The Outsourcing Week in Review: Wednesday, February 19, 2020

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Welcome to Inside Outsourcing: The Outsourcing Week in Review

THE WEEK IN REVIEW

The recent forecast by global advisory firm Oxford Economics that the current COVID-19 outbreak will negatively impact the Philippines economic growth rate will not come as a surprise to many. For BPO companies operating in the Philippines, the recent interview with Weng Capistrano, lead consultant for emerging and reemerging infectious diseases at the World Health Organization (WHO), by Outsource Accelerator’s CEO, Derek Gallimore provides invaluable insight into the disease and the best steps BPO managers should take to deal with it. Go to article and podcast here…

Reassuringly, influential pundits are mainly of the view that COVID-19’s economic impact will be short-lived. The IMF has retained its 6.3% growth projection for the Philippine economy in 2020, which will largely be driven by higher fiscal spending by the government, and backed by the recent monetary policy easing. Global credit agency Fitch Ratings has also upgraded its outlook for the Philippines because it expects the country’s economic growth to accelerate next year and the year after.

The most recently recalibrated roadmap for the local IT-Business Process Management (IT-BPM) industry by the Contact Center Association of the Philippines expects revenues to hit between US$29 billion to US$32 billion by 2022. The potential global IT-BPM market is large and still growing. In India last year, for example, the IT-BPM sector grew by 7.7% year-on-year and hit total revenues of US$191bn in the financial year, reports India’s National Association of Software and Services Companies. The global market for medical billing outsourcing is another star performer, and is expected to reach a value of US$16.3 billion by 2025, up from just US$7.6 billion in 2018, according to a Zion Market Research report.

One of the major challenges still facing the BPO industry in the country is in providing enough skilled graduates to meet growing demand, says Rey Untal, president and CEO of the Information Technology and Business Process Association of the Philippines. The BPO industry will require 70,000 to 80,000 of fresh talent annually to reach its 7.5% growth projection. Steps are being taken, however. Philippine-listed conglomerate Phinma Group announced that its school, Southwestern University, has revamped its business school curriculum to better meet the needs of the industry. The Department of Information and Communications Technology is also set to unveil by March this year an additional 20 new digital cities in the country. In the existing hub of Cebu a new call center training facility, The Call Center Training Hub, has now opened in Lapu-Lapu City. Skilled freelancers are also booming globally, with millennial and gen Z workers driving most of the growth, according to a report released by financial services firm Payoneer.

Tax reform uncertainty remains an issue dampening foreign investment. German investors are holding off on their commitments in the Philippines until they get clarification on the proposed tax reform law, says German-Philippine Chamber of Commerce executive director Martin Henkelmann. Moreover, in the troubled Philippine offshore gaming operators sector, the majority of operations failed to pay their taxes last year.  Government coffers were deprived of the staggering amount of about PHP60 billion (US$1.19 billion) as a result, according to a Bureau of Internal Revenue official.

In industry news, global tech and outsourcing firm Infosys announced it will acquire Simplus, one of the fastest-growing Salesforce platinum partners in the US and Australia, for up to US$200 million. Middle office outsourcing provider STP Investment Services said it has acquired investment operations firm Accusource for an undisclosed amount. Air New Zealand, the country’s leading airline, is also reportedly considering moving its call center service to the Philippines from Auckland.

 

Wednesday, February 19, 2020

NEWS THIS WEEK

 

17 February 2020

14 February 2020

13 February 2020

  • Fitch Ratings Upgrades PH Outlook, Expects Growth To Accelerate – read article…
  • Tax Office Says Majority Of POGOs Failed To Pay Tax Dues – read article…
  • Infosys Acquiring Salesforce Partner Simplus For US$200m – read article…

12 February 2020

  • Global Medical Billing Outsourcing Market Could Hit US$16.3bn – read article…
  • Younger Generation Drives Global Freelancing Boom: Report – read article…
  • IT-BPM’s Revenue Forecast To Reach Up To US$32bn By 2022 – read article…

11 February 2020

Read more Inside Outsourcing Newsletters here:

  1. The Outsourcing Week in Review: February 17, 2021
  2. The Outsourcing Week in Review: February 24, 2021

 

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$35,275
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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.