The Outsourcing Week in Review: Thursday, October 14, 2021

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Welcome to Inside Outsourcing: The Outsourcing Week in Review

THE WEEK IN REVIEW

The IT-BPO industry in the Philippines will play an important role in reviving the economy post-pandemic. Early projections from the IT and Business Process Association of the Philippines (IBPAP) are saying that the sector will grow between 3.2 to 5.5% in 2022 with a total employee count of 1.37 to 1.43 million people. In line with this, the Department of Trade and Industry (DTI) vows to continue its support by making the sector a priority in their “Make It Happen in the Philippines” campaign. DTI Secretary Ramon Lopez said that the strength and resiliency of the BPO industry helped maintain the Philippines as the destination of choice and outsourcing capital of the world.

New investments are entering the Philippine market as the Foreign Direct Investment (FDI) net inflows recorded double-digit growth last July. The Bangko Sentral ng Pilipinas (BSP) reported that the 2021 FDI net inflow grew by 52% to US$1.3 billion compared to last year’s US$831 million. The majority of these investments came from Japan, the United States, and Hong Kong, and were directed mostly to the manufacturing, real estate, and the financial and insurance sectors in the country.

It has been argued that more foreign investments will be made into the country if the quarantine period for travelers is reduced from the regular 14 days. Trade chief Ramon Lopez stated that this move would not only benefit the investment sector but also the local travel industry. It will also free up quarantine facilities and lessen the total cost for individuals visiting the country. As of last Friday, October 8, the Inter-Agency Task Force for the Management of Emerging Infectious Diseases (IATF-EID) has shortened the quarantine requirement for fully-vaccinated individuals to seven days provided that they remain asymptomatic during quarantine.

However, the Philippines is still woefully lagging behind its Asia-Pacific neighbors when it comes to Foreign Direct Investment (FDI).  It is ranked 13th out of 14 countries according to the Oxford Economics’ FDI attractiveness scorecard. The global think tank gave the Philippines negative scores on infrastructure and logistics; political and business climate; and market size and potential, while the export structure and labor dynamics earned positive remarks due to its ongoing urbanization and developing workforce. Oxford Economics said that the country’s local economy is expected to struggle from the effects of the pandemic until 2025.

At least creativity seems to be a big strength for Filipinos! In a recent Original Content Forum, SIKAP-Creative Content Creators Association of the Philippines president Magoo del Mundo said that the country has the potential to become a creative production hub in Asia because of its rich culture and local folklore. Animation Vertigo Asia Founder and CEO Marla Rausch agreed with this statement and noted that the country has “a lot of unique stories” to showcase for the global audience. Where is the Philippines’ Squid Game?

To assist content creators, DTI Undersecretary Rafaelita Aldaba said that it is now the time to pass a creative industries law in the country. According to the latest data from the DTI, the pandemic caused the decline of creative exports. Last year, 61% of arts and entertainment companies halted their operations, with 21% of these firms shut down permanently. The proposed Philippine Creative Industries Development Act will establish the Philippine Creative Industry Development Council which will help promote creative content development and protect local creators from intellectual property infringement.

In COVID news, the Philippines has been placed at the bottom of Nikkei Asia’s COVID-19 Recovery Index. It ranked 121st – out of 121 countries which means it is the furthest from overcoming the pandemic. Nikkei Asia said that even though the daily new cases in the country have started to drop, only less than 30% of the population are fully vaccinated, a figure that is “low even among ASEAN countries.” As of October 11, there are already 23 million Filipinos who have completed their COVID-19 vaccinations. Malacañang reported that the country has now inoculated 30% of the 70 million targets needed for her immunity. In May this year, Inside Outsourcing reported the Department of Health (DoH) declaring that NCR and nearby areas would achieve herd immunity by November – guess that won’t happen. Despite this, Presidential spokesperson Harry Roque announced that facility-based quarantine will not be required for fully-vaccinated Filipino and foreign travelers starting today, October 14, as long as they’re coming from “green” or low-risk countries. As of October 8, the list of green countries included Mainland China, Taiwan, New Zealand, and Hungary.

The newly implemented tax on Philippine Offshore Gaming Operators (POGOs) may trigger the POGO exodus in the Philippines, pushing the overall office vacancy rates to an almost two-decade high. According to commercial real estate services firms KMC Savills and Cushman & Wakefield, the new tax requirement may drive POGOs away from the country and move to other more affordable destinations. KMC Savills’ managing director Michael McCullough said that this issue may lead to slower recovery for the office sector.

Due to the surge in online transactions during the pandemic, digital fraud and consumer complaints in the Philippines have jumped 600% since 2019. According to DTI Undersecretary for Consumer Protection Group Ruth Castelo, there have been 7,800 consumer complaints recorded as of August 31 – mainly citing deceptive practices, poor customer service, and product defects. To ensure customer protection, the DTI is pushing for the Internet Transaction Act to solve the rising e-commerce and online retailing problems in the country. Strategic advisory firm YCP Solidiance has also said that the government needs to develop a regulatory framework that would ensure the safety and security of online transactions in the country. This would ensure that the transactions in the digital marketplace are secure and not a scam.

In other news, journalist and Rappler CEO Maria Ressa gave the Philippines its first Nobel Peace Prize. Ressa won the Nobel Prize alongside Russian journalist Dmitry Muratov, head of independent newspaper Novaya Gazeta. The Norwegian Nobel Committee awarded Ressa and Muratov the Nobel Prize for their efforts to “safeguard freedom of expression.” In an interview, Ressa stated that her Nobel Peace Prize was for “all journalists around the world.”

Congratulations Maria Ressa, and thank you for your courage!

 

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Thursday, October 14, 2021

NEWS THIS WEEK

 

13 October 2021

  • Framework needed to boost PH’s e-Commerce industry – read article…
  • Consumer complaints increased by 600% due to surge in online transactions – read article…
  • New POGO tax may drive office vacancy rates to near two-decade high – read article…
  • Data access is now a right and privilege – DICT – read article…

12 October 2021

11 October 2021

08 October 2021

07 October 2021

  • PH on 121st spot in Nikkei’s COVID-19 Recovery Index – read article…
  • NGDC, DTC to be built in the PH – read article…
  • Digitalization emphasized the need for a creative industries law – DTI – read article…
  • 45% of PH firms said that skill shortage is affecting their zero trust initiative – read article…

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