The Outsourcing Week in Review: Wednesday, April 29, 2020

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Welcome to Inside Outsourcing: The Outsourcing Week in Review

THE WEEK IN REVIEW

BPO firms have spent the week adjusting to the new normal of working from home. According to Rey Untal, president of the IT-Business Process Association of the Philippines (IBPAP) the impact of the restructuring is that BPOs are now operating at only 66.5% capacity. The government should craft measures to help get BPOs “back on the map”, suggests Untal. Importantly, the decline is not due primarily to a collapse in customer demand, but rather the inability of work-from-home (WFH) arrangements to meet security arrangements necessary in financial and data-driven outsourcing segments. WFH set-ups are too insecure on data security for many major multinational banks, insurers, hospitals, retailers and airlines. This is driving some firms to consider reshoring of operations and the faster roll-out of AI-powered alternatives.

The ongoing uncertainty of the proposed Corporate Income Tax and Incentives Reform Act (CITIRA) has also adversely affected the investment pledges approved by the Philippine Economic Zone Authority (PEZA). Investment dropped to PHP16.4 billion (US$324 million) in the first quarter of 2020, down 27% year-on-year. Notwithstanding, the tax reforms in the Philippines will continue to be implemented, says the new National Economic and Development Authority chief Karl Kendrick Chua.

But some BPO firms are still gearing up for expansion, according to Davao City Chamber of Commerce and Industry president John Carlo Tria. Many of these companies are considering setting up centres outside of Metro Manila, he says. In Metro Manila, Geneva-based cigarette giant Japan Tobacco International said it is still opening a regional business service hub with plans to hire at least 350 people in the next three years. Moreover, online hiring demand in the Philippines did rise year-on-year in March at 10% according to the latest Monster Employment Index, albeit at a much slower pace than in the two previous months.

Overseas, Indian global outsourcing giant Infosys Ltd has seen a boost in demand for its IT services despite the Covid-19 pandemic, although company revenues are projected to be impacted in the coming quarters, according to analysts. On another positive note, the Philippines will be among the few countries that will survive the global coronavirus pandemic with modest economic growth this year of about 1%, according to the Institute of International Finance, a Washington-based global financial industry association.

What is also emerging is that WFH arrangements and some social distancing measures are likely to be in place for some time. Philippine senator Joel Villanueva wants the country’s labour department to order companies to conduct Covid-19 testing on employees before they are allowed to resume operations. And the move to WFH has only mitigated the collapse in employment as vast swathes of the economy have closed down.

To help ease the pain, the government has included a PHP110 billion (US$2.2 billion) wage subsidy program for workers of private companies affected by the Covid-19 pandemic in its PHP613 billion stimulus package that has been put forward by lawmakers. But the Philippine BPO Industry Employees Network has called on the government to provide further financial assistance to outsourcing workers affected by the Covid-19 pandemic. Many BPO companies are also chipping in directly to help ease the distress that the current mass unemployment is bringing. Optum Global Solutions Philippines, for example, has donated over PHP25 million (US$500,000) to Caritas Manila for the purchase of food and hygiene kits. The donation will go to residents of low-income communities in the country and to frontline workers.

 

Wednesday, April 29, 2020

NEWS THIS WEEK

 

27 April 2020

  • BPO Firms Seek State Support In Adjusting To New Normal – read article…
  • Senator Pushes For Covid-19 Testing Of Returning Workers – read article…
  • BPO Companies Looking To Expand Outside Metro Manila – read article…

24 April 2020

  • BPO Group Calls For Additional Aid For Displaced Workers – read article…
  • Proposed Subsidy of PHP110bn For Covid-19 Affected Workers – read article…
  • CITIRA Uncertainty Affects PEZA Investment Pledges– read article…

23 April 2020

22 April 2020

  • Lockdowns In Philippines, India Prompt Firms To Reshore Jobs – read article…
  • IT-BPM Firms In India Extend Work-From-Home Setups – read article…
  • Infosys Revenues Will See Negative Covid-19 Impact, Says Analyst – read article…

21 April 2020

  • Cigarette Giant JTI To Open Regional Service Hub In Manila – read article…
  • Philippines To Survive Pandemic With 1% Growth – read article…
  • WFH Setup Becomes Challenge For Companies Across The Globe – read article…

Read more Inside Outsourcing Newsletters here:

  1. The Outsourcing Week in Review: April 22, 2020
  2. The Outsourcing Week in Review: May 6, 2020

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