BPO Industry Expects to Generate 170k More Jobs this Year

Jobs in the Philippine business process outsourcing (BPO) sector this year are forecast to grow by a fifth from last year.

Danilo Reyes, who chairs the Information Technology and Business Process Association of the Philippines (IBPAP), said the industry is aiming to grow its workforce to 1.2 million this year after jobs climbed to 1.03 million in 2014 from 900,000 in the previous year. The target headcount translates to another 170,000 jobs.

Speaking during a forum today on its prospects, Reyes said the industry is on track to meet its goal of 1.3 million jobs and $25 billion in revenues or 8 percent of gross domestic product (GDP) by next year.

He said BPO revenues increased by 19 percent from $15.5 billion in 2013 to $18.4 billion last year, representing 6 percent of the Philippine economy.

“All sectors are growing,” Reyes said, adding that all segments – global in-house centers, healthcare, mobile applications development, gaming and call centers – are expanding.

For 2015, revenues are forecast to increase to $21.3 billion, as Reyes expects growth from both the voice and non-voice segments.

“Healthcare is becoming big. It is the fastest growing now in terms of revenues and employees,” he said.

To address challenges in sustaining its talent pool, IBPAP is pursuing the Service Management Program (SMP), a 21-unit specialized course designed to provide students the skill sets needed to work in the industry.

The program is being offered in 17 universities across the country.

IBPAP also is adding three or four cities to its list of next wave cities by the middle of the year. To date, the next-wave cities include Baguio, Davao, Dumaguete, Iloilo, Lipa, Metro Bulacan, Metro Cavite, Metro Laguna, Metro Naga and Metro Rizal.

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IT-BPO Industry Expected to Grow by $25 Billion in 2016

The Business Process Outsourcing (BPO) industry produced one million jobs in 2014 and generated $18 billion (P805.5 billion) earnings, which could grow to $25 billion (P1.118 Trillion) in 2016, an association official said on Wednesday.

Danilo Reyes, Chairman of the Information Technology and Business Process Association of the Philippines (IBPAP), said the BPO industry aims to create 12.3 million jobs in the Philippines by 2016.

“BPO industry reached one million BPO jobs in 2014. This is significant, especially when the BPO industry began in the Philippines with only 2,000 employees 16 years ago,” Reyes said during 2015 Asia BPO Summit.

Reyes said the industry was optimistic it would continue to grow given the diversification of the services offered and their contribution to the overall performance of the IT-BPO sector.

According to Reyes, the contact center sector is still the biggest revenue  contributor, but new sectors are stepping up. These include the healthcare information management, which was the fastest-growing segment last year.

In the meantime, the group is targeting  to begin this year the crafting of a new road map for the industry beyond 2016  to set new targets and  strategies that will secure the leadership of the Philippine IT-BPO industry in the global offshoring space.

According to Reyes, the new road map is likely to cover six years up to 2022.

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Entry of Foreign Players in the Philippine Banking Industry Seen Beneficial

Several Asian banks are primed to start operating in the Philippines, taking advantage of the recent removal of restrictions on foreign participation in the financial sector.

Two banks from the Asia-Pacific region have submitted formal applications for regulatory approval while five more are in various stages of seeking the go-ahead to enter, according to Bangko Sentral ng Pilipinas (BSP) officials.

"We have a growing list of foreign banks who have expressed interest," BSP Assistant Governor Johnny Noe Ravalo told reporters on Wednesday. He indicated that many more have asked the BSP about a possible venture in the Philippines, but did not commit.

Japan's second-largest lender Sumitomo Mitsui Banking Corp. last February secured approval from the BSP to put up a branch in Manila. Sumitomo was the first foreign bank to be allowed to enter the Philippines following the liberalization of foreign ownership rules in the industry.

Last year, restrictions on foreign ownership in the banking sector were lifted by Congress to attract more investments and to comply with commitments to open certain sectors of the economy ahead of Southeast Asia's regional integration.

Under the new rules, foreign banks may choose from three modes of entry into the local market, namely setting up a foreign branch, acquiring existing institutions or incorporating an entirely new company.

BSP Deputy Governor Nestor A. Espenilla Jr. said seven Asian banks have firmed up plans to enter the Philippine market. Two have submitted papers for approval.

Conglomerate San Miguel Corp. last month said it might sell subsidiary Bank of Commerce to Japan's Mizuho Financial Group Inc., which was one of the suitors for the mid-sized local lender.

Moody's Investor Service, an international rating firm, has a "positive" outlook for the Philippine banking industry. The 70 other banking jurisdictions rated by Moody's were rated at either "stable" or "negative."

