The Outsourcing Week in Review: Thursday, April 13, 2023

Welcome to Inside Outsourcing: The Outsourcing Week in Review

THE WEEK IN REVIEW

Welcome back from Easter’s choc-fueled malaise! While everyone has been resting, the world of outsourcing has been powering on.  Let’s review the happenings in Philippine outsourcing this week.

Gains in the Business Process Outsourcing (BPO) industry helped lessen the 17.2% trade deficit in the Philippines. According to the Asian Development Bank (ADB), the service surplus in the outsourcing, finance, and tourism sectors and rising remittances from Overseas Filipino Workers (OFWs) helped cushion the country’s 17.2% merchandise trade deficit for 2022. A trade deficit is when a country imports more goods and services than it exports. However, the International Monetary Fund (IMF) clarified that “whether a deficit is good or bad depends on the factors giving rise to that deficit.”

In economic news, the Philippine headline inflation slowed from 8.6% in February to 7.6% in March. In its latest report, the PSA said the downtrend was mainly brought by three commodity groups — food and non-alcoholic beverages; transport; and housing, water, electricity, gas, and other fuels. PSA added that the average inflation rate of the Philippines for Q1 2023 stood at 8.3%. Meanwhile, Rizal Commercial Banking Corporation (RCBC) chief economist Michael Ricafort believes the government needs to implement new tax measures to boost the country’s revenues. In a statement, Ricafort explained that intensified tax collections and more disciplined fiscal spending will “further improve the country’s fiscal performance and help achieve more sustainable debt management for the coming years/generations.” According to data released by the Bureau of the Treasury, government revenues dipped by 0.25% to PHP211.9 billion (US$3.89 billion) in February, partly due to a drop in Bureau of Internal Revenue (BIR) collections.

Manila will stand out among other major cities in Asia Pacific (APAC) this year thanks to outsourcing. In its latest report, think tank Oxford Economics said the city’s dynamic BPO sector could help stabalize overall employment growth for 2023 compared to other major APAC cities. In line with this, the Philippine Statistics Authority (PSA) reported an 8.4% increase in outsourcing headcount in 2022, with hopes of hitting 1.7 million by year-end. And the Philippine Economic Zone Authority (PEZA) is ready to step in to reach this target! During his first State of the PEZA Address (SOPA), PEZA Director General Tereso Panga said they are prepared to work with outsourcing industry associations and locators to ensure job creation and security in the country. Panga added that he plans to leverage BPOs, semiconductor and electronics, and health services to ensure the Philippines remains at the forefront of global investment destinations.

Speaking of job openings, outsourcing firm Sutherland Global Services will hire around 1,000 fresh employees in its new Ilocos site. Ilocos Norte Investment Office Head Rona Leigh Cheng Bueno said they are assisting the firm in its transition. The outsourcing company also partnered with Mariano Marcos State University (MMSU) to help upskill Ilocanos in customer service and technical support. Sutherland Philippines currently has ten centers across the country.

However, local industry groups believe a national talent upskilling program is needed to address the lack of qualified workers in the Information Technology And Business Process Management (IT-BPM) industry.  IT and Business Process Association of the Philippines (IBPAP) President Jack Madrid said an online talent hub and early-stage interventions are needed to improve the employability of senior high school and college graduates. Contact Center Association of the Philippines (CCAP) Managing Director Rosario Cajucom-Bradbury added  upskilling and re-skilling are essential to ensure workers have the critical skills needed for the future “beyond what artificial intelligence (AI) can do.” Cajucom-Bradbury added that discussions are underway to update the curriculum and boost the employability of Filipino graduates in the outsourcing sphere.

Meanwhile, Bacolod City Mayor Alfredo Abelardo Benitez assured the IT-BPM locators of a stable power supply. The mayor — who also aims to transform Bacolod into a “super city” — underscored the need to “take good care of” the industry and committed the city government’s assistance in finding more ways to expand for more employment. According to data from the Bacolod-Negros Occidental Federation for Information and Communications Technology (BNEFIT), the IT-BPM sector contributes an estimated PHP8.1 billion (US$ 148 million) annual cash infusion to the local economy.

The Philippines is also chasing several partnerships across the world.

Trade Assistant Secretary Allan Gepty said that the government is willing to adhere to the European Union (EU) conventions to guarantee the continuation of benefits from the Generalized System of Preferences Plus (GSP+). The GSP+ mechanism removes tariffs for over 66% of the products listed officially by the EU. However, beneficiary nations must ratify and implement 27 conventions on human rights, good governance, and sustainable development to receive benefits. Gepty said the country is committed to these conventions not only because of GSP+ but also because it is the state’s policy “to protect and respect human rights, protect and preserve the environment, protect labor rights and promote good governance.”

