by: Karen Cayamanda
Thursday, October 01, 2015 | Comments (0)
Category: Outsourcing Research / Trends
Increasingly, I get asked by new clients what the tips to success are in establishing an offshore team at MicroSourcing. And what best practices clients are doing that separate their Managed Operation from the pack in terms of performance, retention, and satisfaction.
Unfortunately, it doesn’t come down to just one or two things, it requires a broader and more consistent approach to both operational planning and ongoing behaviours. Summarised below is what we see being key client behaviours that facilitate a best-practice operation, ultimately leading to higher success rates with an offshore team:
If you’d like to discuss any of these points in greater detail, feel free to contact us.
General Manager - Australasia
Business groups in the Philippines led by the Philippine Chamber of Commerce and Industry (PCCI), Management Association of the Philippines (MAP), and the Philippine Exporters Confederation Inc. (Philexport) agree that a gross domestic product growth of eight percent is likely to occur under the incoming administration.
In a statement, PCCI President George Barcelon said the agribusiness platforms of the incoming administration will make growth a possibility. He added that in recent years, the agricultural industry didn’t progress. However, an eight percent GDP growth can be achieved if the nation’s strengths are used to reinforce the agriculture segment.
Meanwhile, MAP President Perry Pe said incoming President Rodrigo Duterte can make a six-percent growth achievable, and he said it could even go as high as eight percent.
Philexport President Sergio Ortiz-Luis Jr. said the new administration has solid plans for the micro, small and medium enterprises (MSMEs), human capital, infrastructure development, increased agricultural and rural enterprise productivity, and rural tourism of the Philippines, and is looking to improve the ease of doing business to propel the country’s expected robust economic growth.
According to Budget Secretary Florencio Abad, the economic growth of the Philippines could increase to at least seven percent, driven by increased public spending and election-led expenses. He noted that the second quarter could post better growth figures.
The country’s gross domestic product (GDP) growth peaked at 6.9 percent during the first quarter, the highest quarterly growth since 2014. If projections are achieved, it will be the fastest since the 7.7 percent growth recorded in the first quarter of 2013.
Secretary Abad pointed out that for the second quarter, economic expansion was fuelled by faster procurement of public services and increased spending for the presidential elections last May 9. He added that the Department of Budget and Management has already developed a system to absorb big outlays which was downplayed during the succeeding years of underspending that affected growth.
Moreover, he said the economy’s performance could be further improved if the incoming administration will focus on attracting investments, support tourism, and bid out more solid infrastructure projects.
by: Sarah Joson
Tuesday, June 07, 2016 | Comments (0)
Category: Philippine Economy News
During the meeting of the Joint Foreign Chambers (JFC) of the Philippines in Makati City, Rick Santos, President of the American Chamber of Commerce of the Philippines (AmCham), said the Philippines is still the leading market and sweet spot in Asia.
Santos and other joint foreign chamber representatives discussed the reforms lobbied in the seven policy notes that were published last March. Recommendations for the business process outsourcing (BPO), agricultural, and creative industries, as well as infrastructure, mining, tourism, manufacturing, and logistics sectors were indicated in the policy notes.
Santos also said with the upbeat real estate market in the country, they will continue to push for the Real Estate Investment Trust (REIT) law and other improvements in the foreign ownership act to reinforce foreign investment in the country. He added that the Chambers will strive to achieve inclusive growth with the incoming administration.
Moreover, he emphasized that the theme of inclusion is fitting as the new administration steps in and external issues such as tensions rising over the South China Sea, the signing of the Trans-Pacific Partnership, and looming negotiations between the Philippines and the EU over a Foreign Trade Agreement could soon affect the economy.
According to CB Richard Ellis Philippines (CBRE) Philippines, Inc. founder and Chairman Rick M. Santos, business process outsourcing (BPO) firms are expected to sustain growth in the coming years. These companies are seen expanding outside Metro Manila, which is consistent with the incoming government’s platform of developing the countryside.
Santos noted that the demand for alternative business hubs like Quezon City, Alabang, and Bay Area outside of expensive and saturated Makati City and other primary business districts in Metro Manila is increasing.
For instance, rental rates at Bonifacio Global City are predicted to increase to P1,163 per square metre in 2020, from P957 estimated for this year. The CBRE executive also noted that as the demand in the BPO market grows and Metro Manila can no longer accommodate the growth, it is now crucial for new areas to be developed. Locations such as Laguna, Cavite, Bulacan, Pampanga, Cebu, Bacolod, Iloilo, Davao, Cagayan De Oro, and Zamboanga are said to be absorbing investments, said CBRE. These areas are expected to be easily accessed once improvements on infrastructure projects and numerous pending (public-private partnership) projects start.
According to Shanaka Jayanath Peiris, International Monetary Fund’s Country Representative in the Philippines, the country’s first quarter gross domestic product (GDP) growth rate of 6.9% coincides with their target to achieve a full-year growth of 6%. The recent growth figure is also higher than the 5% GDP growth rate recorded during the same period of last year.
