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Welcome to Inside Outsourcing: The Outsourcing Week in Review
THE WEEK IN REVIEW
Over 65% of Philippine business leaders are expecting employees to return to their offices next year in some capacity. A Q3 Metro Manila property market briefing released by real estate firm Colliers said 31% of companies are hopeful for full office operations next year, while 34% expect at least half of their employees to return to the office. The report added that despite the rise of the remote work arrangement, companies “continue to look for office spaces across the country.”
In line with this, office demand in the last quarter of 2021 has surged to 38% (so far) amid the challenging market, said real estate brokerage firm Leechiu Property Consultants (LPC). LPC CEO David Leechiu said that the Information Technology and Business Process Management (IT-BPM) sector will further increase office demand till year-end. In addition, the IT-BPM industry is forecasted to “remain a catalyst of the office segment for as long as outsourcing remains a viable solution for recovering firms in the West.” This is positive news, especially considering that Metro Manila recorded its worst office vacancy performance in Q3 due to the departure of Philippine Offshore Gaming Operators (POGOs).
Speaking of POGOs, the offshore gaming operators will now be subjected to a five per cent tax on their gross gaming revenue – following the release of Republic Act 11590 by the Bureau of Internal Revenue (BIR). Under this Republic Act, POGOs in the country that have failed to register or pay taxes will be penalized. POGO workers will also be deducted a 25% withholding tax on gross income.
The investments from Philippine Economic Zone Authority (PEZA)’s stakeholders have helped increase exports by 20% as of September – exceeding pre-pandemic growth rates. According to Department of Trade and Industry (DTI) Secretary Ramon Lopez, investors are the reason why the country has experienced a seven per cent economic growth in Q3, 12% growth in Q2, and a 4.9% growth in GDP. Due to this, government agencies continue to urge foreign investors to invest in the Philippines. The Board of Investments (BOI), for instance, is encouraging Japanese companies to invest in the Philippines’ medical device manufacturing industry. BOI Manufacturing Industries Service Director Evariste Cagatan said the country is an ideal place to invest in due to its “world-class electronics industry, abundance in intellectual talent, ready access to key markets, and ultra-cost efficiencies.”
House Ways and Means Committee Chairperson Joey Salceda is appealing for DTI to complete its Strategic Investment Priorities Plan (SIPP) before March 2022. SIPP is a list of sectors that are eligible for incentives under the newly implemented Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act. Salceda said that finishing this list will end “uncertainty,” and give foreign companies a sense of the benefits that they can get upon opening its operations in the country.
It looks like the Philippines is on its way to economic recovery. The country jumped 46 notches higher in its ranking in Nikkei Asia’s International COVID-19 Recovery Index. From 103rd place last October, the country is now tied with Norway, Malaysia, and Tajijistan at the 57th spot out of 120 countries. In a statement, Nikkei Asia said that this improvement is due to a notable increase in the country’s “infection management scores.” Additionally, research consultant GlobalSource Partners has increased its Philippine Gross Domestic Product (GDP) forecast to 5.5% for 2022. While this is optimistic, GlobalSource analysts said that the pre-pandemic level of recovery will only happen by late 2022. If that’s not good news enough, the entire country is now under Alert Level 2 – the second least restrictive quarantine restriction. Let’s hope that this continues on so the economy can really get started, uninterrupted! (Go away Omicron).
The BPO labor union BIEN Pilipinas and the House Committee on Labor and Employment are encouraging the government to suspend the “confusing” resolutions that require on-site workers to be fully vaccinated against COVID-19. While the group isn’t against vaccination, BIEN Pilipinas President Mylene Cabalona said that the Inter-Agency Task Force for the Management of Emerging Infectious Diseases (IATF) should consider the impacts of the resolutions on workers who “need to earn a living.” Cabalona also urges outsourcing firms to shoulder the expenses for RT-PCR tests as everyone can be carriers, “vaccinated or not.”
In other news, the Philippines’ food sector is a big hit in the recent Chinese International Import Expo (CIIE) as it earned over US$597.34 million in onsite export sales. This records a two-figure increase in export sales compared to last year. The Department of Trade and Industry’s (DTI) Undersecretary for Trade Promotions Group (TPG) Abdulgani Macatoman said that the success of Filipino goods to the Chinese audience “[shows] the continuously growing trade relationship” between the two countries. The Center for International Trade Expositions and Missions (CITEM) also launched the FOODPhilippines China Portal to serve as an information platform for potential buyers in the event. CITEM Executive Director Pauline Suaco-Juan assured the public that this is not the end of their promotion for Philippine exports. They plan to further expand the country’s engagement and reach buyers and food enthusiasts around the world who want to know more about various Filipino food and culture.
Let’s introduce the world to chicken adobo!
Thursday, December 9, 2021
NEWS THIS WEEK
08 December 2021
- BOI invites Japanese firms to invest in PH – read article…
- DTI urged to finish SIPP by next March – read article…
- 32% of Filipino internet users owns NFTs, tops survey with 20 countries – read article..
- ‘No-vax-no-work’ policy should be suspended – BPO union – read article..
07 December 2021
- PH Office demand in Q4 rose by 38% – read article…
- PH leaps to 57th place in Nikkei’s COVID-19 recovery index – read article…
- PH GDP to increase by 5.5% – GlobalSource – read article…
- Still no confirmed Omicron cases in PH – DOH – read article…
06 December 2021
- PH employers expect more on-site operations by 2022 – read article…
- Entire PH now under Alert Level 2 – read article…
- 5% POGO tax to be implemented immediately – read article..
- 32% of German firms in ‘good situation’ in the PH – read article..
03 December 2021
- PH, India economy at risk amid new COVID-19 variant – read article…
- IATF implements new rules for non-red list countries starting December 3 – read article…
- Most Filipinos are concerned with the country’s economy – Stratbase – read article…
- Meralco, PEZA signs eCFEI partnership – read article…
02 December 2021
- Ayala sells HCX shares to ASBI – read article…
- PEZA stakeholders’ investments led to 20% growth in exports – DTI – read article…
- Metro Manila’s office vacancy worsened in Q3 – read article…
- S&P raises PH GDP outlook to 5%, warns threat of possible ‘Omicron’ surge – read article…
