The Outsourcing Week in Review: Wednesday, September 2, 2020

Welcome to Inside Outsourcing: The Outsourcing Week in Review

THE WEEK IN REVIEW

In a late-night address on Monday, President Rodrigo Duterte announced that Metro Manila and the provinces of Bulacan and Batangas will remain under General Community Quarantine (GCQ) for the entire month of September. Aside from Iligan, Bacolod, and Tacloban cities, other places not mentioned will be under the less restrictive Modified General Community Quarantine (MGCQ).

This decision brings the Philippines to its sixth month under a strict lockdown. According to World Bank/IFC Governance Consultant Eric Soriano, the Philippines’ imposing of the longest and harshest lockdown globally during this pandemic is to be blamed for the country’s economic meltdown, proving that “the cure was worse than the disease.” Soriano said that micro-, small-, and medium-sized enterprises (MSMEs) are the hardest hit, and blamed the strict lockdowns for the Philippines’ unemployment rate possibly jumping to 25 per cent.

However, the government and BSP remain confident.  Bangko Sentral ng Pilipinas (BSP) remains confident that country’s strong macroeconomic fundamentals continue to support the peso which has remained stable in the last five years and continues to be resilient amid the pandemic. It is also among the few Asian currencies that are continuing to appreciate against the US dollar. BSP Governor Benjamin Diokno has attributed this positive development to the impact of a benign inflation environment, strong and resilient banking system, prudent fiscal position, and sufficient level of international reserves. Former senator Manny Villar wrote in his opinion column stated simply that the Philippine economy is “not that bad” despite critics’ claims. He emphasized that the country’s “solid fundamentals” have continued to shield the country from price volatility and external risks.

In a cunning plan to help the country generate badly needed funds for the pandemic, minority senator Franklin Drilon proposed to squeeze the Chinese-owned Philippine Offshore Gaming Operators (POGOs) to bankroll the government’s COVID-19 programs. Under the proposed scheme, all wagers will be slapped with a five per cent franchise tax, replacing the old system of taxing only winning bets. Drilon suggested the scheme based on the recent Bayanihan to Recover as One Law which allows the President to realign an estimated 140 billion to spend for the current public health crisis.

As part of its ongoing economic recovery efforts, Philippine Economic Zone Authority (PEZA) Director General Charito Plaza said that the agency is creating more ecozones to generate job opportunities for Filipinos and to hasten development in areas outside Metro Manila. Plaza said that the COVID-19 pandemic “cannot stop PEZA and [local government units] from industrializing our country and being an investment haven in Asia.”

Sad news has hit the outsourcing industry this week with the announcement that the Philippines has slipped one notch to sixth place in the Tholons Global Innovation Index 2020’s list of top outsourcing destinations.  The Tholons List, which could be considered the outsourcing industry’s Miss Universe Pageant, has been topped once again by perennial favourite, India [eye roll emoji]. To add insult to injury, only two Philippine cities made the index’s Top 100 “Super Cities” list, Manila (fourth place down from second place last year) and Cebu City (down to 15th place from 12th). Davao City fell out of the rankings altogether after getting the 95th spot last year. It’s getting ugly out there…

A recent report by Wall Street giant Goldman Sachs has offered strong support for the outsourcing industry’s prospects in spite of the pandemic. The report said that a ‘third-wave’ of outsourcing growth and adoption could be expected in response to the economic ramifications of COVID-19.  The report correlated the trends of the previous global recessions of 2000 and 2008 and concluded that the post-COVID economic downturn would also likely generate growth in demand for a lot of IT and outsourcing companies in destinations like India and the Philippines. Another survey conducted by business process outsourcing (BPO) solutions provider Merchants South Africa found that customers still prefer human contact, with 62 percent of respondents saying they would rather speak to an agent despite the rise in digital options available.

In other news, BPO firm Everise announced a stellar performance of 29 percent revenue growth during the first half of 2020, giving the company projected annual US revenues of $275m to $300m. The growth is driven primarily by expansion of the company’s healthcare and technology sectors.  To service its forecasted growth Everise is actively recruiting 4,500 full-time, home-based customer and product support agents across the US — a doubling of its previous US headcount. Outsource Accelerator previously reported that Everise is also seeing strong expansion in the Philippines as it seeks to hire a further 2,000 Filipinos under the work from home setup.

In a busy week for SYKES Philippines, the BPO firm made assurances that employees not directly involved in the recent PHP120m gift card fraud scam will not lose their jobs, even as its client, Google pulled out its contract of 300 roles away from the company as Inside Outsourcing reported on last week. It is still business as usual for the firm as it recently launched its new chatbot, known as SARAH (SYKES’ Automated Recruitment Assistant and HR Helpdesk), to act as an intelligent online extension of the company’s HR Helpdesk. We can only hope that SARAH won’t start stealing gift cards.

Wednesday, September 2, 2020

NEWS THIS WEEK

1 September 2020

• Longest lockdown blamed for PH economic meltdown – read article…
• PH economy “not that bad” despite critics’ claim – Villar – read article…
• Metro Manila, nearby provinces still under GCQ until September 30 – read article…
• Third wave of IT outsourcing expected post-COVID – read article…
• PH slips to sixth place in global outsourcing ranking – read article…

28 August 2020

• RCEP ministers resolve ‘almost all’ issues – DTI chief – read article…
• Infosys launches AI-driven solution to automate helpdesk operations – read article…
• PH’s strong fundamentals continue to boost peso – read article…
• Everise projects $275M in 2020 revenue – read article…
• Outsourcing conference to create 100 PH jobs in 8 hours – read article…

27 August 2020

• Survey reveals human contact still important in contact centers – read article…
• SYKES PH assures employees not involved in fraud won’t lose jobs – read article…
• Accenture to cut jobs of low-performing employees – read article…
• PEZA pushes for more ecozones as part of recovery plan – read article…

26 August 2020

• Sitel Group named a finalist for ‘BPO Solution of the Year’ – read article…
• SYKES launches new AI chatbot, SARAH – read article…
• POGO franchise taxes proposed to support COVID-19 programs – read article…
• Cognizant to acquire Tin Roof Software to boost digital business – read article…

Read more Inside Outsourcing Newsletters here:

1. The Outsourcing Week in Review: August 26, 2020
2. The Outsourcing Week in Review: September 9, 2020