BPO in the Philippines

Benefits of call centre outsourcing to Philippines

Nikhil Chandwani 
Times Of India
31 July 2019

The entrepreneurial sector of the Philippines has been progressing vigorously, leaving behind competitors like China and India.

Especially as far as the outsourcing sector is concerned, it turns out that there are several newfound benefits of outsourcing to the Philippines. Over the past couple of years, there has been a thirty per cent growth in the business sector of the Philippines.

The strength of the BPO market has thus been established and is likely to witness more than twenty per cent growth in the coming years. Some key benefits of outsourcing to the Philippines include:

Data security

One of the key features can be seen in the Privacy of Data Act that has been brought to action in the Philippines. A prime concern of companies is to be able to keep their data secure from the prying sight of any third party. Any confidential or sensitive data will be protected from third-party infiltrations. Only authorized parties can access this data. This makes Philippines an extremely reliable destination for all forms of outsourcing tasks.

Convenience of language

Communication is not a bridge when it comes to working with the Philippines. English proficiency in the area is extremely high; thus, any form of communication and instruction gathering can be easily facilitated. Any communication with clients from different areas can remain secure as there will be no issues related to language accents or inconsistencies. This is a major benefit of maintaining a consistent standard for the representation of your business on various platforms.

Young talent

The Philippines working class constitutes of young talent in their twenties. This not only means that professionals in sectors like technical work are updated with the latest ongoings in their departments, but are also more trainable as compared to employees who have been working for a longer number of years.

The prime factor of growth remains the trainability of these professionals who can be moulded to carry out many tasks that are handed to them efficiently.

The success of the BPO industry is based on this system that is facilitated by the adaptability and flexibility of talented professionals. This is also a reason why the Philippines is one of the best places to outsource work to, as your business requirements can be easily accommodated with such high levels of customization.

The wide diversity in services

With various technical and cultural influences, the diversity in the range of services that flourish throughout the Philippines is remarkable. From desk services to other professions that require technically sound employees, everything that you are looking for can be found under a single roof. These are not just professionals who can accommodate your different requirements but are also highly educated and qualified in their respective fields.

This diversity makes the outsourcing of all the tasks from a company, often pertaining to different sectors, a lot more efficient and manageable.

Thus, in the modern business view of competition and hustle, outsourcing work from the Philippines can present your business with various benefits including quality work, efficient management and a reduced cost of availing all these services. Any growing brand must realize the significance of being able to collaborate with such professionals, who can not only help to grow your business further but also bring quality work for your label.

Davao City: PH Next Investment Destination

Can Davao City Become The Philippines' Next Investment Destination?



Annalisa Burgos, Contributor
Forbes.com
31 July 2019

Perhaps the Philippines' most underrated investment destination is its largest city in terms of area. Davao City has long attracted adventurous entrepreneurs and businesses for its rich natural resources and opportunities for economic growth, and yet, security issues in the southern region of Mindanao continue to deter many investors.

Victoria Plaza Mall on J.P. Laurel Avenue. Getty

Drive through Davao City and you’ll see the tell-tale signs of a growing metropolis–high-end condos and malls, construction sites and traffic congestion. Philippine President Rodrigo Duterte is credited with bringing progress to the hometown he led as mayor for more than two decades before moving to Malacañang Palace. Today, his children are following in his footsteps: daughter Sara Duterte-Carpio is the current mayor and his son Paolo is a congressman and other son Sebastian is city vice mayor.

In the private sector, wealth and power remain mostly in the hands of the homegrown elite: pioneer families unfazed by global stigma who invested in the city’s agribusiness, real estate, logistics and infrastructure thought too risky by their counterparts in the north. Meantime, bold foreign investors saw profit potential in this “Wild West” and blazed a trail–like Lars Wittig, country manager of Regus & SPACES by IWG Philippines.

