Office space market sees growth in 2018 on back of BPO resurgence

MANILA, PHILIPPINES — The office property market is expected to continue expanding next year with a resurgence of the information technology-business process management (IT-BPM) and growth of the offshore online gaming industry.

David Leechiu, chief executive officer of Leechiu Property Consultants (LPC), said they are anticipating a “dramatic resurgence” of the IT-BPM industry in 2018 resulting from reaffirmed relations with the US and the approval of the bicameral version of the comprehensive tax reform law, which is friendly to the IT-BPM industry.

Leechiu noted the recent upgrade of the country’s credit rating is also a positive development.

“A handful of the world’s largest companies by market capitalization are in final stages of setting up shared services operations that will be employing tens of thousands of Filipinos, which will assure the world that all is well in the Philippines,” he said in a press briefing on Tuesday, Dec. 12.

Leechiu said there is a “very good chance” that Metro Manila office take-up would reach 800,000 to 850,000 square meters in 2018.

Metro Manila office take-up rate is forecast in 2017 to register at an all-time high of 750,000. As of end-November, take-up was at 728,305 square meters.

“The exponential growth from the offshore online gaming industry fuelled robust office demand and more than made up for a slack from the IT-business process manufacturing industry,” he said.

Leechiu further said online gaming expanded by 306 percent from only 56,700 square meters in 2016 to 230,102 square meters as of the end of November.

IT-BPM take-up, on the other hand, was 28-percent less at 347,660 square meters as of November from 485,100 square meters in 2016.

Online gaming firms took up spaces mostly in Bay City, the business districts rising along Manila Bay. Bay City accounted for 67 percent of all online gaming take-up as of last month.

Meanwhile, vacancy rate across Metro Manila registered at a manageable 6.62 percent. – Leslie Gatpolintan

source: interaksyon.com

BPO industry’s increasing shift to automation worries call center agents, impacts women more

BAGUIO CITY – The government continues to tout the business process outsourcing sector as a key growth driver and jobs generator, but has not done much to stem the danger of job losses as many big businesses, especially foreign clients, shift to automation, an industry leader said.

According to BPO Industry Employees Network (BIEN) spokesperson Mylene Cabalona, the IT-Business Process Management (ITBPM) has reported the alarming impact of automation on jobs, given that at present BPO workers do not enjoy security of tenure even if they are considered regular employees.

According to the ITBPM, employment in the low-end services will be slashed by at least 43,000 due to the shift to automation. The International Labour Organization (ILO) paints a dimmer picture – citing that 89% of BPO workers in the Philippines are at high risk due to the change in technology.

“Companies implement many schemes in order to ‘manage out’ employees when necessary. Workers are forced to resign or their companies render them floating for months with no pay when clients pull out from vendors, even if the company is continuously hiring for other clients. With the projected job losses due to automation, the situation can get worse and massive,” Cabalona said.

The group underscored the precarious nature of jobs and the vulnerability of the BPO industry itself. “The possible impact on jobs and workers of this shift to automation also exposes how insecure jobs are in the BPO industry and even the industry itself. It is heavily reliant on foreign markets and changes, outside of our control. The danger is the government seems to depend on BPO industry to generate employment, however precarious. If the government is serious at securing decent jobs for the people, then it should look into developing more robust industries to create jobs,” Cabalona said.

No unions

The group noted that since trade unions in the BPO Industry are virtually non-existent, BPO employees do not have a voice, are unable to defend their rights, and are thus bound to suffer the consequences of automation.

“The shift to automation is ultimately driven by companies’ desire to further bring down its costs. And the disruptions due to the shift to automation do not pertain to business disruptions, because this shift will benefit companies more while livelihoods of thousands of Filipino workers and their families will be at risk,” Cabalona added.

The group is also worried that the shift from low-end services to middle and high-end services with automation will disadvantage more women working in the BPO industry. According to the International Labour Organization (ILO), majority of those working in the BPO sector are women but they are largely employed in low-paid and low-skilled jobs.

