by: Sarah Joson
United Nations Conference on Trade and Development, and the World Trade Organization recently revealed their assessment on the performance of the global outsourcing industry. It was found that during the third quarter of last year, revenues amounted to $7.1 billion, which is 11.8 percent higher than the amount posted during the same period in 2013. The growth seen in Q3 2014 is also higher than the $4.7 billion posted during the first quarter, and $6.1 billion in the second quarter.
According to Jose Mari P. Mercado, CEO and President of the IT & Business Process Association of the Philippines (IBPAP), the country is on track in achieving the $25-billion revenue target indicated in the 2016 IT-BPO Road Map. Factors such as the number of new locators and expansion of existing outsourcing firms are believed to be the growth drivers.
On the other hand, Senen M. Perlada, Director of the Department of Trade and Industry Export Marketing Bureau, believes that the overall service exports, which cover non-commercial services, will not reach the 2014 government revenue target of 12-12.2 percent or $24.4 billion to $24.81 billion. However, the increasing number of road shows, favorable exchange rate, and sustained interest from potential investors contributed to the positive outlook for service exports in 2015.
Call center companies in the Philippines are eagerly waiting for the official announcement on tax incentives. The Contact Center Association of the Philippines aired their sentiments regarding the possible removal of tax breaks from the perks given to the outsourcing industry, saying it would weaken the sector and affect its achievements.
In a press briefing at SMX Convention Center, CCAP President Benedict Hernandez said officials need to see it from their point of view, stating that the proposed adjustments could be detrimental to the growth of the industry and affect job production in the country.
The key issue revolves around the outsourcing companies registered at the Philippine Economic Zone Authority (PEZA) that are entitled to an income tax holiday of four to six years. This is on top of other incentives that these organizations are already getting.
CCAP pointed out that call centers prefer the income tax holiday for six years instead of the proposed reduction of the corporate income tax of 10 percent for 15 years.
Hernandez added that other countries are getting better incentives, and though the Philippines’ package is not the best, they don’t want to have it worse.
Everest Group, on the other hand, said the Philippines is still the top destination for voice processes, taking up 36 percent of the total market share of outsourced services globally.
Voice functions take the lion’s share with 90 percent, followed by non-voice processes such as email and chat support that are seen gaining traction as demand continues to increase.
by: Karen Cayamanda
Based on a report by the Urban Land Institute (ULI) and PwC, the country’s business process outsourcing industry will continue to be a growth driver for the property market as it calls for more office space and development.
Manila was at the 8th spot in the list of Asia Pacific countries in investment and development prospects, according to the Emerging Trends in Real Estate Asia Pacific 2015 report. This ranking is higher than Singapore, Taipei, and Bangkok.
The study stated that Manila’s popularity will be supported by strong economic growth as well as the ongoing investment in the outsourcing industry. Also, the robust industry resulted to strong growth in retail and housing sectors.
Hans Sicat, President of the Philippine Stock Exchange, said the industry will continue to grow as BPO hubs in the country expand their services to foreign clients. He added that the talent pool and the expansion of various skill sets available in the country are strong growth indicators. There is also an increase in the number of countries where the Philippines offers its services.
Alex Cabrera, Chairman and senior partner at Isla Lipana, said local companies also contribute to the growth of the industry. He added that the educational system must be realigned to include courses that focus on training BPO agents.