The Outsourcing Week in Review: Wednesday, June 5, 2019

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THE WEEK IN REVIEW

Last year, Philippines employment in the IT-BPM sector grew by 5.1%, according to the IT & Business Process Outsourcing Association of the Philippines (IBPAP) to about 1.23 million employees. IBPAP expects this to continue to rise to 1.8 million direct jobs by 2022 in its industry roadmap. An important contributor to this will be the country’s expanding software sector. Jonathan de Luzuriaga, president of the Philippine Software Industry Association (PSIA), said the country’s software sector is expected to generate about 207,000 direct employees by 2022. Significantly, the PSIA will focus on strengthening small-to-medium-sized software firms and making them integral to the sector’s growth.

The Philippines’ digital trade, by which products and services are delivered across borders digitally, is growing fast. A report by the Hinrich Foundation which promotes sustainable global trade, says that the country’s digital trade was worth PHP160 billion in 2017, equivalent to 1.8% of GDP, and could hit PHP1.9 trillion by 2030. Not all firms believe that outsourcing is the answer to reducing operating costs, of course. The CEO of global insurance firm Zurich, Mario Greco has recently said that outsourcing is not socially sustainable. Robust growth figures for the industry, however, are reassuring that much of global commerce thinks otherwise. For example, US multinational enterprise software company Infor has announced that it is expanding its footprint in the Philippines. Helen Masters, the company’s Asia-Pacific SVP and local GM, says they are interested in the country’s BPO industry.

President Duterte’s visit to Japan serves as a reminder that the Philippines BPO industry should also tilt to fast-growing Asia for new opportunities. BPO deals are among the US$5.7 billion of investment pledges the president has secured. Expertise – not just English language skills – are increasingly the drivers of what the Philippines-based sector now offers. From Asia last week, Japanese tech company, Epson, announced that it has hired Ando Munenori as a country manager for its growing Philippines office; Chinese computer manufacturer Lenovo has opened its first exclusive service center at North Domingo Place in San Juan City; and BPO firm Asurion Customer Solutions Philippines is among 40 local and Korean companies that are participating in the 2019 Korea-Philippines Job Fair for Korean and Filipino EPS Returnee Workers.

The president’s promise of a corruption-free environment for Japanese investors (as for all investors) is, of course, essential. Effective labor legislation that balances the rights of workers with the demands of employers is also vital. The proposed security of tenure law, which aims to end “endo” or end-of-contract employment, however, could discourage local and foreign direct investment, according to Edgardo Lacson, chairman of the Employers Confederation of the Philippines.

In the regions, SM Prime Holdings announced its opening of Strata Tower, an office tower in Iloilo City that targets the BPO sector. Cebu-based outsourcing firm Azpired Inc. said it will be moving its headquarters to three floors of the Cebu Exchange building in 2020, after the prestige development is completed. Finding new workers in the provinces may also be helped by ICTjob.ph. According to Fred Tshidimba, CEO and founder of the job portal, it is focused on helping unemployed ICT professionals in Cebu and Davao match with companies that are in the market for their skills.

Wednesday, June 5, 2019

NEWS THIS WEEK

3 June 2019

• Lenovo opens first service center in Philippines – read article…
• Spectra360 acquires recruitment process outsourcing firm – read article…
• Digital trade in Philippines expected to reach PHP1.9tr by 2030 – read article…

31 May 2019

• Epson hires new country manager for Philippines – read article…
• Infor eyes Philippines’ BPO, logistics, and public sectors – read article…
• Duterte vows corruption-free environment for Japanese investors – read article…
• Outsourcing not a good strategy for cutting costs, says Zurich CEO – read article…

30 May 2019

• Local ICT jobs portal to match jobseekers with right jobs – read article…
• Proposed SoT law will hurt economy, says employers’ group – read article…

29 May 2019

• Japan’s investment pledges for PH cover BPO sector – read article…
• Local outsourcing firm Azpired to move to Cebu Exchange – read article…
• BPO firm Asurion to join Korea-Philippines job fair – read article…

28 May 2019

• PH software sector to employ 207,000 by 2022: PSIA – read article…
• SM opens BPO office building in Iloilo – read article…
• IT-BPM sector posts 5% growth in 2018 – read article…

Read more Inside Outsourcing Newsletters here:

1. The Outsourcing Week in Review: May 29, 2019
2. The Outsourcing Week in Review: June 12, 2019