by: Sidney Liquigan
In the age of automation, many companies in the IT-BPO industry are turning to artificial intelligence (AI) to cut operational costs. The emergence of AI and the increase in the kinds of work processes that automated systems can handle is a clear threat to the Philippine BPO industry, which is currently largely reliant on relatively simple tasks. However, the Philippine government has found a solution to help BPO workers keep their jobs while also taking advantage of technological innovations.
The Department of Trade and Industry (DTI), with the help of the Department of Information and Communications Technology (DICT) and tech company AI Pros, plan to train BPO workers on the use of Augmented Intelligence (AI2). AI2 refers to the use of IT in enhancing human intelligence.
"Instead of AI replacing jobs in the IT-BPO industry, which is estimated to affect half of the 1.3 million jobs in the sector, the workers will be trained to make use of AI2-enabled systems," said DTI Secretary Ramon Lopez. According to Lopez, this training is a way to take advantage of the AI system as a solution to the so-called threats that it may bring.
"We are the first country to launch this kind of initiative. Instead of looking at AI as a threat to the BPO industry, the Duterte administration is using AI2 to provide more opportunities for inclusive growth," Lopez added.
DTI anticipates AI2 to improve the competencies of BPO workers and targets 482,000 unskilled workers to learn to do low-skilled work, 525,000 low-skilled workers to learn mid-skilled work, and 309,000 mid-skilled workers to become eligible for high-level jobs.
To elaborate, AI2-enabled systems still need humans to operate them. Data-driven technologies can process data and suggest predictions and patterns faster, but these are based off of algorithms that were programmed into the system by a person. As the term "augmented intelligence" suggests, these systems are not meant to replace humans, but rather to augment their intelligence so they can be more efficient in their jobs.
In the BPO industry, data processing and analytics will be one of the fields that will be affected by the AI threat. There are technologies now that can perform in-depth data mining, eliminating the need for data entry professionals. To help them stay in the workforce, the AI2 training program will upskill data entry professionals to handle more complex tasks such as creating strategies and drawing conclusions from the trends and patterns identified by the systems from the data.
Customer service agents can also benefit from the AI2 training program. Augmented intelligence platforms have the ability to provide insights into customer behavior and can predict their needs. The workers will be trained to understand these insights and determine the appropriate actions to deliver according to customer expectations.
In digital marketing, we've been encountering AI2-enabled algorithms every day. Researchers and marketers make use of internet algorithms to study each individual's online activity. The information will then be used to improve products and services and come up with creative advertisements that will reach the right audience at the right time.
Acting DICT Secretary Eliseo Rio said that the training program is part of the "Philippine AI Workforce" brand campaign, which aims to open more job opportunities to Filipinos as well as to extend the development outside the metro.
"We will train and enable our workforce, regardless of their background and experience, to use AI2 to perform smarter and complete difficult tasks, and help them move up the value chain," Lopez said. He also confirmed that this initiative is also open to non-BPO workers, so every Filipino can learn to work with AI and advance in their respective fields.
by: Sidney Liquigan
On March 21, 2018, the Contact Center Association of the Philippines (CCAP) and the Department of Information and Communications Technology (DICT) facilitated the GenNext Leadership Forum with the theme "Leadership in the Age of Disruption". The GenNext Leadership Forum was attended by middle managers from different call center firms in the Philippines. The forum served as a venue for next-generation leaders to hear insights and learn from industry thought leaders and prominent executives who were invited to speak at the event.
Simultaneous with the GenNext Leadership Forum is the Team Leader Summit, which was attended by contact center team leaders with senior managers invited as speakers.
Throughout the events, the recurring message implied was the need of Philippine contact centers for more competent leaders as the sector continuously grows. The speakers shared how future leaders in the contact centers can prepare for the challenges that come with being a leader in the age of disruption.
As innovations in technology continue to evolve, the speakers emphasized the need to update skills in order to maintain growth and create new opportunities. The future leaders were advised to continue learning on their own instead of waiting for formal training opportunities to arrive. Call centers were also advised to address the challenges of complex digitized transactions by encouraging the further understanding of digital operations and analytics.
