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Outsourcing News for March 2018 | MicroSourcing


DOF Sees Faster Economic Growth in 2018

by: Sidney Liquigan

Wednesday, March 21, 2018 | Outsourcing News | Comments (0)

In February 22, Department of Finance (DOF) Secretary Carlos G. Dominguez III said in a speech before the United States-Philippines Society (USPS) members that the department expects the Philippines' GDP to grow faster in 2018 and 2019, mainly driven by the current government's tax reform programs, as well as the efficiency in public spending and major infrastructure projects, as reported by Manila Bulletin.

"We are confident the revenue reforms, sustained fiscal discipline, better spending efficiency and massive investments in infrastructure will enable us to escalate growth to between seven and eight percent in the near term," Dominguez said. In 2017, the Philippines' GDP growth was at 6.7%.

Dominguez also added that the projected growth pace will contribute to bringing down the country's poverty incidence from 21.6% in 2015 to 14% by 2022.

Confirming that the current rapid economic growth is not an unusual occurrence, Dominguez noted that the Philippines' GDP growth in 2017 capped 76 consecutive quarters (19 years) of uninterrupted growth. He also added that the country's economy has maintained a growth rate of 6% or above for 11 quarters now.

In the speech, Dominguez also talked about the inflation caused by the recently implemented TRAIN Law. In January, inflation was at its highest (at 4%) in three years. However, he assured that this will be temporary.

"We estimate that it will remain within the two to four percent threshold set by our monetary authorities. The recent uptick in inflation is due largely to the spike in international crude oil prices as well as the efficiency of BIR tax collections," Dominguez said.

As for the country's external sector, Dominguez said that it continues to be our economy's source of strength, driven by a strong BPO sector.

"Our healthy external payments position, marked by adequate foreign exchange reserves, declining external debt ratio and backed by sustained flows of remittances and revenues from the Business Process Outsourcing sector give investors comfort about the Philippines' resilience to future external shocks," Dominguez noted.

Further, tourism also plays a big role in the faster economic growth. For 2018, Dominguez said that DOF expects tourist arrivals to exceed 2017's 6.6 million by a significant number. He also added that a large portion of the tourists is expected to come from China.


BPO positions top in-demand jobs for 2018

by: Sidney Liquigan

Tuesday, March 20, 2018 | Outsourcing News | Comments (0)

In February, Jobstreet.com released an outlook report, forecasting the BPO sector to generate the most jobs in 2018, as reported by ABS-CBN News. In its outlook report, Jobstreet.com also reported that the BPO sector posted the most job openings in 2017, mostly in the specialized fields of finance, accounting, and IT, as well as in call centers.

"This industry has been hiring candidates for many different specializations. They are not just hiring for customer service," said Cielo Javier, country marketing manager of Jobstreet.com.

Despite concerns regarding the rise of AI, there is still a strong demand for BPO workers. This shows that BPO jobs are evolving and there will always be opportunities for human talents. According to Jobstreet.com's report, we can expect the most job openings for customer service representatives, telesales and telemarketing agents, technical and help desk support, and hardware and software development positions.

Jobstreet.com's report also stated that the increasing demand for BPO workers will contribute to the growing demand for teachers, as BPO-related teaching jobs will be opened.

Next to BPO, the retail sector will have the second most job openings, specifically in the fields of sales, marketing, purchasing, warehouse management, and human resources. The third most in-demand jobs will be in the manufacturing sector, specifically sales, finance, accounting, purchasing, warehouse management, mechanical engineering, and customer service positions.

Healthcare processes, such as medical billing and coding, are included in the common business functions that you can outsource to BPO companies all over the globe. With healthcare sector having many of the biggest businesses in the world, it is not surprising that healthcare businesses outsource their processes to improve their operations, boost financial performance, and serve their clients and patients more efficiently.

According to a global forecast, the healthcare BPO market is projected to accumulate USD449,623.8 million at a CAGR growth of 12.3% from 2017 to 2023. In 2016, the pharmaceutical service segment accounted for the largest share in the global healthcare BPO market at 72.2%.

The leader in the global healthcare outsourcing market is the Asia-Pacific region, due to lower labor costs, approximately only 33% of the costs of those in more developed regions. In addition to lower labor costs, the main drivers of the Asia-Pacific market are improvements in other areas, including the business environment, economic and political risks, and IP protection, to name a few. In this region, the Philippines is expected to be the fastest growing market.

The second leading healthcare outsourcing market is the Americas led by Brazil, Chile, Mexico, and the US, while the third largest market is Europe led by Poland, Bulgaria, and Romania. The Middle East & Africa region is also keeping up, with a projected moderate growth.


BPO Advantages in the Philippines Outweigh Risks

by: Sidney Liquigan

Thursday, March 15, 2018 | Outsourcing News | Comments (0)

On March 8, 2018, the second IT-BPM Business Resiliency Summit was held at the Manila Marriott Hotel. During the Pacific Strategies Assessments' (PSA) presentation, Managing Director Mark Condon said that despite the global news reports on terrorism, crime, and corruption in the Philippines, the negative perception is outweighed by the fact that BPO is a successful industry in the country, as reported by Malaya Business Insight. This means that businesses overseas are confident in outsourcing to the Philippines, mainly due to the quality of service that Filipino workers provide and the competitive wages.

