The Outsourcing Week in Review: Wednesday, June 6, 2018

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Welcome to Inside Outsourcing: The Outsourcing Week in Review

This week saw some big names expanding their outsourcing operations in the country. Facebook opened a new office in Bonifacio Global City and Californian BPO player Enshored opened its second centre in Ortigas. Teleperformance also announced its formal bid for India’s outsourcing giant Intelenet: both firms have substantial operations in the Philippines employing many thousands of people.

The positive moves were not only in Metro Manila, the regions also had good news. Cebu mayor Tomas Osmeña announced that he is pushing through with his Call Center City project, which will add substantially to the city’s office capacity. Hermosa Economic Zone in Bataan announced that it had received strong interest from Chinese investors. The Metro Bacolod Chamber of Commerce and Industry in Negros was bullish on the positive impact that the new Ease of Doing Business Act will have on accelerating investment in the region. Given several major new developments targeting the sector in Negros Occidental, that are due for completion soon, this will be welcome news.

Two important organizations also came out strongly on the optimist’s side of the argument that automation and artificial intelligence should be viewed as an opportunity for the BPO sector and not a threat. The Asian Development Bank released a report showing that contrary to the fears of some, artificial intelligence is actually creating more jobs in Asia than it is destroying. The Contact Center Association of the Philippines (CCAP) also announced that is forecasting the industry will add 70,000 jobs to the workforce. Both of these forecasts, of course, are underpinned by the assumption that the Philippines can train enough people – and fast enough – to meet the new skill sets that these new jobs will require. The Department of Information and Communications Technology’s announcement that it plans to add government-backed training in augmented intelligence skills to its portfolio of programs is another solid step forward in meeting this challenge.

However, storm clouds still linger on the horizon over concerns on government legislation. Already, the Department of Labor and Employment has said that it has identified more than 3,000 companies involved in illegal contracting, including some of the Philippines’ biggest. And whether BPO firms will continue to enjoy their tax breaks is still undecided. IBPAP has argued that if the tax breaks are to be removed they should at least be introduced with a sunset period to make it easier for firms to adjust. The CCAP has said that its original forecast of 7-9% growth per year did not take into account the effects of the loss of incentives, and might have to be downgraded as a consequence. Importantly, it has pointed out that the Philippines is already 10% more expensive than India as an outsourcing destination. The industry is highly cost sensitive, and pushing the costs up further against competitors by removing the current tax concessions is likely to be a dangerous move.


News Roundup

4 June, 2018
AI creates more jobs in Asia than it destroys – ADB – read article…
Philippines government to train workers in augmented intelligence – read article…
BPO jobs to be created in Negros from major project completions – read article…

1 June, 2018
Outsourcing industry needs to review growth forecast – CCAP – read article…
Cebu to push through with Call Center City project – read article…
US BPO Enshored opens a second center in the Philippines – read article…

31 May, 2018
BPO industry to add up to 70,000 agents annually despite AI threat  – read article…
IBPAP seeks longer ‘sunset’ period for tax incentives – read article…
Newly-amended Anti-red tape law could boost local business – MBCCI – read article…

30 May, 2018
Teleperformance becomes strong contender in Intelenet acquisition – read article…
Chinese investors eye investment in Bataan’s Hermosa ecopark – read article…
108 firms, 4,100 applicants attend Cebu job fair – read article…

29 May, 2018
PH outsourcing sector 10% more expensive than India – CCAP – read article…
DOLE identifies 3,337 firms involved in illegal contracting read article…
Facebook opens new office in Bonifacio Global City – read article…

Read more Inside Outsourcing Newsletters here:

  1. The Outsourcing Week in Review: May 30, 2018
  2. The Outsourcing Week in Review: June 13, 2018

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