The Outsourcing Week in Review: Thursday, September 1, 2022

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Welcome to Inside Outsourcing: The Outsourcing Week in Review

THE WEEK IN REVIEW

The Philippine government plan to use the BPO industry to leverage the country’s participation in technology, media, and telecommunications global value chain. According to the Department of Trade and Industry (DTI) chief Alfredo Pascual, the BPO industry is among the major sectors that are seen to accelerate the Philippines’ post-pandemic economic recovery. The DTI is currently mapping its strategic priorities that would lead the country to economic rehabilitation.

However, outsourcing firm Accenture Philippines believe the current education crisis could result in the country being left behind in the highly competitive IT-BPO market. Accenture Managing Director Manolito Tayag said they struggle to find new hires as not all fresh grads can pass the industry’s requirements. He stated that bridging the gap between the sector’s requirements and what is being learned by students is important to address this dilemma. Investing in learning, training, and upskilling seminars will also help the industry maintain its glory in the global market.

In work-from-home updates, the DTI is considering granting the Board of Investments (BOI) jurisdiction over incentives registration of BPO firms in the country. During the 43rd National Conference of Employers, Pascual said that the pandemic had shown that the work-from-home (WFH) arrangement is a viable alternative to the industry. Thus, they are setting specific solutions to allow WFH expansion without consequences on the company’s incentives. At the same time, the Department of Finance (DOF) ordered local government units (LGUs) to stop collecting taxes from BPO employees working at their homes. Finance Undersecretary Antonette Tionko said this is a wrong interpretation of tax laws as LGUs should not ask remote BPO workers to pay taxes. The DOF stated that they would come out with a local finance circular through its Bureau of Local Government Finance (BLGF), which will clarify to LGUs the taxation of BPOs with a work-from-home set-up.

Meanwhile, the Philippine Economic Zone Authority (PEZA) is extending its WFH bargain with BPOs and IT-BPM firms until March 2023. IT & Business Process Association of the Philippines (IBPAP) President and CEO Jack Madrid shared the news amid the ​​long-running remote work quandary of outsourcing firms located within economic zones. Madrid added that ongoing talks with different government sectors and key leaders are beginning to point towards the direction of hybrid work arrangements for the sector and other industries in the country. However, PEZA OIC and Deputy General Tereso Panga clarified that the PEZA board still has the final say over the decision. Panga stated that they only approved the calls for extension in principle, and they still need to revise their memo and include inputs from the board. But, he assured their members that they are pushing for the final approval of the extension before the earlier resolution expires on September 12.

More on remote working, the DTI and Department of Labor and Employment (DOLE) are jointly-reviewing the implementing rules and regulations (IRR) of the current Telecommuting Act. DOLE Secretary Bienvenido Laguesma said they are finalizing the tweaked IRR to allow the WFH arrangement in the Philippines permanently. He reiterated that employees have a lot that can be done at home as long as their companies can provide their clients’ services. The two departments are also aiming to release their IRRs before September 12.

In other news, Iloilo continues to be one of the most sought-after outsourcing destinations in the Philippines. According to Iloilo Federation for Information Technology (IFIT) Executive Director Joeven Tansi, five companies are currently waiting to invest in the province, bringing in about 5,000 new jobs for locals. Tansi added that aside from Iloilo City, some firms have relocated to the adjacent municipality of Pavia and other towns. Mayor Jerry Treñas said that with more projects, Iloilo could be the third biggest BPO site in the Philippines by 2025. To continue the industry’s growth, the Contact Center Association of the Philippines (CCAP) urges the national government to improve the ease of doing business for the BPO sector. In a statement, the group said that doing this will allow the local BPO sector to hit its export revenue and job generation targets. CCAP Chairman Louie Benedict Hernandez collectively supporting the industry and capitalizing on its global demand can mean “an additional 1.1 million more high-value, high-paying jobs” across the country in the next six years.