Wittig began seeking new markets in Mindanao some 30 years ago, first for tobacco giant Philip Morris, then Dole’s plantation empire, and now for a leading operator of flexible workspaces. He says one of the biggest indicators that Davao was the place for Regus to invest was the number of gas stations, McDonalds and even the Starbucks he saw in 2012.

“This is really becoming a ground zero for all types of industries to venture into,” Wittig explained, noting the need to alleviate the burden on Metro Manila and shift operations to tier two cities like Davao. “We all know how difficult it is to maintain productivity [in Manila] and meanwhile down here, there’s less competition for a very young and IT-savvy population.”

PH FDI magnet

Fitch unit sees more FDIs in Philippines

Lawrence Agcaoili

The Philippine Star

28 July 2019

Tax reform, free trade deals expected to provide boost

MANILA, Philippines — The tax reform program in the country is seen boosting the country’s chances of bagging more foreign direct investments (FDI) , according to the research arm of the Fitch Group.

In its latest industry trend analysis, Fitch Solutions Macro Research said tax reforms in the Philippines would attract foreign investments particularly in the field of medical devices..File

In its latest industry trend analysis, Fitch Solutions Macro Research said tax reforms in the Philippines would attract foreign investments particularly in the field of medical devices.

“The tax reform program in the Philippines will boost the country’s attractiveness and encourage foreign investment. The Philippines currently has the second highest corporate tax rate in East And Southeast Asia,” Fitch Solutions said.

Fitch Solutions said FDIs in the country are somewhat hindered by a high fiscal burden through the high tax rates, which pose operational headwinds to firms and create barriers to investment.

Under the proposed tax reforms, the government intends to reduce corporate tax to 20 percent from 30 percent over 10 years from 2021, as well as reducing the number of capital income tax rates to 42 from 80.

“We believe that this will benefit medical device companies and boost foreign investment, as the tax reforms promote a more business friendly environment in the Philippines,” Fitch Solutions said.

The free trade agreements (FTAs) are also seen further boosting the country’s competitiveness and ease of trading for businesses.

For one, Trade Secretary Ramon Lopez held talks with Terumo last March to discuss the company’s plans to expand production of IV catheters at its manufacturing plant in Laguna Technopark in  Biñan, Laguna.

This follows the  approval of the Tax Reform for Acceleration and Inclusion Package 2 (TRAIN-2) in 2018, and as of 2019, the Duterte administration has remained optimistic that all packages of the proposed comprehensive tax reform program will be approved by 2020.

“On the other hand, the extent to which companies will benefit from the tax reforms will be limited by the proposed changes in investment incentives. We note that there have already been reports of some firms putting on hold their planned investments amid concerns of the proposed changes in the incentives regime,” it said.

Fitch Solutions said the changes include shortening income tax holidays for companies, as well as removing the five percent tax incentive on gross income earned, which companies registered with the Philippine Economic Zone Authority (PEZA) can claim.

“Businesses investing in the Philippines will benefit from a broad range of FTAs. Regional trade for medical device companies in the Philippines is facilitated by the country’s membership of the ASEAN, which has reduced or removed tariff and non-tariff trade barriers for most goods in recent years,” it said.

The ASEAN has also inked FTAs with some of the Philippines’ major trade partners, including China, Japan and South Korea. This will continue to boost the country’s competitiveness and ease the trading process for businesses, making it a more attractive destination for medical device companies.         

PH rank in Innovation 2019

Philippines break into the ranks of innovation achievers - report

Dennis Valdez

BusinessWorld

26 July 2019

THE PHILIPPINES has moved up 19 spots to 54^th out of 129 economies from last year on an annual list that tracks their performance in terms of innovation, with the country breaking into the ranks of 17 others that “outperform” in this regard relative to gross domestic product.

The Global Innovation Index 2019 (GII) — prepared by Cornell University, INSEAD and the World Intellectual Property Organization — said the Philippines improved in almost all the metrics which the report used, namely: in Institutions, Human Capital and Research, Infrastructure, Business Sophistication, Knowledge and Technology Outputs and Creative Outputs.