“Companies and the government should be reminded that it is first and foremost their responsibility to uphold and respect the right of workers to secure and decent jobs. The shift in technology should not mean displacement and burden for the workers. BPO workers are thus summoned to unite and take action to assert our rights in this context,” Cabalona added.

source: interaksyon.com

Aspect launches new software solution for BPOs

MANILA, Philippines — US-based company Aspect Software, Inc. has launched a new product that reportedly provides an end-to-end operational management system for business process outsourcing companies.

According to the company, the Workforce Optimization 8.0 software includes workforce management, quality management, and performance management capabilities.

“Aspect’s technology solutions are designed to work on an intuitive level providing companies the flexibility of operations and integrated customer service operations,” Jim Freeze, Aspect senior vice president and chief marketing officer, said. “Our products provide solutions that coordinate workforce processes while seamlessly elevating the level of service that is delivered… while developing a tighter integration between the front and the back office,”

Aspect said that they have also revamped the user interface of the new product to make it simpler and easier to navigate.

“Overall, the user friendly interface will lead to a broader use of the system with agents not shying away from using the more powerful but erstwhile complex work for optimization features,” Edwin Ong, Aspect director of marketing and channels, said.

Company officials said that they are hoping to tap the still huge growth potential of the BPO market in the Philippines.

source: interaksyon.com

Foreign demand for non-voice BPO service to increase, BSP says

MANILA - The Bangko Sentral ng Pilipinas (BSP) expects continued demand for information technology and business process outsourcing (BPO) services from foreign companies, with the gradual shift to non-voice segments seen to increase revenues.

BSP director Rosabel Guerrero said BPO revenues are expected to have increased by 15 percent to $13.34 billion in 2013 from $11.6 billion the previous year.

“We see continued demand for BPO, computer, information and other business services,” Guerrero said.

For this year, the BSP sees BPO revenues growing by 15 percent to $15.3 billion.

“We have been seeing the gradual shift to other segments of the BPO industry, including transcription, animation, back office transactions of financial and non-financial industry,” Zeno Abenejo, BSP Department of Economic Research director said.

Tourism receipts, meanwhile, are expected to have grown by 20 percent to $4.8 billion last year from $4 billion in 2012.

“We see more demand from foreign companies to reduce operational cost. There’s an increasing market share of IT BPO segments such as the non-voice segments,” Abenejo said.

“Basically, there’s a view that the economy will show more strength. As we have seen, data releases from major economies, there are issues of more recovery,” he said.

The BPO sector is expected to generate around 124,000 jobs a year from 2014 to 2016, Pasig Representative Roman Romulo said.

Romulo, who is chairman of the House Committee on Higher and Technical Education, said this would help address the problem of unemployment, especially among college graduates. He said the government was counting on BPO players to continue generating employment to help shore up the economy.

source: interaksyon.com

Visayas BPOs lock down at height of 'Yolanda' wrath

MANILA - A number of business process outsourcing (BPO) companies in the Visayas temporarily stopped operations amid the onslaught of Typhoon ‘Yolanda’.

Information Technology and Business Process Association of the Philippines (IBPAP) president Jose Mari P. Mercado told InterAksyon.com that firms had to prioritize the safety of employees, who would have difficulty going to work amid the harsh weather.

"Some [companies] shut down, some went on lean operations. Our priority stays--safety and security of employees," Mercado said.

Some of the BPO industry's hubs in the Visayas such as Cebu and Iloilo were along the path of Yolanda--said to be the world's strongest typhoon this year.

Mercado said IBPAP has yet to assess the impact of Yolanda, but the sector was "definitely affected" by the typhoon.

Tampa, Florida-based Sykes Enterprises Inc said in a statement that the impact of Yolanda on its Philippine operations “has been immaterial, given the company’s disaster recovery planning and built-in redundant support infrastructure.”

“The company has been operating in the Philippines since 1997, and the number of typhoons and storms the archipelago experiences on average is roughly 20 on an annual basis,” Sykes noted.