Meanwhile, PEZA has resumed accepting applications for IT centers inside Metro Manila following the removal of a moratorium against new economic zones in the capital city. PEZA’s Panga that the Corporate Recovery and Tax Incentives for Enterprises Act (CREATE Act) superseded the ban stated under Administrative Order (AO) 18. The OIC added that reopening new IT center applications for Metro Manila would mean a big investment inflow to the country. However, the agency emphasized that they will still remind the Office of the President to address AO 18 and issue a supporting order to align with the prevailing law.

About 149 million new jobs in computing are projected to be needed globally by 2025, said Philippine Software Industry Association (PSIA). In data recently released by the group, PSIA elaborated that 98 million of these will be software developers. The industry body stated that the COVID-induced acceleration of digital transformation. PSIA President Jonathan Defensor de Luzuriaga added that the Philippines would need more people to be educated in the newer things that are being applied in the software development and IT industry “so that we can continue this growth pattern.”

Strong internet connectivity is coming as the top 2 telecommunication companies in the Philippines have accelerated the deployment of 5th Generation (5G) wireless technology across the country. During H1, Globe Telecom built 933 sites with its 5G network outdoor coverage reached 97% of the National Capital Region (NCR) and 86% of key cities in Visayas and Mindanao. Globe SVP and Head of Network Planning and Engineering Joel Agustin said that the drive to build more and faster is fueled by their desire “to deliver more improvements in our customer service experience that are consistent and reliable.” Concurrently, Smart Communications rolled out 77,100 total base stations throughout the country, including 7,300 5G base stations.

Telco provider PLDT is also amping up its data center capacity to 3,000 racks as demand increases. According to ePLDT President Victor Genuino, the plans to “bulk up” three of its existing data centers in two phases, which will begin by the end of this year and are expected to be completed by the year-end of 2023.  PLDT and Smart President and CEO Alfredo Panlilio added that their expansion plans “support the reinforced push of the government, particularly the [DTI], for hyperscaler data centers as the second coming of the BPO industry.”

In conjunction with internet and data, users are reminded to be careful about opening anything on their phones. Cybersecurity company Kaspersky warned that cybercriminals are now targeting Android and iOS devices using a banking Trojan called Anubis Trojan. Kaspersky Asia Pacific (APAC) Senior Malware Researcher Suguru Ishimaru explained that “Anubis is known for compromising hundreds of bank customers per campaign,” and cybercriminals have started implementing ransom functionalities to their attacks. The firm added that in the Philippines — where 79 million are smartphone users — both Anubis and another malware Roaming Mantis are found to be active, though it has not been affected as much as their peers in the region.

Banking in the Philippines will be easier and more accessible with MDI Novare’s SIEVE AML. According to the tech provider, the SIEVE AML transaction monitoring system will help boost the efforts of rural banks against money laundering. Built on a sophisticated and high-performance platform, it leverages data integration, analytics, alert/case management, and Anti-Money Laundering Council (AMLC) regulatory reporting. It also includes various features such as automated transaction monitoring, intelligent network analysis, a 360-degree understanding of customers and their transactions, and a simple, highly configurable business user/investigator-centric interface.

Vigilance is key!

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Thursday, September 1, 2022

NEWS THIS WEEK

 

31 August 2022

30 August 2022

  • Gov’t needs to improve ease of doing business for BPOs — CCAP – read article…
  • PEZA board will have the final say on the WFH extension – read article…
  • The next decade will be “notable” to the BPO segment, says DTI – read article…
  • MDI Novare launches SIEVE AML to help rural banks in PH – read article…

26  August 2022

25 August 2022

  • PLDT amps up data center’ capacity amid increased demand – read article…
  • PEZA extends WFH deal with BPOs, IT-BPM until March 2023 – read article…
  • DTI mulling over shifting incentives regulation from PEZA to BOI – read article…
  • DOF orders LGUs to stop imposing taxes on WFH BPO employees – read article…

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$52,088
$56,600
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$35,275
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$39,066
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Philippines $7,221
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About Derek Gallimore

Derek Gallimore has been in business for 20 years, outsourcing for over eight years, and has been living in Manila (the heart of global outsourcing) since 2014. Derek is the founder and CEO of Outsource Accelerator, and is regarded as a leading expert on all things outsourcing.