Philippines one of the most attractive investment destinations - Oxford Business Group

Global consulting firm The Oxford Business Group (OBG) launched the latest version of a report on the country from the investor’s perspective, highlighting the Philippines’ growth story and its improving stature in the global arena.

The report entitled, “The Report: the Philippines 2015”, unveiled in Makati City on May 7, was produced with the help of the Makati Business Club and the Philippine Chamber of Commerce. It features detailed coverage of specific industries, most of which are benefiting from the strong economy.

“We are convinced that the Philippines is now one of the hottest and most attractive investment destinations not just in the region but globally. There has been a huge shift in investor sentiment away from traditional emerging markets such as the BRICs, China and India, now it’s all about Southeast Asia,” said Paulius Kuncinas, OBG Managing Editor for Asia in his speech at the launch.

The Philippine growth story is exciting, he said, because the growth is driven by domestic consumption anchored on high local demand.

This is a more sustainable model compared to the export-driven growth of other Asian “Tiger economies”, he said.

The most remarkable aspect of the story, he added, was the emergence of new sectors led by the BPO industry, which, he noted has moved on to more value-added services. It can claim global leadership along with India.

Rappler

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Philippines Aims for 'A' Credit Rating from Standard and Poor's

Standard and Poor’s Ratings Services (S&P) has kept its credit score on the Philippines, and is likely to stay at that level in the next six months at the least.

In a statement, S&P said it affirmed the Philippines’ ‘BBB’ long-term foreign currency rating, and assigned a stable outlook, which means the current score stays for the next six months to a year.

According to S&P, its move was driven by the country’s strong external position amid rising foreign exchange reserves and a smaller foreign debt burden.

Remittances by overseas Filipino workers (OFWs) and revenue from the business process outsourcing (BPO) industry have propped up the country’s external payments position. A recovering U.S. economy also has fueled exports growth, lending further support to the Philippines.

The Philippines is rated a notch above the minimum investment grade by both S&P and Moody’s at 'BBB' and 'Baa2', respectively. Fitch however has kept the Philippines at the minimum investment grade of 'BBB-'.

In a statement, government officials said the Philippines is aiming to hit the “A” rating over the medium term.

“Fundamentals of the Philippines significantly improved over the last few years. With the trend staying positive, additional upgrades in the credit ratings over the medium term should be achievable,” Bangko Sentral ng Pilipinas (BSP) Governor Amando Tetangco Jr. said.

“On the part of the BSP, efforts to further improve the regulatory environment for financial institutions, maintain price stability, and strengthen external payments position would be its contributions to placing the economy on an even higher gear,” Tetangco said.

Finance Secretary Cesar Purisima said a credit rating in the “A” category should be attainable, especially since the Philippines still remains underrated if one would compare the country’s credit ratings with how the market prices Philippine debt papers.

“If compared with those of other emerging markets, fundamentals of the Philippines are one of the strongest. And with continually improving major credit indicators, including debt manageability, credit ratings ideally should adjust accordingly,” Purisima said.

“Throughout the past five years of pursuing initiatives toward good governance, we have managed to outperform even our own targets and expectations. Moving forward, we expect to sustain the reform momentum and to raise the bar even higher,” he added.

Interaksyon

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Optimistic Filipino Business Execs on a Hiring Spree

Philippine business leaders are Southeast Asia’s most optimistic and the world’s third most bullish.

In its International Business Report, Grant Thornton said at least eight out of every 10 business executives in the Philippines are upbeat about the country’s economic prospects in the next 12 months.

Audit firm Punongbayan & Araullo conducted the survey in the country for Grant Thornton.

Filipino executives were behind their Irish and Indian counterparts, optimism among whom reached 92 percent and 89 percent, respectively, of survey respondents.

Filipinos however were the most optimistic in Southeast Asia, with Indonesians coming the closest at 68 percent, followed by Thais, 36 percent; and Singaporeans, 4 percent. Malaysians bucked the trend, with pessimists outnumbering optimists.

Filipino executives also are in the mood for hiring, with the percentage of respondents expecting an increase in employment at 56 percent, up 14 percentage points from last year.

Despite the improved hiring outlook, more than a third of respondents are hard put looking for qualified workers, albeit down 5 percentage points from last year.

“Although there’s a slight improvement in our skilled workers compared to last year, the gap between businesses’ hiring appetite and the depth of the local talent pool is still alarming,” Marivic Españo, chair and chief executive of P&A, said. 

"The country needs to cultivate the kind of workforce it needs to stay competitive and prevent our most highly skilled professionals from emigrating for job opportunities abroad,” she added.

Interaksyon

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Philippines Soon to Become Economic Heavyweight of Asia

The Philippine economy is forecasted to expand significantly over the next fifteen years to become one of Southeast Asia’s heavyweights, fueled by a growing middle class and an invigorated manufacturing sector.

Think tank IHS Global said that the government’s business-friendly policies would lead to higher levels of investment, helping create more jobs and raise incomes in the country.

Over the next five years, gross domestic product (GDP) growth may average 5.5 percent, forecasts showed. If this expansion were to be sustained, per capita income, or the money the average Filipino makes, could double to $6,000 a year by 2024. By 2029, the size of the economy is expected to more than triple from $310 billion in 2015 to over $1 trillion.

“These significant increases in per capita GDP will create one of Asean’s largest consumer markets of the future, as the middle class rapidly expands over time,” IHS Global Asia Pacific chief economist Rajiv Biswas said. “This will help attract foreign direct investment by multinationals into the Philippines manufacturing and services industry.”

