The Outsourcing Week in Review: Thursday, September 9, 2021

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Welcome to Inside Outsourcing: The Outsourcing Week in Review

THE WEEK IN REVIEW

Information Technology (IT) and Business Process Outsourcing (BPO) companies led the office demand since the pandemic across the Philippines and are taking up 40% of the demand of new leases. According to real estate firm Megaworld, BPO companies opted to stay and held on to their spaces, “which clearly indicates the strength and resilience of the office market within our pioneering townships.”

In contrast, according to a report by commercial real estate firm, KMC Savills, Metro Manila’s office vacancy hit another record high (13%) in the first half of the year. Ortigas Center reported the highest vacancy rate (19.3%), followed by Quezon City (18.3%) and Alabang (17.1%). Due to this, office landlords are forced to cut up to 15 to 20% in rental rents to keep their corporate tenants. In an interview, KMC Savills managing director Michael McCullough stated that the supply-demand imbalance kept the “leasing conditions in the occupiers’ favor.”

Tokyo-based think tank Asian Development Bank Institute (ADBI) said that the Philippines needs to implement a policy framework to help the creative economy recover from the pandemic. ADBI noted that the creative economy accounts for 3% of total GDP and reproduces around $3.2 billion in services such as animation and digital marketing, but they argue that there is no creative economy center or government agency in the country focused solely on this. In line with this, the Information Technology and Business Process Association of the Philippines (IBPAP) acknowledges the need to continue upskilling thousands of outsourcing employees. IBPAP chair Benedict Hernandez noted that the industry will need additional funding to continue the agency’s upskilling programs as they work with the Department of Information and Communications Technology (DICT) to train BPO employees.

Despite the setbacks, the country continues to attract global investors. At least two hyperscale companies from the United States and China are expected to enter the Philippines this year. In an online forum, Department of Trade and Industry (DTI) Undersecretary and Board of Investments (BOI) Managing Head Ceferino Rodolfo said they are currently having advanced discussions with these companies, with DTI Secretary Ramon Lopez adding that the Philippines’ digital savviness made the country a prime location for hyperscaler investors.

Speaking of hyperscaling… Outsource Accelerator’s Source Partner platform saw a dramatic increase in the number and quality of inquiries for the month of August. The Source Partner program generated a total of 770 inbound inquiries (up 34%) of which, 439 were outsourcing quotation requests (up 35%), representing an estimated 2,265 full-time staff with an estimated value of $67,950,000. Outsource Accelerator is also about to launch a new website and add a further 2,500 BPOs to their global BPO directory.

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>> Read the full August Performance report here or visit SP analytics dashboard here.

Metro Manila was about to be placed under the less strict General Community Quarantine (GCQ) from September 8 to 30 – unless extended – said Presidential spokesperson Harry Roque. However, almost literally at the 11th hour, with rising COVID cases, the decision was reversed and Metro Manila was kept under the more strict MECQ.

Along with uncertainty, the government announced that granular lockdowns will be piloted in several areas in the region during the quarantine period. Department of Health (DOH) Undersecretary Maria Rosario Vergeire said that implementing granular lockdowns can help the government improve its active case finding, mass testing, and isolation of infected individuals. Due to these “indefinite mobility restrictions,” market research firm GlobalSource Partners downgraded its 2021 Gross Domestic Product (GDP) growth forecast for the Philippines to 3.5%. On the other hand, Japan Credit Rating Agency (JCRA) affirmed its A-level credit rating on the Philippines, citing the measures implemented by the government to mitigate the impact of the pandemic on the health sector and the economy.

The Philippines is set to welcome foreign investors and long-term employees. The national government lifted the travel ban in 10 countries last Monday, September 6. During a press conference, Roque stated that travelers coming from India, Pakistan, Bangladesh, Sri Lanka, Nepal, United Arab Emirates, Oman, Thailand, Malaysia, and Indonesia will be welcomed to the country. In addition, “essential” foreigners workers planning for long-term employment in the Philippines are now allowed to apply for work permits or certificates even when they are still abroad. This policy was issued with the hopes that their entry will help with the country’s post-pandemic economic recovery.

Welcome back! Now, let’s get this economy moving!

 

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Thursday, September 9, 2021

NEWS THIS WEEK

 

8 September 2021

  • Palace backtracks, MM under MECQ until Sept. 15 – read article…
  • Bacolod CoVaC continues its on-site vaccination in BPO firms – read article…
  • PH trade performance should’ve improved in July – SCB – read article…

7 September 2021

6 September 2021

3 September 2021

2 September 2021

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