“In the Business sophistication (32^nd) pillar, the Philippines improves in almost all the indicators related to Innovation linkages and gains top ranks in High-tech imports (5^th) and Research talent (6^th),” the report read.

“In Knowledge and technology outputs (31^st), the data for indicator High-tech net exports became available this year and the country ranks 1^st,” it added.

“Four other indicators rank in the top 10: Firms offering formal training (9^th), productivity growth (10^th), ICT services exports (8^th), and Creative goods exports (8^th).”

At the same time, the Philippines was found weak in terms of ease of starting a business, ease of getting credit, expenditure on education, global R&D companies, scientific and technical articles and new businesses.

“While some changes to the GII model explain a small part of this leap, newly available metrics give a more thorough assessment of the country’s innovation performance, which itself shows some signs of progress,” the report said of the Philippines’ performance this year.

Compared to its regional peers, the report said the Philippines showed “relatively good scores” particularly in trademarks, females employed with advanced degrees, high-tech imports and creative goods exports.

The report noted that, on the whole, the country was one of the most improved on this year’s list, propelling it to break into the “innovation achievers” cluster.

“The Philippines appears for the first time in the group of innovation achievers. It scores above average in all innovation dimensions, with the exception of Market sophistication, relative to its lower middle-income peers,” the report said.

“It has remarkable performance in Knowledge diffusion and Knowledge absorption, not only relative to its income group and geographic region, but also relative to all other economies assessed in the GII.”

Reacting to the report, Trade Secretary Ramon M. Lopez said in a statement: “This is great news for our nation and our innovation ecosystem as a whole. It recognizes the efforts of the various government agencies… in advancing innovation among our people and MSMEs (micro, small, medium enterprises), creating an innovative culture, as well as in building linkages with academe and industry.”

He added that he expects further improvement in the country’s rank after the recent signing of Republic Act (RA) No. 11293 or the Philippine Innovation Act and RA No. 11337 or the Innovative Startup Act.

Malacañang also welcomed results of the latest report, saying in a statement that it commends the departments and agencies that helped achieve the improvement in the country’s global rank. “May this good news further motivate them in creating an environment that nurtures innovation and creates business opportunities as we become one of the fastest growing economies in the globe,” Presidential Spokesperson Salvador S. Panelo was quoted as saying.

The global top 10 consist of, in descending order: Switzerland (also top last year), Sweden (from 3^rd), the United States (from 6^th), the Netherlands (from 2^nd), the United Kingdom (from 4^th), Finland (from 7^th), Denmark (from 8^th), Singapore (8^th from 5^th), Germany (flat from 9^th last year) and Israel (from 11^th).

Seven of the 15 economies in the South East Asia, East Asia and Oceania group rank in the top 25, namely: Singapore, South Korea (11^th), Hong Kong (13^th), China (14^th), Japan (15^th), Australia (22^nd) and New Zealand (25^th).

Besides Singapore (8^th) and the Philippines (54^th), the other Southeast Asian countries on the list performed as follows: Malaysia (35^th), Vietnam (42^nd), Thailand (43^rd), Brunei (71^st), Indonesia (85^th) and Cambodia (98^th).

India, to which the Philippines is frequently compared when it comes to business process outsourcing, placed 52^nd in this year’s report. — Denise A. Valdez

SONA 2019: Focus on Economy

Such great economic progress  in last 3 years  

   

Manila Bulletin |Editorial

21 July 2019

When President Duterte delivers his State of the Nation Address (SONA) at a joint session of Congress tomorrow, Monday,  it will mark the start of the second half of his administration.  A great deal is expected  in these next three years , especially in the economic  field. The World Bank  sees the Philippines as the fastest growing economy in the Association  of  Southeast Asian Nations (ASEAN) today. It is now  the  13^th  largest economy in Asia, and  projected  to be the 5^th largest  in Asia and 16^th largest  in the world by 2050.

What could be the most significant economic development  for the country in the coming months and years  is  a joint  oil and gas exploration  with China which is expected to  begin this November, according to Energy Secretary Alfonso  Cusi,  chairman of the National Economic and Development Authority (NEDA).