Sykes has facilities in Metro Manila and Cebu.

source: interaksyon.com

US to levy $35 million fine on Infosys for 'fraudulently' seeking visas for workers

WASHINGTON--The US government plans to punish Indian outsourcing giant Infosys with the largest immigration fine ever for seeking visas fraudulently for workers at big clients in America, the Wall Street Journal reported Tuesday.

Infosys is accused of putting workers on visitor visas, which are much easier and cheaper to obtain than the correct work visas. The fine is expected to be about $35 million, the paper said, quoting people close to the matter.

A probe by the Department of Homeland Security and the State Department concluded that Infosys used easy-to-get B1 visas, which are meant for short business visits, to bring an unknown number of its workers to the United States for long-term stays, the sources were quoted as saying.

The fine will be announced Wednesday, the Journal said.

Infosys would not confirm details of the fine to AFP, but said in a statement earlier this month that it had reserved $35 million, including legal costs, based on talks with the US government over the probe, which was announced in 2011.

An Infosys spokeswoman said on Tuesday that they were "in the process of completing a civil resolution with the (US) government regarding its investigation of visa issues and I-9 documentation errors". She said the resolution had not been finalised.

With the alleged practice, Infosys could undercut competitors in bids for programming, accounting and other work performed for clients, the Journal said.

Infosys is known as an outsourcing company that does India-based computing and other technology services for Western clients, who have included Goldman Sachs Group, Wal-Mart Stores Inc. and Cisco Systems Inc.

But it also features thousands of US-based employees who develop and install software for accounting, logistics and supply-chain management in the retailing, finance and manufacturing sectors, the Journal said.

source: interaksyon.com

Healthcare BPOs pushing through with US roadshow despite shutdown

MANILA - The organization of Philippine call centers today said it will push through with a roadshow in the US despite its government's shutdown.

In a statement, the Contact Center Association of the Philippines (CCAP) said the roadshow in four major cities in the US will be held  from October 20 to November 5, and is aimed at selling the Philippines as an outsource location for healthcare IT.

“Healthcare IT and information management are areas where Filipinos can excel because of our wealth of professional doctors, nurses and clinicians and our proven expertise in voice services,” said CCAP president Benedict Hernandez, who will join the roadshow of the Healthcare Information Management Outsourcing Council of the Philippines (HIMOAP).

The US market for healthcare information is seen to grow to $54 billion by 2015.

Josefina Lauchangco, HIMOAP president, called on contact centers to gear up for their entry to the highly lucrative US healthcare IT outsourcing market, which comprises 60 percent of the global market for healthcare IT.

She said Philippine healthcare business process outsourcing firms (BPOs) have already quadrupled since 2009 and will further grow to a $1-billion industry by 2016.

Driving this market’s growth is the US Healthcare Reform Bill, more popularly known as “Obamacare” after President Barack Obama.

Under the measure, more than 40 million Americans would become eligible for healthcare coverage. For a citizen to avail of healthcare benefits, they have to go through a tedious process of verification for eligibility, a service that can be outsourced to a company based offshore, such as the Philippines.

The US government spent $3 trillion for healthcare in 2012, representing 17.3 percent of its gross domestic product (GDP).

“In the next three years, four million new enrollees are expected to join the American healthcare system. This will further grow to 35 to 40 million by 2016," said Lauchangco.

Offshore outsourcing is the most efficient way to manage the growing requirements of healthcare IT, Hernandez said.

According to Lauchangco, five factors drive outsourcing: the urgent need to cut healthcare cost, an aging US population, the rise in the incidence of diseases, the demand for trustworthy and error-free healthcare delivery, and growing requirements for an integrated healthcare system.

As more Americans apply for Obamacare, Lauchangco said the demand for hundreds of helpdesks manned by healthcare professionals 24/7 will rise and provide outsourcing opportunities for Filipinos.

“We have an opportunity to build the Philippines as a differentiated brand of knowledge workers. This is an area that can withstand price wars and shield the country from economic downturns," Hernandez said.