"We need to continue the education, the partnership, the collaboration so everybody will understand exactly what we need to do as an industry, as a country to be able to capture the growth and to be able to capture new potential business opportunities," said CCAP President Jojo Uligan.
The GenNext Leadership Forum and Team Leader Summit comprise a series of sessions. The second session was held last April 23 in Alabang, and the next two will be on May 28 in Cebu City and August 13 in BGC.
by: Sidney Liquigan
According to Colliers Philippines, the total office supply in Cebu would reach about one million square meters in 2018, as reported by SunStar Cebu.
Office leasing in Cebu is mainly driven by BPO companies, with call centers representing more than 50% of total office leases and knowledge process outsourcing (KPO) firms representing 20% in 2017.
Colliers Philippines predicts that for this year, offshore gambling will also become a main player in Cebu's office leasing activity. In 2017, offshore gambling represented 25% of total office leases. Total office transactions in 2017 were at about 107,000 square meters.
"In Manila, offshore gambling is driving the leasing activity of properties, which also have condominium components. And with the continued rise, we expect the same trend to replicate here," said Colliers Philippines Research Manager Joey Roi Bondoc.
Property developers who offer their office spaces to offshore gambling firms were advised by Bondoc to consider building condominiums to complement the offices. As the new office spaces open job opportunities, more workers may need to look for living spaces that are near the business districts.
Furthermore, if Cebu’s local government units would extend local regulations that are more beneficial for businesses like offshore gambling, Colliers Philippines could see an increased growth from the offshore gambling industry in the next two to three years.
As for KPO and business process management (BPM) firms, their annual growth in terms of office transactions is expected to be consistently at around 10% until 2020.
Colliers Philippines also sees the government's 'Build, Build, Build' and decentralization initiatives to be favorable to the office leasing growth in Cebu. The government's programs are said to encourage more offshore gambling and BPO companies, as well as other businesses, to consider the province as a viable location.
"We encourage both landlords and tenants to explore business opportunities within the Call Center City that the local government proposes to develop with the private sector; build office space that could accommodate non-outsourcing and traditional businesses that require smaller cuts; assess the needs of offshore gambling; and open more flexible workspace," Colliers Philippines stated.
by: Sidney Liquigan
At the second Senate hearing on AI's threat on BPO, Senator and Committee on Science and Technology Chairman Paolo Benigno "Bam" Aquino IV urged the government to protect over 1.4 million BPO jobs in the Philippines from impending threats brought upon by AI, the shifting economic policies of other countries, and the Tax Reform for Acceleration and Inclusion (TRAIN) Law.
"We must prepare for these threats and not be caught flat-footed," said Sen. Aquino. "Our fellow Filipinos cannot afford to lose their livelihood, especially in these times," he added.
During the first hearing, the Information Technology and Business Process Association of the Philippines (IBPAP) mentioned that by 2022, there will be a decline in demand for low-skilled jobs in the IT-BPO industry of about 43,000 jobs. However, there is also a potential that AI will open up 388,000 mid-skilled jobs and 309,000 high-skilled jobs, which Sen. Aquino hopes the Filipino BPO workers can be ready for.
"The clear solution is to retrain our workers and upgrade their skills to be viable for higher job levels. Our training centers and academic institutions must start offering courses for these higher-skilled BPO jobs," Sen. Aquino said. He also added that these courses could also be offered through scholarships and TESDA vouchers.
Sen. Aquino also emphasized the urgency of the matter, suggesting that government agencies should take action immediately before the threats start to leave the low-skilled BPO workers jobless.
"I want to see urgency in our agencies to move this forward quickly and with purpose. This is the first time in years that the BPO industry will be at risk. We need to protect our countrymen's jobs," he said.
Aside from discussing the threat of AI to the BPO sector in the Philippines, the Senate hearings headed by Sen. Aquino and the Committee on Science and Technology also aim to determine how the TRAIN Law affects the sector and how the effects can be corrected in the next tax reform package.
Sen. Aquino also announced a third hearing that will occur this month.
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.
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.
by: Sidney Liquigan
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.