The entry of more foreign players in the local banking sector is seen beneficial to individual consumers and to the economy as a whole. Authorities have said that the entry of more banks could pave the way for higher levels of fixed investments since foreign firms were more comfortable transacting with institutions they were familiar with.

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Philippines Ranks High in Tourism Visa Openness

The Philippines is among the top 10 countries in the world where an international traveler encounters the least hassle in terms of securing a visa.

This factor is considered crucial to boosting local tourism and economic growth.

According to the latest Visa Openness Report by the United Nations World Tourism Organization (UNWTO), the Philippines scored 84 out of 100, indicating its openness, or the extent in which the country is facilitating tourism.

Those on top of the list were Cook Islands, Federated States of Micronesia, Niue and Dominica, which all scored 100, followed by Haiti (99) and Macao, China (85).

“From a regional perspective, destinations in Asia and the Pacific have facilitated international travel the most. To visit Asia and the Pacific, 23 percent of the world’s population does not require a visa, another 23 percent may obtain a visa on arrival, and 5 percent may use an e-visa,” the UNWTO report said.

“Southeast Asia is, together with East Africa, the most open subregion because of the large number of visa on arrival requirements and the considerable number of visa exemptions, and e-visa alternatives,” it added.

In a separate statement, UNWTO secretary general Taleb Rifai noted that visa facilitation is central to stimulating economic growth and job creation through tourism.

“Although there is much room for improvement, we are pleased to see that a growing number of governments around the world is taking decisive steps in this regard,” Rifai said.

Countries in the Americas and in Asia and the Pacific are said to have been at the forefront of visa facilitation, while Europe and Middle East have more restrictive visa policies.

Overall, emerging economies tend to be more open than advanced ones, with Southeast Asia, East Africa, the Caribbean and Oceania among the most open subregions.

Earlier research by the UNWTO and the World Travel and Tourism Council (WTTC) showed that the G20 economies could boost their international tourist numbers by an additional 122 million, generate an extra $206 billion in tourism exports, and create over five million additional jobs by improving visa processes and entry formalities.

The same research carried out for the Asia Pacific Economic Cooperation (APEC) member states and the Association of Southeast Asian Nations (ASEAN) indicated that visa facilitation could generate important gains for both groups, including the creation of 2.6 million jobs in APEC and 650,000 jobs in the ASEAN.

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Bloomberg Says Philippines Will Be the Second Fastest Growing Economy in the World

A recent survey of economists by Bloomberg shows the Philippines will be the second fastest-growing economy in the world this year, second only to China.

Bloomberg's survey says the Philippines and China will be the only two economies out of 57 included in the report that will grow 6 percent or more this year.

The report is based on average economists' estimates.

"The world is expected to grow 3.2 percent in 2015 and 3.7 percent next year after expanding 3.3 percent in each of the past two years, according to a Bloomberg survey of economists. China, the Philippines, Kenya, India and Indonesia, which together make up about 16 percent of global gross domestic product, are all forecast to grow more than 5 percent in 2015," Bloomberg said.

Also in the top 5 are Kenya and Nigeria. Many economists are pointing to Africa as the next fast-growth region after Asia.

Source: Bloomberg Business

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Staff Turnover Declines in Philippine BPO Industry

The Philippine business process outsourcing (BPO) industry posted a 20% staff turnover rate in 2014, the lowest level measured since 2007, as operations expanded to other major cities, according to a survey conducted by global professional services firm Tower Watson.

This is an improvement from the 33%, 24% and 26% attrition rates in 2011, 2012 and 2013 respectively.

“The sector, though fast-growing, has adopted various strategies in talent acquisition, including expanding operations outside the National Capital Region (NCR) to tap talent in Cebu, Davao and Southern Luzon,” said Vangie Daquilanea, Global Data Services Practice Head of Towers Watson Philippines.

“This has, in turn, minimized talent movements within the NCR, registering the lowest attrition rate in the last seven years,” she said.

IT-BPAP last month said that in the coming five years, “the industry will continue to expand at an average rate of 15% per annum, with the sector expected to earn some $20 billion and generate roughly 1.5 million new positions by 2016.”

“The continuing growth of the Philippine economy has largely benefited the BPO industry, since it gives foreign investors a positive impression of the country’s business environment. Scalability, experienced talent availability, foreign language skills, and a share of the graduate pool, all point to a very bright future for this sector,” Ms. Daquilanea said in the statement.

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Philippines Moves Up in Cloud Readiness Ranking

The Philippines moves 4 notches up in the 2014 Cloud Readiness Index, landing on the 10th spot.