The United Kingdom (UK) also pledged to support Philippine startups and tech companies. UK Trade Commissioner for Asia Pacific Natalie Black said that many British companies are interested in spending more time on the Philippine shores. In a factsheet published in March, the UK and the Philippines saw a significant increase in their total trade in goods and services, including exports and imports, with a recorded jump of 35.5% or £610 million (US$758.4 million). The trade value between the two countries currently stands at £2.3 billion (US$2.9 billion).

Filipino economic managers are set to stage an economic briefing in the United States (U.S.) to convince and attract investors to do business in the Philippines. Department of Finance (DOF) Secretary Benjamin Diokno said the briefing would highlight how the Philippines transformed into one of the “fastest-growing economies in the fastest-growing region in the world.” The finance chief added that they would present the country’s 2022 economic growth at 7.6% on broad-based expansion. Lastly, the Philippine and Moroccan governments want to establish a labor cooperation deal to protect around 4,600 OFWs in the North African state. According to Philippine Ambassador to Morocco Leslie Baja, this solution will be a win-win situation that would help safeguard OFWs while opening the Moroccan market for more Filipino professionals. The deal would be a memorandum of understanding (MOU) and consider “some of the basic aspects of our concerns on migration and labor.”

More Filipinos prefer flexible and remote work is evident across various industries, said workplace consultancy Great Place to Work (GPTW). Speaking to BusinessWorld, GPTW Managing Partner and Principal Consultant Antoniette Mendoza-Talosig said the sentiment is clear through employees’ verbatim comments clamoring for more flexibility at work. Talosig added that it is now vital for employees to have a say in where and when to work. An earlier poll by the online employment platform JobStreet revealed that 46% of Filipino respondents prefer hybrid work, 28% want fully remote, and 26% prefer to work on-site.

Department of Information and Communications Technology (DICT) Undersecretary Anna Mae Yu Lamentillo highlighted the country’s efforts to bridge the gender gap. During the 67th Session of the Commission on the Status of Women (CSW67) in New York, Lamentillo cited several Philippine laws and programs that create an enabling environment where women’s and girls’ rights and safety are promoted and protected. She also affirmed the Philippine government’s commitment to ensure that everyone can fully participate in the digital economy — regardless of gender.

Digital fraud attempts in the Philippines dropped by by 18% despite landing in the top three countries with the highest fraudulent transactions in 2022. According to global credit firm TransUnion, phishing, smishing, third-party seller scams, and identity theft were the most commonly reported fraud schemes experienced by Filipinos last year. Amrita Mitra, chief operating officer at TransUnion Philippines, said businesses must continue to equip themselves with the proper tools to detect fraud at the first warning sign without inhibiting the consumer journey as fraudsters become increasingly sophisticated.

Always be on the lookout!

Thursday, April 13, 2023

NEWS THIS WEEK

12 April 2023

• BPOs to help Manila’s employment growth — Oxford Economics – read article…
• Vena Energy eyes expansion projects in PH – read article…
• PH to attract American investors – read article…
• PH upskilling program needed to address IT-BPM talent crisis – read article…

11 April 2023

• PEZA to help create 1M outsourcing jobs by 2028 – read article…
• Digital fraud attempts in PH down 18% in 2022 – read article…
• SM group to build consolidation hubs for MSMEs – read article…
• Bacolod Mayor promises reliable power supply to IT-BPMs – read article…

10 April 2023

• Sutherland to hire 1K workers in Ilocos Norte – read article…
• PH, Morocco to forge labor accord protecting OFWs – read article…
• PH needs new tax measures to lift revenues, says economist – read article…
• PH inflation slows to 7.6% in March – read article…​

07 April 2023

• Ayala Land expands Vermosa Estate – read article…
• UK ready to assist Philippine startups – read article…
• More Filipinos prefer flexible, remote work — GPTW – read article…
• PH pursues trade perks renewal with EU – read article…

06 April 2023

• DigiCOOP, ADVANCE.AI to boost PH digital, financial inclusion – read article…
• DICT boasts PH efforts in bridging gender gap – read article…
• AIA Philippines launches investment management unit – read article…
• BPOs lessened PH trade deficit impact — ADB – read article…

Read more Inside Outsourcing Newsletters here:

1. The Outsourcing Week in Review: April 11, 2023
2. The Outsourcing Week in Review: April 18, 2023