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Welcome to Inside Outsourcing: The Outsourcing Week in Review
THE WEEK IN REVIEW
How will president-elect Joe Biden and his policies impact the Business Process Outsourcing (BPO) industry? Biden has demonstrated opposition to the offshoring of US jobs on many occasions, and in September on his official website released his administration’s plans to ‘fix America’s outsourcing policies’ including: “Establishing a Biden Offshoring Tax Penalty and Biden “Made in America” Tax Credit”. Will his disdain for outsourcing impact his trade relations with the Philippines?
>> Read full article: US President Joe Biden’s policy on outsourcing
Despite Biden’s negative views on outsourcing, the Philippines and the rest of Asia are hoping to benefit from his presidency due to an anticipated de-escalation of the US-China trade war. Biden’s administration is also seen to benefit the Philippines’ imports and exports, as well as remittances and the BPO sector.
The central bank-registered Foreign Direct Investments (FDI) dropped 5.6 per cent to $4.4 billion as of end-August, from $4.7 billion last year. In addition, investment pledges approved by the Philippine Economic Zone Authority (PEZA) reached P72.6 billion as of October this year, which is 27 per cent lower than the approvals in the same period last year. In addition, the Philippine economy contracted again, albeit at a slower rate of 11.5 per cent for the third quarter. The contraction was attributed to the continued COVID restrictions – though it was a welcome improvement on the 16.9% dip in the second quarter. As the recession bears down, the country’s economic team is “optimistic that the worst is over for the country.” In spite of the unprecedented conditions, Bangko Sentral ng Pilipinas (BSP) expects that the Philippine economy’s Gross Domestic Product (GDP) will bounce back 6.5 to 7.5 per cent in 2021, and its full recovery will take place in 2022.
To help the economy recover, Department of Finance (DOF) Secretary Carlos Dominguez said that the agency is proposing a P4.5 trillion national budget for 2021 “to provide us with the tools necessary to rebuild [the] economy. In a virtual briefing titled “Philippines: Pathway to Asia in a Post-Pandemic World,” Dominguez said that while “borrowings will help us cover our revenue shortfall,” the agency is looking to “have ample ammunition to outlast the enemy.” Additionally, in the same briefing, Bases Conversion and Development Authority (BCDA) President and CEO Hon. Vivencio Dizon announced that New Clark City (NCC) is looking to improve its internet connectivity and infrastructure by next year to further attract clients. Dizon noted that they’re looking to have access to 1.5TB of internet bandwidth by 2021, “which will definitely help the information technology-business process outsourcing (IT-BPO) industry.” The construction of new railway systems and an airport has also begun, which Dizon said will “pave the way for long-term development of this brand new metropolis.”
The COVID-19 pandemic presents an opportunity for Philippine healthcare companies and government agencies to make their healthcare data systems more interoperable, said the Healthcare Information Management Association of the Philippines (HIMAP). The association noted that while the business outsourcing for healthcare is booming, it is difficult for health agencies and organizations to interact and share data with each other. Jeffrey Williams, founder and chief investment officer at Genfinity Philippines, said solutions vendors need to convince local healthcare organizations to buy in as “there [are] a lot of great solutions platforms” to get the traction that they need.
According to a new online report by the Oxford Business Group (OBG), mergers and acquisitions (M&A) opportunities are emerging in the Philippines for investors looking for attractively priced assets. The report further emphasized the positive impact of the operational changes in the business process outsourcing (BPO) industry during the global health crisis.
CEOs are sharing their thoughts on the current work arrangements brought about by the pandemic. IBM’s former CEO Ginni Rometty is adamant that remote working and digital transformation plans won’t go back to normal following the release of a COVID-19 vaccine. Rometty said that remote work was “here to stay” as part of a hybrid model of working. On the other hand, PayPal CEO and President Daniel Schulman has encouraged appreciation for call center workers. A recent survey became a “real wakeup call” for Schulman as it revealed that two thirds of PayPal’s entry-level and call center employees were living paycheck to paycheck, making them “one crisis away from a real problem.” Due to this, Paypal lowered healthcare costs and tailored financial health education services for its struggling employees. Schulman added that this translates to “much less attrition, much less absenteeism, much more engagement and pride in terms of what they’re doing and in terms of the success of the company.”
For international news, President Rodrigo Duterte on Sunday lauded the completion of the negotiations and establishment of the Regional Comprehensive Economic Partnership Agreement (RCEP). The formation of the RECP marks a landmark free trade alliance between 15 Asian states. The proposed free trade area covers a third of the global economy, and will facilitate greater flows of trade in goods and services, investments, economic and technical cooperation, and intellectual property rights protection, among others.
Wednesday, November 18, 2020
NEWS THIS WEEK
17 November 2020
- M&A opportunities emerging in PH – Oxford Business Group – read article…
- Foreign investors need specific investors’ visa to enter the Philippines – read article…
- PEZA repeats call to exempt locators from disincentives – read article…
16 November 2020
- Fifteen countries form RCEP – the world’s largest trading bloc – read article…
- PEZA reports P72.6-B committed investments; 27% lower than last year – read article…
- Singapore and PH central banks to work together on data connectivity – read article…
13 November 2020
- PayPal CEO says investing in call center workers will drive shareholder returns – read article…
- DOF proposes P4.506T 2021 budget to rebuild economy – read article…
- PH welcomes free trade agreement – read article…
- New Clark City to further improve internet and transportation infrastructure – read article…
12 November 2020
- Philippine economy slumps 11.5% in Q3 2020 – read article…
- Remote work is here to stay – former IBM CEO – read article…
- Peso ends flat vs dollar – read article…
- Healthcare BPOs see pandemic as opportunity to upgrade PH systems – read article…
11 November 2020
- FDIs down 5.6% on August – read article…
- Outsourcing to rise as COVID-hit companies seek to cut costs – read article…
- PH economy’s full recovery expected by 2022 – read article…
- PH likely to benefit from Biden presidency – read article…