CCAP has nearly 100 member-companies that account for 70 percent of contact center revenues in the country.

source: interaksyon.com

BPO industry hikes revenue, jobs targets

MANILA - The country's business process outsourcing (BPO) industry increased its revenue target for this year, citing greater interest in the Philippines as an outsourcing destination.

On the sidelines of the International Outsourcing Summit, Jose Mari P. Mercado, who is president of the Information Technology and Business Process Association of the Philippines (IBPAP), told reporters that the group hiked its 2013 revenue goal to $16 billion from the earlier forecast of $15.7 billion. The revised target is 21 percent higher than the $13.2 billion earned last year.



Mercado said employment will hit 960,000, higher than the earlier forecast of 925,000. The new jobs target is 23 percent more than last year's 777,000.

He cited strong partnerships among the private sector, the government and academe as among the drivers of industry growth.

Despite the upward adjustment in its 2013 revenue and employment projections, IBPAP is keeping its 2016 targets of $25 billion in revenues and 1.3 million jobs.

IBPAP chairman Danilo Sebastian Reyes told a press conference that the Philippines continues to attract BPO investments because the country can serve a wide range of requirements of different companies across different geographies, ranging from voice, call center services to non-voice, back office operations.

Citing a recent trip to the US, Reyes said, "There are pinpointed requests for the Philippines not only for contact centers but also high-value back office services."

"We've been quite successful at making the Philippines not only a call center but also a full-service IT-BPM provider," Reyes said.

"A lot of companies are now saying 'I want to outsource' and particularly 'I want to outsource in the Philippines,'" said Asheesh Mehra, head for Asia Pacific, Japan and the Middle East of Infosys.

Citing the efficiency of outsourcing work here, Mehra said the company has increased to 97 percent the share of locals in its Philippine workforce from 70 percent previously.

Mercado said new markets such as Japan are looking at Filipino animators and software developers.

A delegation of Philippine software developers that visited Tokyo last April was welcomed by a record 150 Japanese firms that showed interest in outsourcing work.

"One of the challenges for Japan is it's running out of people. We in the Philippines have these [human] resources," Mercado said.

source: interaksyon.com

Philippines, UK plan to double trade in 5 years

MANILA - The Philippines and the United Kingdom have agreed to double trade in the next five years amid growing interest for partnerships among Filipino and British businessmen.

In a press conference today, UK Minister of State for Trade and Investment Lord Stephen Green of Hurstpierpoint said two-way trade between the two countries has much room to grow as volumes remain minimal.

UK Trade and Investment (UKTI) data showed that two-way trade of goods and services reached £1.2 billion or P82 billion last year.

With increasing awareness about the opportunities that both countries can offer each other, Green said it would be easy to jack up trade and investments in the coming years, especially in the business process outsourcing (BPO), engineering, financial and retail sectors.

"We expect to see trade in both directions to double in the next five years," Green said.

The UK trade chief said more British businessmen are interested in the Philippines following its record economic expansion.

"The story of the Philippines needs to be more actively told," he said.

Philippine Trade Undersecretary Ponciano C. Manalo Jr. said four export sectors present opportunities for wider partnership between the two countries, namely, automotive parts, BPO, creative industries and food.

Finance Secretary Cesar V. Purisima said the UK may serve as the gateway for Filipino businessmen setting their sights at the European Union (EU).

"The EU remains the largest economic zone but is underrepresented in our trade. Despite the economic difficulties in that area, we welcome opportunities from the UK and the EU in general," Purisima said.

source: interaksyon.com

BPO firm in the market for experienced HR personnel, opens biggest Asia-Pacific facility in QC

MANILA - A business process outsourcing (BPO) company focused on human resources (HR) inaugurated today in Quezon City its biggest facility to serve the Asia-Pacific market.

The 500 seats of the 3,000-square meter state-of-the-art shared service center at the 7th floor of the Techno Plaza 2 building in Eastwood is expected to be filled up with experienced HR personnel by next year, said Mary Sue Rogers, Talent2 global managing director for HR managed services.



