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Welcome to Inside Outsourcing: The Outsourcing Week in Review
THE WEEK IN REVIEW
The Philippine BPO sector suffered P120 billion worth of missed opportunities and unplanned costs during the strict COVID lockdown period. According to recent IT Business Process Association of the Philippines (IBPAP) report, while the Information Technology-Business Process Outsourcing (IT-BPM) industry was able to increase its productive capacity throughout 2020 the pandemic, IBPAP president and CEO Rey Untal said the sector “spent a sizable sum” on accommodations, shuttle services, other work from home arrangement, and execution of expenses as well as missed opportunities arising from lost revenue. Due to this, the industry is “unlikely to meet the industry growth forecast of 3.5 per cent to 7.5 per cent in the next three years.”
Despite this setback, industry officials think that the digital and workforce transformation is the key to the BPO industry’s recovery, instead of cost cutting. Accenture senior managing director Ambe Tierro said that making investments in cloud technologies will allow the workforce to shift to a digital work-from-home environment more easily.
The property sector is also leaning on the BPO industry to drive office market demand. In an optimistic report by property consultancy Lobien Realty Group (LRG), the firm said it expects an increase in demand for space from the outsourcing sector, as 50 per cent of the players are experiencing growth, with global companies seeking more cost leverage. Currently, BPOs lead the demand drive for office space in Metro Manila representing approximately 32 per cent, followed by the up-and-coming gaming sector.
Department of Trade and Industry (DTI) secretary Ramon Lopez is confident that economic recovery is generally on the right path despite the decline in manufacturing Purchasing Managers’ Index (PMI) to a 48.1 in October, from 50.1 in September. The PMI is a monthly survey among businesses used to provide insight on business conditions and confidence with anything below 50 indicating a deterioration. In a statement, Lopez said the slowdown in manufacturing activities last month reflects that the economy is still in the adjustment period. This is supported by a recent International Monetary Fund (IMF) report which affirmed that the Philippines has fiscal space to provide more support to the economy amid the repercussions of the COVID-19 pandemic due to a relatively low level of debt.
In efforts to reopen and revive the economy, Malacañang Palace has announced that it is seeking to downgrade the classification of community quarantine in all areas in the country to Modified General Community Quarantine (MGCQ) by the first quarter of 2021. Palace spokesman Harry Roque Jr. said the government would assess whether areas put under General Community Quarantine (GCQ) would be ready for the transition to MGCQ by next month. For now though, the Department of Labor and Employment (DoLE), Department of the Interior and Local Government (DILG) and Department of Trade and Industry (DTI) have released guidance on workplace social-distancing protocols and are pushing businesses to adopt multiple and staggered work shifts. In a joint advisory dated October 22 but released only last week, the agencies said that letting employees report for work at different hours will allow more workers to come to the office while following physical distancing requirements to minimize the risk of coronavirus transmission.
The government has provided further guidance on the controversial COVID furloughing practices as employers have been allowed to extend the floating status of their employees beyond the maximum six months provided for in the Labor Code. However, DoLE said that these businesses cannot force their employees to agree to the extension. Labor Undersecretary Benjo Benavidez said that if the employees are forced, they can go to the DoLE and file a case. Further, if the company is unable to rehire the “floating” employee after six months, they must provide them with their separation pay.
In other parts of the country, Cebu City has cemented its stronghold as a primary outsourcing hub due to its “commendable” COVID-19 response and its efforts to sustain the operations of the IT-BPM industry. According to Cebu IT BPM Organization (Cib.O) and Wipro country head for Philippines and Malaysia Aseem Roy, most global companies choose Cebu compared to other IT hub destinations. Roy added that the city’s handling of the coronavirus situation “strengthened its credentials as a robust information and communications technology location.” In Mindanao, the Philippines is seeking investments from Arab countries on a wide range of sectors from agriculture to economic zone development to support the growth of the region. At the Second Mindanao Business Summit, Philippine Business Council Qatar chairman Grey Loayon proposed that Mindanao can provide support services for artificial intelligence for Qatari companies, adding that the Philippines’ over 290 information technology parks would be an advantage.
As the United States and the rest of the world assess the effects of Joe Biden’s recently confirmed presidential win, Philippine business organizations are not expecting any major changes in business relations between the two countries after Biden’s appointment to office. President of the Semiconductor and Electronics Industries in the Philippines Foundation Inc. (SEIPI) Dan Lachica said he doesn’t see major changes in 2021, as the world still grapples with the pandemic. Further, Philippine Chamber of Commerce and Industry (PCCI) president Amb. Benedicto Yujuico thinks that it “doesn’t matter a lot for the Philippines” who wins in the US elections, what matters is the relationship between the two countries.
In other BPO news, Genpact‘s UK BPO division won a $1.96M contract to build an artificial intelligence (AI) software to spot any potential safety concerns with the county’s planned mass vaccination program for COVID-19. News reports revealed that the government is expected to approve one or more coronavirus vaccines before the end of the year. Outsourcing company TCDX was recently awarded the “Best Employer Brand” during the Philippines Best Employer Branding Awards 2020. The award was instituted by the Employer Branding Institute (EBI), World HRD Congress, and the Stars of the Industry Group.
Wednesday, November 11, 2020
NEWS THIS WEEK
10 November 2020
- IT execs agree to relax remote working norms – read article…
- October inflation rate at three-month high – read article…
- No major changes in PH-US business relations under Biden – read article…
9 November 2020
- PH can support economy amid pandemic – IMF – read article…
- PH to explore potential Arab collaborations for Mindanao – read article…
- Digital transformation key to BPO sector’s rebound – read article…
6 November 2020
- IT-BPO sector missed P120bn business opportunities during lockdown – read article…
- Genpact wins $1.96M UK contract to build AI for COVID monitoring – read article…
- BPO sector ‘unlikely’ to meet industry forecast; but will remain stable amid pandemic – read article…
- BPOs expected to drive office market demand – read article…
5 November 2020
- SYNNEX and Concentrix separation approved – read article…
- Hyderabad office space demand spikes – read article…
- Govt eyes shift to MGCQ by 2021 – read article…
- PH economy on path to recovery – DTI chief – read article…
4 November 2020
- Employees can’t be forced to agree to extension of floating status – DOLE – read article…
- BPO firm TCDX named 2020 Best Employer Brand – read article…
- DOLE, DILG, DTI push staggered work shifts – read article…
- Cebu remains ideal IT-BPM hub; stakeholders laud COVID-19 efforts – read article…
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