US Ambassador to the Philippines Sung Kim assures that the US information technology-business process outsourcing (IT-BPO) companies based in the Philippines continue to maintain good business in the country.
This follows concerns on US President Donald Trump's plans on job policies, which can cause US outsourcing companies to defer their investments in the Philippines, as quoted from Philippine Economic Zone Authority (PEZA) Director General Charito Plaza in earlier news reports.
"We (in the Philippines) have a very young population, smart, very competent, and very hardworking. There's also a very strong cultural affinity so I think BPO will continue to do very well," said Kim, who made the statement during his first visit in Cebu recently for the general membership meeting of American Chamber of Commerce of the Philippines-Cebu Chapter held at the Cebu City Marriott Hotel.
The ambassador believes that much of the threats in the IT-BPO sector come in the form of automation, which replaces human workers, leading to job loss.
This is further affirmed by the International Labor Organization (ILO) report, which notes that majority of 89% of BPO employees are at "high risk" from robotic process automation.
Kim validated that Filipinos continue to be the preferred workers for US IT-BPO firms, which currently hires 1.3 million Filipino workers.
The economic partnership between the US and the Philippines is maintained, despite setbacks in 2016.
"We want to assure you that the United States will continue to partner with the Philippines and look for ways to increase foreign investment, reduce trade barriers, and streamline business regulations," he said.
More companies are turning online for their recruitment, as evidenced by a 12% increase between May 2016 and 2017 in the latest results of Monster Employment Index (MEI), a monthly gauge of online job-posting activity, based on a real-time review of millions of employer-job opportunity data from career websites and online job listings nationwide.
Monster.com managing director for Asia Pacific and Middle East Sanjay Modi said that the Philippines is set to gain sustainable-employment growth in the year ahead. This is due to a highly stable macro economic environment supported by strong economic structures.
"This is evident from the latest BMI research results which said the Philippines’s business friendliness has made it favorable for investments, production activities and job creation," he said.
"In line with our MEI findings, the Philippine Statistic Authority’s latest data showed the unemployment rate has fallen when compared to the corresponding period from last year," he added.
The MEI results showed the fifth positive annual growth for the country since January of this year, with 106 total job listings last compared, which is higher than the recorded 95 in May last year.
Web-based recruitment continues to enjoy an upward trend, with the internet technology (IT) and business process outsourcing (BPO) services industry gaining the strongest growth in online hiring.
There was a 30% increase in May 2017, with 138 employments were placed online compared to the 106 posted during the same period in 2016. This is considered as the highest growth industry year-on-year (YoY) increase in web recruitment in May.
According to the MEI's monitored occupation groups, customer-service talents are the most in-demand and most hired, at a 40% YoY growth in May this year from 107 to 150. It was a 10-percent increase from the 30% YoY growth in April of the same year.
It is followed by software, hardware, and telecom, from 106 to 117. Hospitality and travel, healthcare, engineering, real estate, and human resources and administration are recorded to have less occupational demands.
The BPO sector currently employs 1.2 million people and is anticipated to grow to 1.8 million within the next five years, as stated in the Information Technology-Business Process Association of the Philippines Roadmap 2022 report.
The second strongest sectors are logistics, freight, transportation, courier, shipping, import, and export, with an increase of 17% from 108 to 126.
Education has the lowest growth, with negative 3%, from 113 to 110.
On the other hand, the engineering and real-estate sector has a 6-percent decline from 88 to 83 YoY in online hiring in May.
"Being a shining spot in Asia’s economy, it is likely the country has come under the scrutiny of international players who can potentially and rapidly introduce new jobs in a short span of time. Even then, therein lies a need for business owners and employers alike to remain cautious and to always have sufficient plans to cushion potential headwinds," Modi said.
by: Mary Christine Galang
The Data Privacy Act of 2012, or Republic Act 10173, will significantly increase the Philippines' position as one of the most preferred destinations for business process outsourcing (BPO) in the world, according to the Contact Center Association of the Philippines (CCAP).
Espie Bulseco, Learning Series Task Force lead of the CCAP Security Council, said that the Data Privacy Act will mandate all BPO firms in the country "to ensure protection to personal data resulting to an increase in foreign investors' confidence in growing their outsourcing requirements."
All BPO companies are required to comply with RA 10173 and are given a timeline to register with the NPC on or before Sept. 9, 2017, or one year from the effectivity of the implementing rules and regulations of the law.