The Philippines was chosen as the site of Talent2's largest facility because of the availability of quality HR talents here, Rogers said.

"Philippine HR workers are good in accuracy, dealing with HR issues, dealing with employees with personal problems... The cultural fit and quality of work here is better than in India," she said.

"The Philippines will continue to be a destination where [BPO] clients will want to go," she added.

Talent2 is the only multinational HR service provider based in Asia-Pacific, a region that presents huge opportunities for HR outsourcing, said the company's chief executive John Rawlinson.

"Asia-Pacific is the fastest-growing economic region in the world, where talent flourishes. If you don't have an Asian strategy, you don't have a strategy," Rawlinson said.

"China is a huge market, and there are emerging markets like Indonesia, Malaysia and the Philippines. There's big growth here in terms of demand," Rogers said.

A growing segment of the clientele are homegrown Asia-Pacific firms, while the rest are local or regional subsidiaries of multinational companies.

The new Talent2 facility will serve clients from Australia, Hong Kong, Malaysia, Singapore and the Philippines.

"The Philippines is seen not only as a big delivery center but also a big market," Rogers said, adding that the company is serving "several dozens" firms based in the Philippines.

Since the company serves clients within the Asia-Pacific region, working hours are during daytime. "We can attract experienced HR, payroll and finance professionals who are tired of working at night, talents who want work-life balance," Rogers said.

Almost all of the 45 employees at Talent2's former facility in Makati City have been transferred to the new Quezon City site, which now has 130 employees following aggressive hiring during the last three months.

Talent2 mostly hires HR professionals with about five years of experience. "By hiring experienced staff, we can hit the ground running," Rogers said.

The company also has a facility in Cebu, which has about 100 employees.

Talent2 has 38 offices in 31 countries, with a 1,900-strong workforce serving over 4,000 clients in HR advisory, learning, payroll and recruitment.

source: interaksyon.com

Safeway to expand BPO operations in Philippines

A leading US retailer is “keen on expanding” its business process outsourcing (BPO) operations in the Philippines, the Department of Trade and Industry (DTI) said on Wednesday.

In a statement, the DTI said top executives of Safeway Inc arrived this month “to conduct due diligence relative to its plan of expanding its business operations in the country.”

"The team that came here was only from their BPO area," Trade Secretary Gregory L. Domingo said in text message when asked if Safeway has also expressed interest in retail operations here.

 Safeway is said to be the second-biggest supermarket chain in North America. The Pleasanton, California-based retailer has a Philippine affiliate, Safeway Philtech Inc, whose BPO operations have served over 1,700 stores and corporate offices in Canada and the US for a decade.

Safeway Philtech provides application development and enhancements, application support and maintenance, and technology and infrastructure support services.

“Top-ranked executives of Safeway were particularly upbeat on taking advantage of opportunities in the country’s BPO industry and looked at BPO activities that can add significant value to their global operations,” the DTI said.

“DTI-Foreign Trade Service Corps (FTSC) Assistant Secretary Josephine Romero personally met the [Safeway] team and urged them to expand their operations in the country and join the rosters of foreign companies that are reaping the benefits of a vibrant Philippine economy,” the DTI added.

source: interaksyon.com

Russian BPO software firm expands to ‘call-center leader’ Philippines

MANILA, Philippines — Attracted by the burgeoning local call center industry, Russian software firm Noda recently announced the availability of its call center software solution for use by Philippine BPO firms.

Initially available in Soviet Union territories in Central Asia and Eastern Europe, Noda’s contact center software comes to Asia Pacific via the Philippines for the first time since being founded in 2001.

The company’s software works as an all-in-one suite that helps manage an entire call center operation, from monitoring inbound and outbound calls to setting up an interactive voice response (IVR) system, all the way to providing real-time agent reports for key performance indicator (KPI) controlling.

Starting as a company that developed Voice over Internet Protocol (VoIP) solutions for call centers, Noda’s solutions have expanded to include IVR speech recognition, biometric verification, automatic call distribution, and a project management system.

