The Outsourcing Week in Review: Wednesday, September 30, 2020

Welcome to Inside Outsourcing: The Outsourcing Week in Review

THE WEEK IN REVIEW

Despite COVID’s best efforts, the year’s fourth-quarter is looming and the obligatory conference, party and expo season has begun. Outsource Accelerator’s Outsourcing Summit 2020 is set to be broadcast on 8 October across North America and promises to be a unique full day virtual event, showcasing the best of the Philippine outsourcing industry to over 2,000 businesses, entrepreneurs and owners. The virtual event will be short on canapés, cocktails and chit-chat, but will make up for it by generating 100 new outsourcing jobs in just eight hours. Register now for free tickets while they last.

The Department of Trade and Industry (DTI) has led the conference season with a successful outsourcing webinar this week, aimed at Australian businesses. The “Philippine IT-BPM Industry: Your Tool for Business Recovery and Continuity” event was by all accounts a success, as outsourcing industry leaders presented the advantages of outsourcing IT-BPO and Engineering services to the Philippines. In the webinar hosted by Outsource Accelerator CEO (and part-time Australian), Derek Gallimore, the audience learned about the cost-effective workforce in the Philippines, as well as the country’s 98% literacy rate, 750,000 higher education graduates, 73 million digital-savvy and active internet users, affinity with diverse cultures, and current expansion plans to the countryside. As stated by Philippine Software Industry Association (PSIA) President Jonathan de Luzuriaga, Information Technology (IT) and software development services are expected to generate US$38.9 billion in revenue by 2022.

Senate President Pro Tempore Ralph Recto is pushing for a ‘grandfathering exemption’ to protect existing investors in the face of the sweeping changes proposed by the Corporate Recovery and Tax Incentives for Enterprises (CREATE) bill in respect to the numerous ecozones. As taxes across the economy are set to increase, he argued that higher taxation of the existing locators would only discourage any plans of expansion. Philippine Economic Zone Authority (PEZA) has also made a last-ditch effort to retain the powers, authority and the fiscal incentives it grants as the Senate deliberate the passage of the Corporate Recovery and Tax Incentives for Enterprises (CREATE) bill. With the global pandemic, PEZA director general Charito Plaza said that they “need to enhance our incentives to make it more attractive for getting investors who are moving out of other countries like China”.

The recent increase in foreign direct investments (FDI) and external debts are providing strength to the local currency, said ING Bank Manila Economist Nicholas Antonio T. Mapa.  In a recent report, Mapa said that the Philippine peso has remained the best performing currency in the region this year. In support of this, the Bangko Sentral ng Pilipinas (BSP) recently announced that the country’s balance of payments (BoP) remained in surplus for the seventh straight month in August, which it credited to the continued higher inflow of foreign exchange. However, in the results of two recent BSP surveys – Business Expectation Survey (BES) and the Consumer Expectation Survey (CES) –  both outlooks turned decidedly pessimistic for the third quarter compared to what was reported in the first quarter. To add fuel to the fire, the overall confidence index (CI) for CES fell to a record low of negative 54.5 per cent, the lowest since this survey began in 2007.

Things are slowly going back to normal for the outsourcing industry, as 77 per cent of Information Technology-Business Process Outsourcing (IT-BPO) firms conducting business in various economic zones nationwide are back to their operations, according to PEZA records. This week, the promotions agency said it entered into a partnership with the Southern Philippines Development Authority (SPDA) to develop special economic zones in Lanao del Sur. In a statement, PEZA said that the memorandum of understanding they signed last week approves the creation of economic zones in the province, which will help local governments industrialize their jurisdictions, transfer technology, develop land, and create jobs.

GET 3 FREE QUOTES: 700+ BPO SUPPLIERS
LEARN MORE

A white paper published by financial services company Northern Trust, explains that investment managers are choosing to outsource “core” functions including in-house dealing, foreign exchange and transition management. The publication said that the move to outsourcing was made after reviewing their operations as the COVID-19 pandemic compounded existing cost pressures.

It is becoming apparent that COVID’s new normal has led to Philippine Offshore Gaming Operators (POGOs) closing down their businesses and their mostly Chinese-workers fleeing from the Philippines. Bureau of Internal Revenue (BIR) deputy commissioner Arnel Guballa said that the agency was conscientiously collecting the tax obligations of the POGOs, service providers and their employees. However, recent collections were significantly lower compared to the collections made before the pandemic. In line with this, the Department of Finance (DOF) said that the government is conducting audits to ensure that POGOs intending to stop their operations have paid their tax dues before leaving the country.

Despite best-efforts from everyone in the economy, the BPO industry is still struggling to shake its association with COVID outbreaks – even with strict preventative measures and lockdown restrictions.

In other BPO news, outsourcing giant Accenture reported revenues of $44.3 billion for the full fiscal year, a three per cent increase compared with fiscal year 2019. However, they reported that revenue growth for the year was reduced approximately 1 percentage point by a decline in revenues from reimbursable travel costs. Meanwhile, another BPO giant Teleperformance UK celebrated that they were a great place to work, as the firm recently earned its designation as a Great Place to Work-Certified™ Organisation. “We are thrilled and extremely proud to be Great Place to Work-Certified™! It means a lot that our employees have reported a consistently positive experience with their colleagues, their leaders, and with their jobs,” said Teleperformance CEO for UK and South Africa, Gary Slade.

 

Wednesday, September 30, 2020

NEWS THIS WEEK

GET THE COMPLETE TOOLKIT - FREE
LEARN MORE

 

29 September 2020

28 September 2020

  • Teleperformance UK earns designation as a Great Place to Work-Certified™ Organisation in 2020 – read article…
  • PEZA in last-ditch effort to retain perks – read article…
  • BOP remains in surplus for 7th straight month – read article…

25 September 2020

  • Business, consumer confidence falls in Q3, seen negative in Q4 – BSP survey – read article…
  • Rising number of managers outsource middle and front office functions, says white paper – read article…
  • PH to be the second worst performing in ASEAN – AMRO – read article…
  • BPO companies vulnerable to COVID-19 outbreaks – read article…
  • PH IT services to bring $38.9bn in revenue by 2022 – read article…

24 September 2020

23 September 2020

Related outsourcing resources

    Transform your business
    Icon
    CONSULT
    Icon
    3 QUOTES
    Icon
    START
    Icon
    FAST-TRACK
    Icon
    TOOLKIT
    X
    Shares