Cloud – whether public, private, or hybrid – involves deploying groups of remote servers and software networks to allow centralized data storage and online access to computer services or resources.

The country’s ranking in cloud readiness improved from 14th in the 2011 release of the report, thanks to the continuously booming business process outsourcing (BPO) industry, one of the cloud-friendly industries.

"BPOs played a big part in this improvement, as cloud use is essential to accelerate the industry and give it an even higher competitive edge", said Bernie Trudel, chairman of the Asia Cloud Computing Association (ACCA).

The Philippines also ranked ahead of most Asian countries in terms of freedom of information, one of the parameters that make up the cloud index, Trudel, also the Cisco Asia Pacific chief technology officer, pointed out.

The country has improved with every subsequent release of the index, Trudel added.

The Philippines is now the middle band, what the ACCA calls “dedicated improvers,” alongside Taiwan, Malaysia, and Thailand.

This improvement has come despite the Philippines consistently scoring low on government regulations and telecommunication infrastructure parameters of the index.

Japan maintained its lead at the top of the index for the 3rd year, while New Zealand, Australia, and Thailand all moved up 4 places.

Now on its 3rd installment, the index assesses 14 countries against 10 indicators that their infrastructure and regulatory systems are prepared for cloud computing adoption in the region.

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Australian Businesses to Increase Investment in the Philippines

Australia is banking on their business and trade growth prospects in the country, firms from Down Under said.

Anthony Weymouth, Australian senior trade commissioner to the country, said that it is time for Australia to increase its trade presence in the Philippines.

Two-way trade between the two countries is at AU$3 billion ($2.40 billion) and an estimated 200 Australian companies now have a significant presence in the Philippines, employing 15,000 to 18,000 Filipinos, Weymouth said.

These include ANZ Bank and Macquarie, two of the major Australian locators in the country.

The landmark ASEAN-Australia-New Zealand Free Trade Agreement (AANZ) also now allows for 95% of Australian products to enter the Philippines duty free while 97% of Philippine-made products can enter Australia with the same benefit.

An increased popularity of Australian products is also seen due to the recent fall of the Aussie dollar.

“It’s basically a 20% price reduction in 3 months,” Weymouth said.

About 15,000 Australians currently reside in the Philippines while about 250,000 Filipinos now call Australia home, Weymouth shared.

Increased investment

Other Australian firms, meanwhile, praised the government efforts to improve the overall environment in doing business in the country.

“We see a country that is really getting its act together,” James Young, country director for Cardno, said. Cardno, a professional infrastructure and environmental services company is involved in some of the important public-private partnership (PPP) infrastructure projects planned for the next few years.

Michael Banak, director of Crone Partners, an architectural firm, confirmed that it is looking for a partner to set up a permanent base in the country.

The firm has been in the Philippines since 2006 and is notable for designing Arya Residences, the country’s first residential building receiving the “green” certifications of Building for Ecologically Responsive Design Excellence (BERDE) and Leadership in Energy & Environmental Design (LEED). Crone Partners is also designing a 20 hectare master-planned project.

Meanwhile, Site Skills Training based in Clark, Pampanga, is providing training services for construction, gas, mining, and oil. The company is behind Asia’s only simulated underground mine and an offshore platform which it uses to train workers involved in the Malampaya deep water gas-to-power project.

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Philippines No Longer 'Sick Man of Asia'

Philippines Socio-Economic Planning Secretary Arsenio Balisacan says the country no longer deserves to be branded the "sick man of Asia" after its economy grew more than 6 percent for a third consecutive year.

Hindered by natural disasters, growth of the $300 billion economy slowed to 6.1 percent in 2014, but still outpaced most other countries in Asia, officials said Thursday.

The 2014 performance ranks the Philippines as the second fastest growing Asian country behind China, which posted 7.3 percent growth, and ahead of Vietnam's 6.0 percent growth, Balisacan said. The Philippine economy grew 7.2 percent in 2013.

"Our economic growth is becoming more competitive with our East and Southeast Asian neighbors," Balisacan said.

"The numbers tell us that we are moving in the right direction," Baliscan said. "Clearly the economic policies and strategies we are implementing to achieve sustained and inclusive growth are bearing fruit," he said.

National Statistician Lisa Bersales said the "robust performance" of industry, particularly manufacturing and construction, lifted growth in the fourth quarter to 6.9 percent from 6.3 percent a year earlier.

She said services contributed 3.4 percentage points, industry 2.5 percentage points and agriculture 0.2 percentage points to the 2014 GDP growth of 6.1 percent.

Business process outsourcing was one of the contributors to the expansion of services, according to Balisacan. Outsourcing currently employs 1.052 million Filipinos and the 

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