The company trails behind Cisco and Avaya in this space, but has already captured as much as eight percent in the Russian market.

Noda CEO Andrey Zaitsev cited glowing prospects in the Philippines given its leadership position in the global business process outsourcing (BPO) industry, where it currently ranks first in voice-based services and second in non-voice services.

Zaitsev likewise emphasized the changing environment in the global macro economy, where analysts and business observers have observed a quickening shift of power from the US and Europe and into Asia.

“The best region for expansion, therefore, would be Asia Pacific, because it’s rising really fast” Zaitsev said in a recent press briefing, when asked why they chose the Philippines as one of the company’s initial expansion areas.

“All of these things made the Philippines the most attractive option for us,” he added.

The local BPO industry is projected to grow by as much as 20 percent through 2016, delivering an overall revenue stream of $25 billion and employing as much as 2 million direct employees.

Last year, the sector took home $11 billion in earnings and employed 638 million individuals, most of which earn an average salary of P16,000 a month, making employers in the sector among the highest-paying in the Philippines.

source: interaksyon.com

BPO sector payroll to hit P247 billion this year

MANILA – The country’s business process outsourcing sector is expected to shell out a total of P247 billion in salaries to its workers this year, boosting consumption spending, a lawmaker said Thursday.

“No matter how we look at it, P247 billion represents a huge amount of money being coursed through the economy every year, and helping to drive consumption spending,” Pasig Representative Roman Romulo said.

The consumption spending will help create recurring demand for goods and services, thus perking up domestic industries, he said.

The P247 billion represents about 40 to 45 percent of the sector’s revenue, projected to hit up to $13 billion this year.

“To put the P247 billion into perspective, it is equal to around 14 percent of the national government’s P1.816-trillion spending program this year, and larger than the budgets of the top five departments,” Romulo said.

A previous survey by the Bangko Sentral ng Pilipinas showed that BPO employees on average receive P383,863 in annual compensation.

Romulo said the P247 billion is also some 53 percent greater than the P161 billion in combined annual benefits paid by the Social Security System, Government Service Insurance System and Philippine Health Insurance Corp. to their respective members.

The SSS and GSIS paid P76 billion and P50 billion, respectively, in benefits to their members in 2011, while Philhealth paid P35 billion.

The BPO industry is projected to rake in up to $27 billion in annual revenues and directly engage some 1.3 million Filipino workers by 2016. It posted $11 billion in revenues on a labor force of 638,000 in 2011.

This year, the sector hopes to create 126,000 new jobs and generate $2 billion in extra earnings, according to the Business Processing Association of the Philippines.

The industry encompasses contact center services; medical, legal and other data transcription; animation; software development; engineering design; and digital content.

source: interaksyon.com

B.P.O. SECRETS

ALMOST as big a dollar earner as the blood, sweat and tears of our OFWs (who remit $1 billion every month) is the business process outsourcing industry, which made $11 billion last year and employed 650,000 workers (who didn’t have to sell their parents’ worldly goods in order to land a job in a strange country).

Of those BPO companies, 122 are located in Pasig – enough reason for Rep. Roman Romulo to shepherd a bill “protecting individual personal information in information and communications systems in the government and the private sector,” also known as the data privacy bill.

Bring up the word privacy in the same breath as communications and, as the congressman learned, you run into trouble with media. Which was what happened when he invited some of the most highly opinionated journalists to lunch to discuss the pros and cons of the bill. Which was anticlimactic, anyway, because the bill has been ratified in the House and the Senate.

The publishers and editors present howled in protest. After all, if many BPO clients are American and the US has no such law, why do we need one? Wouldn’t a water-tight contract be sufficient to guard a client’s database against leaks and other unauthorized disclosures (such as to a nosey reporter)? The congressman assured the journalists that “the bill does not penalize you,” only their BPO source, the law’s objective being to assure investors that the data they store in their computers are in safe hands (safe machines?).

Short of a presidential veto, I guess the best thing to hope for is that we will never have to invoke the law and its provisions against anyone.

source: mb.com.ph