President  Duterte  signed last May 28 Executive Order No. 80  removing a final roadblock to  an oil exploration, development, and production  agreement between the Philippine Exploration Corp. and the China National Offshore Oil Corp.  The  administration  had earlier signed  its first agreement with an Israeli company in 2018  covering a 416,000-hectare area east of Palawan. The  new agreement  with China covers a 720,000-hectare area in Calamian, west of Palawan. Calamian is one of two regions  near Palawan believed  to have considerable oil  resources;  the other is Reed Bank.

The  oil exploration agreement  is only one  area in  the multi-faceted relations  we have developed with China in the last three years. Our  trade with China, including Hong Kong, reached $417 billion this May, making  it the Philippines’ top trading partner. Philippine banana  exports tripled  in the first quarter of 2019 to $160 million.  Philippine  Online Gaming   Operations (POGO)  earned  P24 billion in taxes.  In 2018,  1.2 million Chinese tourists  boosted  the Philippine economy  by P32 billion;  2 million are expected  by 2020, a potential addition of  P50 billion to the economy.

In our ”Build, Build, Build”infrastructure program, China is involved in a big  way, including two donated bridges across the Pasig River, funding for a P500-million   Metro Manila flood-control project now on its second year,  a  P175-billion South Rail Project,  and  an P18.7-billion Kaliwa Dam to boost Metro Manila’s  water supply.

We may have ongoing  disputes in our conflicting claims to certain islands in the South China Sea, particularly in  the 200-mile  Exclusive Economic Zone we have renamed West Philippine Sea, but  President Duterte appears to have the situation well in hand.  He believes  the political  dispute will eventually be settled; in the meantime, he  is determined to see the Philippines benefit from the many  economic programs  that are underway.

The first half of the Duterte administration ends today  with considerable  economic  growth and progress. We look forward  to the second half which, we expect, will be marked with even more  economic  growth, as the President  spells out his plans for the country in the  next  three years in his State of the Nation Address tomorrow.

PH powerhouse economy

‘PHL growth faster than regional powerhouses’

Rea Cu| Business Mirror

27 June 2019

GROWTH of the Philippine economy will be faster than other regional economic powerhouses under the Duterte administration, the Department of Finance (DOF) said on Wednesday, citing the World Bank (WB) for such projection.

The country’s strong macroeconomic fundamentals provide the basis for the Bank’s expectations that the Philippine economy will grow faster than China and Malaysia, the DOF said in a statement on Wednesday.

Finance Undersecretary Gil S. Beltran said the World Bank based its projections on the Philippines’s solid external stance and “highly domestically driven” economy, which provides it “ample cushion” against external headwinds that are generally foreseen to slow down global growth this year.

“The Philippines is also expected to remain as an attractive destination for foreign direct investments [FDI]. We are pushing for further liberalization of investment ownership in the country,” said Beltran, also the chief economist of the DOF.

According to World Bank forecasts, the Philippines’s gross domestic product (GDP) is expected to grow by 6.4 percent this year, second only to Vietnam’s 6.6 percent, and higher than China’s 6.2 percent, Indonesia’s 5.2 percent and Malaysia’s 4.6 percent.

In 2020 and 2021, the Philippines’s GDP growth of 6.5 percent for both these periods will equal Vietnam’s 6.5 percent, also for both periods, and surpass China’s 6.1 and 6.0 percent, respectively.

The Indonesian economy is projected to expand 5.3 percent for 2020 and 2021, while Malaysia will maintain its growth at 4.6 percent in both these years.

Based on an economic research published by Standard & Poor’s (S&P) Global Ratings for June entitled Apac Monthly Snapshots: Trade Wars and Currency Corners, the country’s GDP is seen to settle between 6 percent and 6.5 percent this year.

