

According to the Philippine government, Standard & Poor’s (S&P) has lowered its primary forecast for the country this year and tagged a downside risk to full-year economic growth due to slow activity in the third quarter.

Two more banks were seen downgrading their projections and another recently marked data as risk for the third quarter to its own predictions.

Before the local government released the official third-quarter gross domestic product (GDP) data, the credit rating agency said the economy could grow by 6.4 percent this year, which is lower than their 6.6 percent projection last September. This is according to the report "Economic Research: Asia-Pacific Economies Limp Toward Higher-Quality Growth".

The report also included several adjustments from S&P where the 6.2 percent growth forecast for 2015 is changed to 6.3 percent and 2016’s growth will be a bit slower from 6.4 to 6.0 percent.

However, the report did not cover the 5.3% GDP growth posted last quarter, which is a huge setback from the 6.4 percent in the second quarter, and seven percent recorded during the July-September period last year. In BusinessWorld’s survey last week, 14 economists and bankers revealed that the official result is lower than their 6.5 percent average estimate.

In a phone interview, S&P Economist Vincent R. Conti said the credit rating agency is maintaining their growth projections for the meantime despite the fact that the third-quarter slowdown is tagged as "downside risk" to the revised outlook.

In the same way, DBS Bank Ltd. Economist Gundy Cahyadi stated that they will be revising the GDP growth outlook for this year and 2015. He added that the overall GDP growth for this year will be lower than six percent.



BPO Investors still Drawn to Metro Manila

by: Sarah Joson

Thursday, November 27, 2014 | Outsourcing News | Comments (0)

Metro Manila Philippines Continues to Attract Investors

Even though the Philippines is promoting the "Next Wave Cities" as feasible alternatives for business process outsourcing (BPO) operations, a lot of foreign investors still favor Central Business Districts (CBDs) in Metro Manila.

According to Jose Mari Mercado, President and CEO of the IT and Business Process Association of the Philippines (IBPAP), a handful of BPO firms are said to have expanded in remote cities and provinces, but majority still choose to set up operations in the National Capital Region. He added that one of the key factors that drive BPOs to continue to patronize Metro Manila is that it presents well-planned development. Mercado pointed out that most of the time, Metro Manila is the first choice of investors in North America.

Bonifacio Global City (BGC) is one of the hubs cited by real estate experts as a preferred location due to its growing supply of office space and well-developed infrastructure. The Vertis North by Ayala Land Corp. is another CBD tagged as an emerging BPO hub in Quezon City. It is one of the six growth centers unveiled by Ayala this month.

"Next Wave Cities" are chosen by IBPAP based on these factors: covered population, educational environment, telecommunications infrastructure, local Philippine Economic Zone Authority (PEZA) zones, etc.

Since BPO expansions are sources of employment opportunities, cities outside Metro Manila consider them as important investments. Canadian Chamber of Commerce of the Philippines President Julian Payne said the Philippines is a strategic location for BPOs because of its culture, English language proficiency, and time zone.


ICD-10 and Revenue Cycle Management

A large number of organizations are seen making the necessary improvements in infrastructure in accordance with the ICD-10 code. Although the AMA initially predicted that changes needed to match the code will not be as costly as expected, it still presents several challenges to health organizations that do not have enough resources.

Some healthcare firms are said to be tapping external providers for clinical documentation improvement (CDI), revenue cycle management (RCM), and even coding consultancy. A Black Book estimate forecasts that the RCM outsourcing market will grow from $7.7 billion to $9.9 billion by the second half of 2016. However, some are still unsure whether these processes will help healthcare organizations to mitigate the changes brought on by ICD-10.

Some companies are positive when it comes to the new codes, but others are doing their best to recover from the delayed application of the ICD-10 to October 1, 2015.

In a recent survey conducted by AHIMA and eHealth Initiative, it was found that 14 percent of providers expect that they will break even during and after the switch. On the other hand, six percent anticipate their revenues to increase due to polished billing processes.

Black Book added that RCM outsourcing activities have already displayed gains in revenue. In fact, 80 percent of hospitals that outsourced RCM activities have posted six percent increase in revenues this year. This then may help in addressing the losses from the slowdown in productivity and timely billing operations.

However, 20 percent of hospitals that outsourced RCM processes are still fearful that they are more exposed to filing for closure or bankruptcy in the next four years if their RCM technology, in-house or outsourced, is not the best in the market. Ninety percent of hospitals said they opted to outsource RCM work because it is a more economical option.


According to Budget Secretary Florencio Abad, the lack of resources for skilled workers became an issue for the Philippine business process outsourcing (BPO) industry as it was planning to challenge China as the world’s largest BPO employer.

Business process outsourcing firms looking for skilled personnel outside Metro Manila

The official noted that job opportunities in call centers, back office, and customer support-related services continue to grow annually and BPO firms are looking at major cities outside Metro Manila where untapped skilled workers are available. Abad said some of the cities BPO firms are exploring for skilled personnel include Cagayan de Oro, Butuan, and Bacolod.

