The Outsourcing Week in Review: Wednesday, May 13, 2020

Welcome to Inside Outsourcing: The Outsourcing Week in Review

THE WEEK IN REVIEW

After much nervous speculation, the Philippine Presidential Spokesperson Harry Roque announced on Tuesday, May 12, that Metro Manila, Laguna province, and Cebu City will be placed under an extended modified Enhanced Community Quarantine (ECQ) until May 31.

These “high risk” communities, as identified by the Inter-Agency Task Force on Emerging Infectious Diseases (IATF), will remain on lockdown allowing residents to leave their homes only for essential provisions and emergencies. Under modified ECQ, select industries will be allowed to reopen in a limited capacity – however, Roque said that the government is still finalizing which industries will be allowed to resume operations.

The Philippine economy is the latest official victim of the COVID-19 pandemic as recent figures reveal that it shrank for the first time in 21 years. The Philippine Statistics Authority (PSA) reported that the country’s gross domestic product (GDP) contracted 0.2% year-on-year in the first quarter. The hardy Philippine economy last went into negative territory in 1998, when the Asian financial crisis wiped three per cent from GDP. Unfortunately, it is the second quarter figures that will show the true severity of this pandemic.

The outsourcing industry, however, is seeing some positivity. According to the Monster Employment Index Philippines, the IT Business Process Outsourcing (IT-BPO) enabled services led the 15 per cent annual growth in online recruitment among industry sectors in February 2020. During COVID, the local logistics and e-commerce industries are seeking the services of the BPO industry to support their spike in activity. With people stuck in their homes and buying online, the demand for customer service support has surged. Qualfon, in supporting the customer care division of a grocery delivery service, has added 2000 additional customer service roles to its Cebu location, which includes advancement opportunities for its current employees.

Awards and award ceremonies have continued to flow, offering some respite from the bleak pandemic. ManpowerGroup’s Talent Solutions was named as a global leader in Recruitment Process Outsourcing (RPO) in the Everest Group PEAK Matrix® Assessment 2020. In addition, Personiv was awarded one of the Best Workplaces of 2020, by Inc. Magazine.

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Cognizant also welcomed positive news as it exceeded its earning estimates for the first quarter of 2020, at $0.96 per share. However, Sykes missed the estimate of $0.50 per share by $0.06. No doubt the second quarter results will see considerably more red ink.

The pandemic has had a big impact on the Philippine commercial property sector, however, research presented by real estate consultancy company Lobien Realty Group (LRG) claims that the sector could still finish strong with the help of the BPO industry, as well as the Philippine Offshore Gaming Operators (POGOs). LRG’s research showed that office occupancy could be supported by an increase in demand of global companies’ outsourcing their business functions. This claim is shared by an NTT survey, which revealed that businesses are expected to outsource more work over the next 18 months.

A recent survey by Shared Service & Outsourcing Network (SSON) showed that 75 percent of Philippine-based centers are looking to expand their scope of services over the next 12 months. Fifty per cent will be keeping their efforts on-shore, while others are looking to expand their services in India (23%) or Malaysia (15%).  SSON was not clear if the response collection was pre- or post-COVID.

On May 5, Department of Trade and Industry (DTI) Secretary Ramon Lopez signed the Memorandum Circular No. 20-22, labelling business establishments in four categories according to their activities. Category 1 lists industries in full operational capacity during the ECQ and general community quarantine (GCQ). This section includes essential sectors like agriculture and hospitals. Category 2 allows enterprises to operate 50 per cent to full capacity, and are only allowed to function during GCQ. Category 3 industries require 50 per cent work on-site arrangement, work from home, or other alternative arrangements. Banks and BPOs fall under this category. Meanwhile, businesses categorized under Category 4 are prohibited from operating. It includes firms classified under amusement and leisure establishments.

Types of private and public construction projects are now also allowed to resume even in areas under ECQ. Private construction related to food production, BPO and other essential industries can now operate. Public construction projects for isolation facilities and other risk and rehabilitation programs are also permitted. In line with this, the outsourcing and construction industries seek government support as they gradually ease into the ‘new normal’.

Meanwhile, the debate about POGOs being under the BPO umbrella is far from over. After the Information Technology and Business Process Association of the Philippines (IBPAP) strongly disagreed and disassociated itself from POGOs, Presidential spokesperson Harry Roque again argued that the offshore gaming operators are considered BPOs because they render services for activities outside the Philippines. Roque stated that the government is “following a definition of POGOs that are consistent with the guidelines, especially of those granting tax incentive.”

In response, Contact Center Association of the Philippines (CCAP) President Jojo Uligan joined the dispute, affirming that the BPO industry is “very different” from POGOs. Uligan adds that the BPO industry “generates a lot of jobs for Filipinos and are leveraging the talent that we have in the Philippines.” He stated that BPOs “are not involved in… gambling or betting.”

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In addition, a group of 31 congressmen who have filed a bill seeking to outlaw the offshore gaming operators called the POGO sector a “social menace and source of unimaginable corruption”. The Anti-POGO Act aims to ban POGO service providers, the creation of its hubs and gaming laboratories, as well as possession of gaming paraphernalia. The licenses of all foreign-based operators, local gaming agents, POGOs and service operators will also be revoked.

On May 6, authorities busted an illegal POGO operating from a Makati City condominium. They arrested 63 Chinese and 13 Filipinos, and seized computer equipment and 414 mobile phones. The alleged owner is curiously called Xiao Bao. Xiao Bao remains at large.

 

Wednesday, May 13, 2020

NEWS THIS WEEK

 

12 May 2020

  • NCR and other ‘high-risk’ cities to be placed under modified ECQ until May 31 – read article…

11 May 2020

8 May 2020

  • BPOs face uncertain post-pandemic future as companies consider on-shoring businesses – read article…
  • CCAP seeks to review BPO growth projections – read article…
  • BPOs: We are ‘very different’ from POGOs – read article…
  • Majority of Philippine shared services plan for expansion, says survey – read article…
  • More businesses allowed to resume in Davao City – read article…
  • Contact center industry sees recovery in second sem – read article…

7 May 2020

  • PH economy shrinks for the first time in more than two decades – read article…
  • Businesses expected to outsource more work due to COVID-19 pandemic, says survey – read article…
  • Call center staff risks COVID-19 as Japan firms resist telecommuting – read article…
  • Logistics and e-commerce raise outsourcing demands – read article…
  • Outsourcing leader Personiv recognized as one of Inc.’s Best Workplaces of 2020 – read article…

6 May 2020

  • IT-BPO industry leads 15% annual growth in online hiring – read article…
  • DTI issues list of allowed sectors to operate during ECQ and GCQ – read article…
  • Firm provides up to 2,000 additional jobs in Cebu amid COVID-19 – read article…

5 May 2020

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