by: Sarah Joson
According to the Bank of the Philippine Islands (BPI), the Philippines could withstand potential challenges posed by the possible interest rate hike by the US Federal Reserve in December or January next year.
The bank’s Chief Executive Officer, Cezar Consing, said the US interest rate hike is not a threat due to the fact that the country is positioned well in the external sector, and the Bangko Sentral ng Pilipinas (BSP) has become more flexible.
Analysts anticipate the US Federal Reserve to announce the rate hike in December or January, which has been delayed several times.
The bank executive also released a statement regarding his views on the country’s own interest rates next year, saying everything will depend on what the BSP decides on since they have more flexibility than other central banks.
The central banks, and even economic managers, have more flexibility to select their spots since the local government is experiencing very low leverage ratios. However, cash inflows from remittances, business process outsourcing, and low inflation give the Philippines more flexibility compared to other countries.
by: Karen Cayamanda
The country’s healthcare information management services (HIMS) sector aims to grow its revenues five-fold by 2020 to US$10 billion.
Last year, the sector posted revenues worth US$1.3 billion, and according to Healthcare Information Management Association of the Philippines (HIMAP) President Myla Reyes, there is a need to exert more effort as the healthcare industry faces significant transformation, with service providers compelled to adapt to technological changes. Also, patients are now more active in their care management programs, and the local sector should be able to respond to these positive changes to the industry.
Current services being targeted by the sector include pharmaceuticals, billing, claims management, member and patient management.
In the next five years, it is predicted that the local service providers could have a 300,000-strong workforce and rake in revenues reaching almost US$6 billion, but with a more aggressive plan, this could be 545,000 full-time employees and US$9.8 billion in revenues by 2020.
The HIMS Conference held recently coincided with the shift of medical coding standards to ICD-10, from the outdated ICD-9 which is currently used by HIMS providers in the country since it is still the standard widely used in the US. By October 1 this year, the country’s largest target market will use ICD-10.
by: Sarah Joson
A joint study conducted by The Associated Chambers of Commerce and Industry of India (Assocham) and global professional services organization EY revealed that healthcare business process outsourcing (BPO) providers in India will be facing off with new rivals from counterparts in the Philippines and the US.
The study pointed out that among other outsourcing verticals, the Philippines and other economical outsourcing locations are stepping up to the plate against India in the healthcare BPO space. Rivals in the US are also anticipated to be a challenge for Indian providers as it is knowledgeable in numerous healthcare outsourcing services.
Another drawback for the growth of India’s healthcare BPO market is data privacy because providers need to handle personal, classified healthcare information as private and sensitive as financial information. For Indian vendors to avoid problems related to data security and keep the worries of potential clients at bay, they would have to comply with international standards of security and privacy.
In addition to the challenges, experienced IT and BPO service providers that have technical know-how of integrated solutions, and big data capabilities are likely to have the upper hand in the healthcare segment.
India has several issues that need to be addressed. These include the rising cost of infrastructure, increasing salary levels, fluctuating exchange rates, connectivity, and power supply. India is currently the leader for healthcare BPO services, but concerns over policy framework such as data privacy laws, tax laws, intellectual property (IP) protection laws and clinical trial laws persist.
Michael Angelo Oyson, Trade chief executive officer and managing director at Bank of the Philippine Islands (BPI), said the “new normal” or standard growth rate for the Philippine economy is 5-6 percent, based on consumer spending. He said the consumer-driven gross domestic product (GDP) can only grow by six percent if public spending improves.
Meanwhile, the Aquino administration is still hoping to reach the 7-8 percent growth this year.
Oyson noted in a briefing that for the GDP growth, the economy is now reaching a stage of standard GDP growth or a “new normal” where a 6-7 percent growth is on the high side. The more realistic projection, he said, is a 5-6 percent GDP growth.
BPI projected that growth will be 6.2 percent for 2015 - growth for 2014 was 6.1 percent.
Oyson pointed out that consumption expenditure is responsible for about four percent of the total 5.6 percent GDP growth in the first quarter.
As for the foreign and stock exchange markets, the Philippines is not yet safe from external risks such as the US Federal Reserve interest rate hike and the slowdown in China.
According to Daniel Martin, senior Asia economist at Capital Economics, data for the second quarter, though faster, still fell short of their anticipated growth, which is why they have set a growth of 5.7 percent instead of six percent.
Due to weak global demand and lack of government spending, economic growth during the second quarter of this year is 5.6 percent, far from the 6.4 percent recorded in the same period last year.
Despite the improving government spending and robust domestic consumption, minimal movement was seen in the second quarter, even though it was faster than the revised five-percent growth pegged in the first quarter.
Regional economist Raul Bajoria of British-owned investment bank Barclays said they slashed its GDP growth outlook for the country to 5.5 percent instead of 6.5 percent this year as government spending remains weak and indefinite external demand. But, the economist noted that even with the lower growth forecast, the Philippines is still cited as one of the fastest-growing economies among the major ASEAN countries this year.
Jeff Ng, economist at Standard Chartered Bank Southeast Asia, said the Philippines is expected to post a growth of 5.7 percent this year and six percent in 2016 as the domestic economy remains intact. In fact, local consumption surpassed other ASEAN nations’ figures over the last five years.