In advising foreign clients, Condon said that the two key issues that these clients always raise are 1) the safety of the workers and exports and 2) the local ownership required when setting up a business here. He continued that PSA advises foreign clients to perform due diligence, which is an essential element to understand the people they are dealing with. Due diligence will help businesses identify "what the drivers are to be successful to operate in the Philippines."

Condon added that to be able to avoid compliance issues and to be prepared for threats when outsourcing to the Philippines, foreign businesses should learn to adapt and understand the environment and how things work in the country. He also advised to think about the competitive advantage of outsourcing to the Philippines – including the quality of Filipino workers and their proficiency in the English language as well as the lower labor costs – if these can overcome the risks.

In the same event, the IT and Business Process Association of the Philippines (IBPAP) President Rey Untal said that despite the technical issues and weather hazards that Philippines-based BPO firms face, Filipino BPO workers proved to be resilient and the firms have the ability to recover quickly from any adversary, not letting anything hinder their growth.

"The Philippines should focus on how to be resilient whether in disaster risk management or protection from terrorism and violence," Untal said.

Consistent with global expert predictions of a 9% annual growth in the Philippine BPO industry in 2018 and for the next five years, Leechiu Property Consultants (LPC), the exclusive leasing agent of St. Francis Square in Ortigas Center, has confirmed last January that BPO companies remain as a driver of the office market in Metro Manila’s business districts. In response to this, office developers continue to be competitive in offering properties to BPO locators.

"In this market, BPO locators have become more conscious of running more efficient operations," said LPC Associate Director Miguel Manipol, referring to BPO locators that look for buildings with large floor plates to maximize operating costs. Large floor plates mean more workstations can fit on a floor, allowing managers to more effectively supervise more employees; unlike with buildings with smaller floor plates that need a large group of employees to be spread out over more than one floor.

Catering to this need, St. Francis Square offers two floors with a floor plate of 4,332 sq.m. each, the largest in the Ortigas area. In addition, this PEZA-accredited building also leases out another floor with a 2,882-sq.m. floor plate.

In addition to spacious floor plates, location is another factor that locators consider. Located in a visible and accessible area, on Bank Drive corner Julia Vargas across SM Megamall and near EDSA, St. Francis Square is surrounded by a number of retail and dining options, as well as transport hubs, making it an attraction to many international BPO companies.

Manipol added that the BPO industry is predicted to create approximately seven million new jobs. For this reason, locators will look for an office space that they don't need to share with other BPO companies and one that offers visible branding opportunities such as placing the company's logo on the building’s façade. This stand-alone advantage allows BPO companies to efficiently promote their brand among job-seekers and avoid employee poaching, which is rampant among BPO companies.


BPO Workers Upskill as Automation Takes Over

by: Sidney Liquigan

Tuesday, March 6, 2018 | Outsourcing News | Comments (0)

According to Socioeconomic Planning Sec. Ernesto Pernia, the rise of automation and the use of artificial intelligence will hit BPOs harder in the next three to five years, as reported by ABS-CBN News.

The BPO industry has indeed started to feel the effects, as the Philippines' miscellaneous services contribution, which includes BPO, to the country's GDP slowed down to 9.2% from 2016 to 2017, compared to 19.8% from 2015 to 2016.

Pernia added that voice-based services, such as those offered by call centers, "is not going to be necessary anymore when you have machines to do it."

Socioeconomic Planning Usec. Rosemarie Edillon added that the BPO industry should look into diversifying and look for opportunities in big data analytics, software development, healthcare information management, and related fields.

IT & Business Process Association of the Philippines (IBPAP) president Rey Untal encourages BPO workers to upskill, as IBPAP projected that 43,000 low-skilled workers would lose their jobs to automation, and at the same time, there will be 697,000 opportunities for middle- to high-skilled jobs.

"Contrary to popular belief, the automation of processes is not meant to replace people, it's supposed to help them," Untal said.

Untal points out that upskilling would open a lot of opportunities for Filipino BPO workers, qualifying them for new jobs that offer higher pay and more secure tenure. Upskilling would also give workers a competitive advantage over BPO workers in other countries.

BPO companies are already in collaboration with the government in providing opportunities for call center agents to upgrade their skills and qualify for higher value industries.

"For the contact center agents' part, taking a more proactive approach to self-improvement, education, and skills development could enable them to acquire up-to-date, industry-standard skills that will keep themselves competitive in the job market," Untal added.

On the other hand, Sitel COO Craig Raines believes that "human touch" will remain to be the added value that call center agents will bring as a supplement to customers' digital experience.

"Emotion will be the main added value. Human touch will be the main differentiator for any company. Based on the trends, we just don't believe that automation and robotics will eliminate human experience," Raines said.