The main growth drivers for the Philippines economy are the rapidly growing outsourcing sector and the strong flow of remittances from Filipino workers abroad. The expected gains may be attributed to the large pool of university-educated workers as well as the strong English-language skills of the workforce in the country.

In the Philippines, the export revenue from the business process outsourcing (BPO) sector more than doubled between 2008 and 2014, reaching an estimated $18 billion in revenues by 2014, while the total number of employees in the IT-BPO industry exceeded 1 million.

By 2016, the Philippines’ IT-BPO industry is projected to have 1.3 million employees. The rapid growth of this industry is also driving economic development in a number of cities across the Philippines, with Manila and Cebu now ranked among the world’s leading BPO hubs.

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Booming Mobile Commerce in the Philippines Fueled by Growing BPO Workforce

Mobile commerce is rapidly growing in the Philippines. 

Euromonitor International, a business intelligence company, suggests that this is because of the growing smartphone penetration in the country. The Philippines is one of the countries in the Asian market that is leading the charge in mobile commerce adoption. This has to do with the growing number of young, tech-savvy consumers that are relying heavily on their mobile devices in their daily lives.

According to Euromonitor International, a digitally-connected population is leading to a major rise in both the Philippines and Thailand. Together, these markets are expected to see their mobile commerce sectors reach $9 million by 2018. In the Philippines, consumers are showing particular favor for online shopping options, especially those that cater to mobile devices.

Another factor is the decreasing cost of smartphones. With these devices becoming less expensive, more consumers are gaining access to them, which is also exposing them to the concept of mobile commerce.

Another reason that mobile commerce is growing has to do with the growing business process outsourcing industry. In the Philippines, more than 1 million people are employed in this industry, many of whom work during the latter hours of the day in order to accommodate international business hours. These people tend to have limited time when it comes to shopping, so they opt to use their mobile devices to make the purchases they need while they are working.

Though still in its early days, smartphone penetration in the Philippines is expected to hit 50 per cent this year.  That triples the number of smartphone users in the country, which translates into a lot more money.

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BPO Industry a Big Factor in Poverty Alleviation in the Philippines

Poverty in the Philippines may decline rapidly in a couple of years if the government can sustain efforts that lead to higher growth and more jobs, the World Bank said in a new report.

The Philippine economy will grow by a faster rate this year and the next, the World Bank said, beating all other major Southeast Asian markets.

The country’s economic engines will be fueled by higher government spending, and revenue from migrant remittances and business process outsourcing (BPO) activities.

“Philippine growth is still one of the fastest among the major economies in the East Asia region, trailing only China,” the multilateral lender said in its East Asia and Pacific economic update.

“Strong remittances, falling oil prices, and upbeat consumer and business sentiments indicate stronger growth in 2015,” the bank said.

For 2015 and 2016, growth is expected to clock in at 6.5 percent, faster than 2014’s 6.1 percent.

The projection for 2015 is slightly lower than the World Bank’s previous forecast late last year, a cut that was in line with the outlook for the rest of the region.

Meanwhile, the rest of Asia is expected to grow by 6.7 percent, slower than 2014’s 6.9 percent.

As a result of sustained economic performance, poverty levels in the Philippines are expected to decline by nearly a third to 10.9 percent by 2017 from 2012’s 15.4 percent.

People who earn less than $1.25 a day are considered poor by the World Bank.

Philippine Daily Inquirer

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Eastvantage Hosts Python Workshop for Beginners

Eastvantage recently sponsored in its office the Practical Python Workshop Under Code Crafts PH Training for beginners last May 9, 2015. 

Eastvantage was also present at last year's PyCon 2014 and that's where the company first met the organizers and committee members. 

This year, one the company's initiatives is to sponsor events for this community, among other developer groups, by providing space for their workshops, training sessions and meet-ups. Using our Brussels and Amsterdam meeting rooms, we are able to use our existing resources in supporting these IT groups and hopefully, in return, have our brand recognized by all of its members.  

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Philippines Ranks 2nd Among Global Outsourcing Locations – Cushman & Wakefield

The Philippines rose a notch to rank second among the most attractive global outsourcing locations on the basis of risks, costs and conditions, according to the latest report by global real estate advisor Cushman & Wakefield.

In a report entitled, “Where in the World? Business Process Outsourcing (BPO) and Shared Service Location Index,” Cushman & Wakefield noted that two of the Philippines’ strongest points would be the cost of labor and the availability of skilled, English-speaking workers.

“One of the most significant changes in the global BPO market is the emergence of the Philippines as the world’s global leader of BPO and shared services operations,” the report stated.

Last year, the Philippine IT-business process outsourcing posted more than 18 percent growth in revenues to an estimated $18.4 billion, supporting more than 1 million jobs as of end-2014.

“A demand for English proficiency from English speaking industrialized nations is more than met by the Philippines, which graduates some 470,000 English proficient college students every year and has a national English proficiency rating of 92.5 percent. The English dialect of the Filipino workforce is also well received in the US,” Cushman & Wakefield said in the report.

“The employability of its students also remains a key factor in the migration of operations from India, where some 30 percent of students are regarded employable compared to 10 percent in India. This gives the Philippines a competitive advantage in enabling companies to reduce investment in their in-house training programs, which can be tantamount to a significant overhead. In addition, it also came 82nd out of 146 in the Forbes ‘Best Countries for Business’ survey, outplacing both India and China,” it added.

Source: http://www.cushmanwakefield.com/en/research-and-insight/2015/business-process-outsourcing-location-index-2015/

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