This will strengthen and increase the capability to handle outsourcing requirements of countries that have their own data privacy laws that restrict transfer of data of their residents outside their region unless the offshore provider is based in a country with existing privacy laws, which the Philippines have in place.
In addition, CCAP said that the Philippine government is fully enacting the law to ensure BPO firms will comply with the cyber security and data privacy regulations to safeguard user information.
To further strengthen the implementation of the Act, CCAP has come up with several measures that include data privacy, cyber security, and governance-related issues and practices to update the BPO industry.
According to Tonichi Achurra-Parekh, CCAP board director and trustee for CCAP Security Council, "The industry has been playing an active role in educating our members through forums as well as answering data privacy-related issues in some of our conferences."
This includes organizing one of Asia's biggest data privacy summits, the recently concluded Data Privacy Asia 2017, which was held on July 20, 2017, at Makati Shangri-La Manila.
"The summit is in response to that growing need to educate and also accelerate our expertise in our industry," Achurra-Parekh said.
CCAP president Jojo Uligan said that the summit’s objective is to position the Philippines as the "best-in-class" when it comes to guideline implementation and upholding data protection and privacy, given the amount of data that goes through BPO firms in the country.
"Part of the objective is to communicate the trends and the threat landscape on cybersecurity when processing millions of data, and to establish the Philippines as a country with advanced data protection and privacy regulations to address these threats, ultimately to make the world entrust their business data with us," Uligan said.
The summit also focused on global perspectives as international experts discussed the best practices and creative solutions concerning data privacy and cyber security issues to apply in the country.
Additional initiatives include supporting, aligning, and rolling out programs related to the BPO industry, with the help of the National Privacy Commission (NPC) through its head and chairman Raymond Liboro.
CCAP has also been briefed on the NPC’s short- and long-term projects and is expected to continue to see the support through in implementation and guidelines.
by: Mary Christine Galang
Bacolod City is eyed by leaders of the local information technology (IT) sector to follow Cebu City as one of the country's hubs of knowledge process outsourcing (KPO).
According to Joey Bondoc, research manager of Colliers International, a global real estate services company, "KPO companies offer higher value outsourcing services such as medical transcription or health information management (HIM), software engineering, and finance and accounting."
Colliers reported that outside Metro Manila, Cebu remains to be the largest and most practical choice for KPO firms due to its diverse and skilled labor pool.
Jocelle Batapa-Sigue, executive director of Bacolod-Negros Occidental Federation for ICT (BNeFIT), expressed that Bacolod City is primed for these high-value KPO services, especially HIM and software development.
"After having been declared as Center of Excellence for business process outsourcing (BPO) especially in contact center services in 2013, BNeFIT, in collaboration with the city and provincial governments has developed strategies to target three high-value areas: HIM, software development and creative processes like game development and animation," Batapa-Sigue said.
She cited five important points in order for the city to become a fully-realized KPO key city.
by: Mary Christine Galang
The "key" to expanding the ever-growing business process outsourcing (BPO) sector in the Philippines is its young, English-speaking population, according to real estate consultancy firm Santos Knight Frank.
This is despite the House of Representatives approving the measure on May 31, which includes the first measure of the Duterte Administration-proposed tax reform. The substitute bill, House Bill 5636 or the Tax Reform for Acceleration and Inclusion, proposes lower income tax rates and lifting exemptions in various benefits like the 13th month pay.
However, it also seeks to lift VAT exemptions in different sectors and adjust excise taxes on fuel and automobile, as well as to remove tax incentives of BPO firms. If enacted into law, a 12% VAT would be imposed on the BPO companies' gross receipts.
Santos Knight Frank Chairman and CEO Rick Santos remains confident of the Philippines as an investment destination and said there are plenty of factors that make the country attractive to investors.
"I think the demographics are key. The Philippines has the people which are the secret sauce to the growth of BPOs," he said.
"It really comes down to skills, the English, the age of the workforce ... Those are the imperatives for the BPO firms," Santos added.
"The BPO industry is the biggest private sector employer today, with 1.5 million direct and 3.7 million indirect employees. The sector also contributed 8 percent to GDP (gross domestic product), with export revenues close to $25 billion," he added.
However, Santos maintains that the removal of tax incentives of BPO firms and its impact on the sector should be carefully studied and an open, continuous dialogue with the government is important in securing a beneficial future for both parties.
"We see fiscal incentives are important to encouraging the growth of BPO investments in the country," he said.
"Incentives are great drivers for growth in that sector. I think that is important to their expansion agenda," he added.