Election-related spending and strong domestic consumption are seen to fuel this growth which is also within the government’s projections of 6.8-7.8% for this year. Bulk of the growth was driven by the service sector at 7.9% and represented 56.8% of the economy. In addition to that, an 8.7% surge was posted by the industrial sector which collectively buoyed the economy, despite the 4.4% slowdown in the agricultural sector. Other key factors that reinforced the growth are the 25.6% surge in investment spending, as well as the 7% increase household consumption during the first three months of the year.
Even with the external risks from the continuous economic slowdown in China, and weakness in oil prices, IMF reported in its April issue of the World Economic Outlook that it is keeping its full-year growth projections for the Philippines, which is 6% for 2016, and 6.2% next year.
The IMF official noted that the rates are adjusted in line with the IMF’s targets. Also, it is expected that the Philippines will pick up the growth pace from the slow 5.8% in 2015, and become one of Asia’s better performers.
The Philippines posted a faster-than-expected 6.9 percent growth for the first quarter of this year. The nation is poised to hit full year targets and is recognized as one of the best performers for the period in Asia.
Not only did the growth figure beat economist forecasts, it is also the highest quarterly growth recorded in the country since the last quarter of 2014.
According to Economic Planning Secretary Emmanuel Esguerra, the growth was achieved even with the poor output from the agricultural sector, slow exports, and months of focus on electoral campaigns prior to the May 9 election. He also said the outgoing administration is pleased to be turning over a strong and stable country to President-elect Rodrigo Duterte who will start his term on June 30.
He also noted that despite the noticeable decline in business confidence in the second half, the country is not derailed from meeting the government’s full-year growth target of 6.8 to 7.8 percent. Moreover, he said throughout outgoing President Benigno Aquino’s six-year term, the country posted the highest growth for the country at more than six percent.
The incoming government has recently signaled that it will uphold policy continuity. This has prompted Standard & Poor's to realize that the Philippine economy will stay on its present growth track.
The credit rating agency released a report indicating presumptive President Rodrigo Duterte's inclination to maintain the outgoing government's infrastructure program via the public-private partnership program, and to continue efforts to revise constitutional restrictions on foreign investment.
The debt watcher also projected a six-percent gross domestic product (GDP) growth for the Philippines this year, which is higher than the revised 5.9 percent expansion in 2015, but is far from the government’s official GDP target of 6.8 percent to 7.8 percent.
One of S&P's previous concerns was the political uncertainties that could be activated under incoming President Duterte's term, noting that political volatilities could weaken the stability of the Philippine economy.
Duterte had mentioned his eight-point economic agenda, which delighted financial markets.
S&P also said in the report that the growing and educated middle class of the country will continue to fuel overseas employment and the outsourcing sector. This will then drive consumption and investment despite weak external demand.
Top economists from Dutch global financial institution ING and Bank of the Philippines Islands (BPI) predict that the country’s economic growth will reach nearly seven percent in the first quarter.
Nicholas Antonio Mapa, Associate Economist at BPI, explained that due to improved public spending, it is possible that the country’s gross domestic product rose 6.9 percent in the first quarter of this year, and is faster than the 6.3 percent posted during the fourth quarter of last year. He added that the Aquino administration will be closing on a high note as the first quarter gross domestic product (GDP) is expected to breach the six-percent mark, which could help the Philippines regain the top spot in the region.
Mapa cited strong consumption and improved government spending as factors for growth.
Meanwhile, the agriculture industry slowed down to 4.5 percent during the first quarter as a result of the El Niño phenomenon. But he noted that the services sector’s 10-percent contribution to the overall GDP will buoy the contraction in farm production based on the healthy first quarter corporate earnings.
The economist also said Philippine economic growth will remain steadfast amid strong consumption, backed by years of accelerated growth.
On the other hand, Joey Cuyegkeng, Senior Economist at ING Bank Manila, anticipates a 6.6 percent growth for the country’s GDP. He cited strong domestic demand, favourable private sector investment, resilient structural inflows, election spending, and infrastructure spending will make up for the agriculture industry’s output.
Jose Mario I. Cuyegkeng, an economist at global financial institution ING Bank N.V. Manila, recently said in a marketing report that he is anticipating a bullish economic growth which will clock in at 6.6% as strong public spending and election-related activities took place during the first quarter of 2016.
He noted that this will enable the central bank to sustain monetary policies while financial markets normalize until the new president implements updated procedures.
Mr. Cuyegkeng also said strong economic activities during this year’s first quarter point to growth. Activities including manufacturing indicators showing buoyant industrial events, improved government spending, and accelerated election spending reinforced the economy.
In line with this, the latest report from the Finance department revealed a 22% increase in spending in February last year, which is faster than the 7% increase in January.
Another factor noted by the bank analyst is the strong investment activity in the private sector over the period of January to March, which is the season leading to the national elections.
Overall, these activities are said to offset the underperformance of the agricultural industry caused by the El Niño phenomenon.
Mr. Cuyegkeng’s 6.6% growth forecast is faster than the 6.3% prediction for the fourth quarter of last year, and if it is actually hit, it will also be higher than the actual figure posted during last year’s fourth quarter. The growth, if realized, will enable the Bangko Sentral ng Pilipinas (BSP) to stick with the policy rates, and allow minimal inflation seen from January to April.