“We continue to expect GDP growth to come in at the low end of the 6 percent to 6.5 percent range in 2019, with a likely resumption of the infrastructure build in the second half of the year to bring the fiscal impulse for the year to around neutral after being negative in the first half of the year. We also expect BSP [Bangko Sentral ng Pilipinas] to maintain its easing bias this year, supporting growth, as inflation will likely stay benign especially compared to last year’s spike,” the economic research said.

Beltran noted that the country’s debt-to-GDP ratio also continued its downward trajectory on the Duterte watch despite its ambitious infrastructure buildup under its “Build, Build, Build” (BBB) program, with national government debt in relation to GDP at 42.1 percent in 2017, and falling further to 41.9 percent in 2018.

“Moreover, the Philippines has implemented monetary and nonmonetary policies to keep inflation manageable and bring it back to the government’s target range of 2 to 4 percent this year. Perceived overheating risks have abated, driven by government measures and policies,” Beltran said.

Fitch Ratings has also maintained its “BBB” with a stable outlook for the Philippines as of May this year, while Moody’s also affirmed its Baa2 with a stable outlook as of November 2018.

Philippines in Goldilocks economy

Philippines enters ‘Goldilocks’ economy phase — Diokno

Lawrence Agcaoili 

The Philippine Star

June 21, 2019 

Right mix of high growth, low inflation

MANILA, Philippines — The Philippines has entered a “Goldilocks” economy with the right mix of high economic growth and low inflation, according to Bangko Sentral ng Pilipinas Governor Benjamin Diokno.



In a speech during the Wallace Business Forum (WBF), Diokno said the Philippine economy has entered a state of having “just the right” mix of high growth and low inflation.

“In other words ladies and gentlemen, the Philippine economy continues to fire on all cylinders and is expected to see steady economic growth without possible risks of overheating,” Diokno said.

“In terms of financial stability, we want to maintain a Goldilocks economy by not allowing markets to create new risks and vulnerabilities. This means that we do not only concern ourselves with growth and price stability, but also take into account resiliency. Implementing measures that would further enhance the existence of flexible systems and develop financial markets remains a policy imperative,” Diokno also said.

The country’s gross domestic product (GDP) growth slipped to a four-year low of 5.6 percent in the first quarter from 6.3 percent in the fourth quarter of last year primarily due to the delayed passage of the 2019 national budget.

On the other hand, inflation averaged 3.6 percent from January to May – well within the BSP’s two to four percent target – despite the slight uptick in May to 3.2 percent from three percent in April.

Inflation accelerated to 5.2 percent last year from 2.9 percent in 2017 due to elevated oil and food prices as well as weak peso, exceeding the BSP target range of two to four percent.

This paved the way for a tightening cycle that saw interest rates rise by 175 basis points in five straight rate-setting meetings between May and November last year to prevent inflation from spiraling out of control.

The BSP, however, slashed interest rates by 25 basis points due to easing inflation and slower-than-expected GDP growth in the first quarter.

“This decision was aimed at helping inflation move toward the middle of the target range and give due consideration to growth, in line with the BSP’s flexible approach to inflation targeting,” Diokno said.

According to Diokno, GDP growth is expected to pick up in the second half with the catch-up government spending plan.

“This positive alignment between growth and inflation has been a constant narrative and is expected to further lend support to the country’s long-run growth momentum,” Diokno said.

Despite all these positive developments, Diokno said there are still challenges on the horizon as International Monetary Fund chief Christine Lagarde aptly puts it, “the global economy is at a delicate moment”—as we see uncertainty as well as lack of trust and confidence by the business community as to what the global economic landscape is going to be.

The IMF has revised downward its global growth forecast for 2019 to 3.3 percent from the previous target of 3.7 percent.

With global growth slowing, Diokno said advanced economies have shifted from a restrictive to a more accommodative stance of monetary policy and there is tendency in some economies to move away from globalization toward the rise of protectionist policies such as the protracted trade tensions between the US and China.

“While the Philippines is not directly affected with the tariff impositions, the continued trade friction could take its toll on the country’s external sector,” he said.