The BPO industry now employs an estimated 200,000 in 120 companies - a far cry from the 2,400 workers back in 2001. Moreover, the country recently outpaced Malaysia and India and is set to challenge China for being the largest BPO employer in the world.

Back in 2010, the Philippines posted earnings of $11 billion and employed 900,000 Filipinos. It is estimated to reach $25 billion by 2016.

Abad pointed out that some BPO companies teamed up with state universities and colleges to provide call center training programs to students. Also, the government is working on providing animation, medical transcription, and web design training to Filipinos working abroad so they no longer have to leave the country, and to close the gap between supply and demand.


According to the Organization for Economic Co-operation and Development (OECD), Asian countries will expand immensely during the medium term, and the Philippines will be at the forefront, outpacing its ASEAN-5 peers in the next five years.  

ASEAN Business and Investment Summit in Myanmar

During the last day of the ASEAN Business and Investment Summit in Nay Pyi Taw, Myanmar, the study "Economic Outlook for Southeast Asia, China and India 2015: Strengthening Institutional Capacity" was released and it stated that the five-year outlook for growth prospects is positive for the emerging Asian countries: Southeast Asia, China, and India. The gross domestic product (GDP) growth in the region is expected to reach 6.5 percent annually in the 2015-2019 period. The forecast is lower than the initial 6.9 percent OECD had projected for this year up to 2018.

The report also indicated that amidst the slowdown in China, growth in emerging Asia will stabilize, while the rest of the ASEAN nations will have robust growth. It is expected to be similar to the growth of the last decade - 5.6 percent for 2015-2019.

In last year’s report, growth for China was pegged at 7.7 percent, but it’s now seen averaging at 6.8 percent in the next five years. As for the 10 ASEAN economies, OECD previously predicted that expansion will be at 5.4 percent in 2014-2018.

Within the ASEAN-5 (the Philippines, Indonesia, Malaysia, Thailand, and Vietnam), the Philippines takes the lead with GDP growth pegged at an average of 6.2 percent annually from 2015-2019. This is higher than the 5.8 percent given for 2014-2018.



Ortigas CBD Ready for BPO Operations

by: Sarah Joson

Tuesday, November 18, 2014 | Outsourcing News | Comments (0)

Ortigas Center equipped to house BPO operations

According to the latest report from Tholons, which ranked Manila, Philippines as the second top destination for business process outsourcing (BPO) operations, the sector is said to be motivating business districts like the Ortigas Center to optimize capabilities and competitiveness in hopes of attracting potential outsourcing investors who are looking to expand and set up operations in the country.

According to Sheila Lobien, head of project leasing and director of global real estate services firm JLL Philippines, Ortigas Center opened seven office towers with an accumulated gross leasable area of 15,200 sqm. this year. This mirrors the strong demand for space. In fact, 70 percent (105,500 sqm.) of new supply has already been pre-committed.  

Majority of the new buildings in Ortigas Center, including Robinsons Cyberscape Alpha, are well-equipped to be the new homes of BPO locators due to their proximity to labor pools throughout Metro Manila.

Lobien noted that Ortigas Center has an edge because it has an excellent selection of malls, 24/7 restaurants, and other after-work options that BPO employees prefer. On top of that, Ortigas Center can be easily accessed through various modes of transport in many of Manila’s main roads like Shaw Boulevard, EDSA, and Ortigas Avenue.

As the BPO industry continues to grow at an average of 20 percent annually, Lobien said Cybergate Alpha is one of the superior real estate solutions that can accommodate expansion and growth.



PH ICT-BPO Firms Urged to Join ICT Awards

by: Sarah Joson

Tuesday, November 11, 2014 | Outsourcing News | Comments (0)

ICT Awards for the Philippines' top BPO Providers

With the upcoming 9th International ICT Awards Philippines, information communication technology and business process outsourcing (ICT-BPO) companies in Davao City are urged to participate in the event.

The annual event seeks to recognize the most promising and innovative information technology-business process management (IT-BPM) organizations in the country.

The event is headed by the Canadian Chamber of Commerce of the Philippines (Cancham), together with the Information Technology and Business Process Association of the Philippines (IBPAP).

In a press conference, Cancham President Julian Payne said they look forward to getting more entries and nominations from Mindanao-based or Mindanaoan-owned ICT-BPO companies for the awards. They also expect nominations from upcoming ICT hubs such as Cebu City, Bacolod City, Dumaguete City, and Cagayan de Oro City.

Payne also said they will be rolling out promotional campaigns in Cebu City and Davao to reach out and educate more people about the event. Other cities, through their specified business chambers, are expected to attend the event.

The promotional campaign is scheduled until November 25, which is the official launch of the opening for nominations and self-nominations. Nomination period is open until January 2015.


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