The Outsourcing Week in Review: Thursday, July 15, 2021

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Welcome to Inside Outsourcing: The Outsourcing Week in Review

THE WEEK IN REVIEW

The Philippine Business Process Outsourcing (BPO) industry’s office demand grew 160% this year as the sector appears to resume its pre-pandemic growth trajectory, according to a study conducted by real estate services company Leechiu Property Consultants (LPC). Despite the sector’s “relatively quiet” 2020, LPC CEO David Leechiu noted that “BPOs are back,” adding that the “same fundamentals that attracted BPOs to the Philippines during the financial crisis of 2008 are once again working for us.”

At the same media briefing, LPC reported that the BPO sector’s friendly foes – the Philippine Offshore Gaming Operators (POGOs) are eyeing up a “revenge comeback” as they are starting to actively seek office spaces for the first time since March 2020. LPC said they’re expecting the resurgence of the POGO sector since its comeback is supported by Senate Bill 2232, the reopening of Philippine borders, and the passage of the CREATE (Corporate Recovery and Tax Incentives for Enterprises) Law.

The country is now seeing the positive impacts of the CREATE Law, as it has been credited with the recent rise of the Foreign Direct Investments (FDIs) in the Philippines since April 2021. According to Rizal Commercial Banking Corporation (RCBC) chief economist Michael Ricafort, the law provided “greater certainty on investment incentives,” and made foreign investors “become more decisive and finally bring in more FDIs into the country.” On the other hand, according to Philippine Economic Zone Authority (PEZA) Deputy Director General for Policy and Planning Tereso Panga, the CREATE law is making accredited office buildings “more attractive for IT-BPO industry investors.

The Outsource Accelerator (OA) platform generated 629 inbound inquiries for the Philippine outsourcing sector for the month of June. These inquiries represent an estimated 1,935 full-time staff worth $58.05 million! Last May, the OA platform experienced a dip in lead quality, but this has been quickly course-correct back to better quality engagements in June. In the coming weeks, OA will be launching a new website, new landing pages, and new visitor engagement funnels, so watch out for that!

>>> FULL REPORT: Read the June Outsourcing Performance report

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As part of the “Digital Cities 2025” program, nine out of 31 cities in the country have launched their five-year roadmaps last week. These areas are projected to generate around P70 billion in investments from BPO firms in the next few years. Further, in Cebu, the province’s outsourcing sector has proven itself to be resilient amid the pandemic, said Wipro Philippines country head Aseem Roy. Roy noted that they are “fairly confident” that Cebu has the capability to outshine the top outsourcing hubs in the world. Inside Outsourcing has previously reported that Cebu is looking to invest in innovation and technology to regain an even faster growth.

American credit rating agency Fitch Ratings revised its outlook rating for the Philippines from “stable” to “negative.” However, it maintained its “BBB” credit rating. In a statement, Fitch said that the revised rating is an impact of the country’s prolonged pandemic, as it weakened the country’s fiscal position in absolute terms compared to its peer medians. As a response, a statement from the Bangko Sentral ng Pilipinas (BSP) and other economic managers assured that the country is “set for an economic rebound, with medium-term growth prospects on solid footing.”

Despite the pandemic, more and more businesses are looking at the Philippines as an attractive investment destination. France-based shipbuilding firm OCEA expressed its interest in constructing a P1.5 billion (approximately US$ 30 million) shipyard in the Philippines, which may generate around 600 jobs for Filipinos. During the 9th Philippine-France Joint Economic Committee (JEC) meeting, French Minister of Foreign Trade and Economic Attractiveness Franck Riester presented three letters of intent confirming financial support of a training boat contract for the Philippine Merchant Marine Academy and a possible maritime expert proposal.

In addition, Coca-Cola’s Philippine bottling arm, Coca-Cola Beverages Philippines Inc. (CCBPI) launched its first mega hub in the country last June 28. The hub will give CCBPI an edge to synergize its transport movements to generate cost savings. This site is a new milestone, considering the firm’s “109-year journey with Filipinos.”

In other news, World Bank Philippines issued an apology to the Philippine government and the Department of Education (DepEd) for the “inadvertently”-released report on the poor learning outcomes of Filipino students. This apology came after DepEd Secretary Leonor Briones’ interview where she noted how the World Bank “insulted” and “shamed” the country after releasing an outdated report.

The DepEd, as well as President Rodrigo Duterte, has accepted the World Bank’s apology. Some are claiming that the World Bank has “nothing to apologize for.” How about you? What are your thoughts on this issue?

 

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Thursday, July 15, 2021

NEWS THIS WEEK

 

14 July 2021

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