The Outsourcing Week in Review: Wednesday, July 3, 2019

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THE WEEK IN REVIEW

Criticism of the recently imposed government ban on developing new economic zones in Metro Manila has been gathering momentum. Charito B. Plaza, director general of the Philippine Economic Zone Authority (PEZA) has said that 131 applications to construct IT centers in the National Capital Region, mostly targeting BPO firms, are now under threat. She has proposed there is an extension to the transition period. The IT and Business Process Association of the Philippines (IBPAP) has also weighed in, with its president and CEO, Ray Untal, expressing concern that the growth it expects from new BPO  locators in the NCR may now be compromised by a lack of office space to house them.

Francisco S. Zaldarriaga, Philippine Ecozones Association president, has also said that the moratorium will hinder BPO expansion, because a huge chunk of BPO activity is located in Metro Manila, with most BPO companies in the country headquartered there.

Meanwhile BPO office development outside Manila continues to gather pace. Property developer Megaworld has reserved PHP300 billion for capital spending from 2020 to 2024 to purchase more land outside the NCR to build office space for the BPO sector. Iloilo City is soon to have its own IT economic zone, strongly backed by the Duterte administration. It will be built in Mandurriao, and host a tower to be named the SM City Iloilo BPO Tower. According to Colliers International Philippines, the launch of real estate investment trusts, or REITs, later this year should help accelerate the development of space in the regions, by providing a new source of capital for developers.

There have also been reminders in the news of the risks that that the BPO industry faces. In the first quarter of the year, the Philippines economy slowed substantially, dropping to 5.6% according to the Philippines Statistics Office. Rising wage costs were a key driver. According to central bank governor Benjamin Diokno, the slowdown is an aberration, and the economy is firing on all cylinders, and projected to enjoy steady economic growth without risks of overheating.

London-based research consultancy Capital Economics, however, has reminded the industry that US president Donald Trump’s threat to punish American firms that outsource jobs overseas may yet materialize, with dire consequences for the country. Threats from cyber attack are also increasing for BPO firms. According to security firm, RiskIQ, the cyber attackers of Wipro’s networks are a well established hacking group and are increasingly targeting firms that can give them access to money sources outside the traditional financial ecosystem.

In industry news, Accenture’s substantial digital investments are now paying off with it posting a big 20% quarterly profit rise. Appetiser, a Melbourne-based app developer has expanded its operations in Cebu City. It is the company’s third location in the Philippines after establishing operations in Davao in 2017.

LinkedIn’s ‘Future of Skills 2019 Report’ has said that social media marketing, front-end web development and human-centered design are the growing, AI-resilient skills of the future. The report notes that the Philippines’ strengths in these skills are strong, and should stand the country in good stead. So too should addressing equal opportunity policies by employers to boost their access to quality employees. But according to a 2018 Philippine LGBT Chamber of Commerce report, only 17% of companies in the Philippines have policies against the discrimination of the LGBTQIA+ community. TELUS International Philippines is a company that has made great strides in this area through its resource group Spectrum Philippines, which ensures the company provides work benefits that are more inclusive to the LGBTQIA+ community.

Not all foreign companies are so meticulous. The Philippine Amusement and Gaming Corp (PAGCOR) has urged offshore gaming operators to pay proper taxes, particularly their dues for foreign employees. Otherwise, they face stiff penalties amid the government’s tightening up of monitoring and enforcement measures.

Wednesday, July 3, 2019

NEWS THIS WEEK

1 July 2019

• Trump’s threatened outsourcing ban still a danger to Philippine BPOs – read article…
• Accenture’s digital investments pay off with big quarterly profit rise – read article…
• Philippine economy in ‘Goldilocks phase’, says Diokno – read article…

28 June 2019

• Iloilo city to develop IT ecozone – read article…
•  attackers at work since 2016, says RiskIQ – read article…

27 June 2019

• Megaworld allots PHP300bn to buy more land for BPO offices – read article…
• TELUS promotes equal opportunity for LGBTQIA+ community – read article…
• NCR ecozone ban in Manila attracts more criticism – read article…
• Philippines economy slows in first quarter – read article…

26 June 2019

• Philippine workers’ web skills in growing demand says LinkedIn – read article…
• Launch of REITs will drive investments in new office space – read article…
• Developers say freeze on new NCR ecozones will affect BPO investment – read article…

25 June 2019

• PAGCOR urges POGOs to comply with rules and pay their dues – read article…

Read more Inside Outsourcing Newsletters here:

1. The Outsourcing Week in Review: June 26, 2019
2. The Outsourcing Week in Review: July 10, 2019