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MicroSourcing Updates

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How Small Business Owners Can Benefit From Outsourcing

by: Finella Kristle Panlilio

Tuesday, August 01, 2017 | Comments (0)

Category: Outsourcing Research / Trends

Offshore outsourcing today has provided businesses – big and small – with valuable opportunities to grow. Primarily, outsourcing became a practical option in order to cut costs, but eventually became a strategic way to improve business processes and generate profits.

Moreover, small- and medium-sized enterprises (SMEs) have turned to offshore outsourcing companies not only to save on expenses but also to actively grow their business and gain long-term benefits.

The Philippines, in particular, is one of the top destinations in outsourcing. Australia is governed by regulations that aim to protect their public sector, telecommunications, and financial services – all of which involve private data. This makes outsourcing to the Philippines ideal in its guarantee of protecting sensitive and confidential data, due to the existing Data Privacy Act.

Outsourcing benefits

Below are ways small- and mid-sized businesses can take advantage of outsourcing:

Save on costs

By outsourcing your business processes to an experienced/specialized third party provider, you will get the same quality results from a traditional in-house staff, minus all the standard employee compensation packages that come with it. Not to mention, it will boost productivity at lesser the cost. You will also save on making large expenditures on operations for as much as 70%. This involves office space, recruitment costs for new hires, and IT infrastructure.

Reduce risks

By choosing to outsource, you are mitigating risks and sharing them with your outsourcing partner, which they assume and manage for you. This is especially true for start-ups and smaller businesses that are not as fully equipped compared to their multinational counterparts. They anticipate any possible risks and also give you advice from a fresh and outsider's perspective.

Gain more control

Outsourcing allows you to avoid long-term commitments (and therefore, higher risks) and give you more flexibility in your operations. You are more confident that every dime is well-spent and each task is paid for accordingly.

Establish presence in local markets

It is not always that SMEs can expand their business, but outsourcing offers that possibility. Not only you have access to global talent, you will also gain insight on their operations.

MicroSourcing prides itself as a reliable and efficient SME partner for outsourcing business processes. We have supported hundreds of SME clients in various capacities. Contact us today to start growing your business!

BPOs remain competitive, according to DOF

by: Finella Kristle Panlilio

Friday, July 28, 2017 | Comments (0)

Category: Outsourcing News

The Department of Finance (DOF) assured the business process outsourcing (BPO) sector will maintain its global competitiveness in the export market, despite the implementation of a new, progressive tax reform.

BPO companies to remain VAT exempt

Finance Undersecretary Karl Kendrick T. Chua said in a statement that the foreign services of BPO companies in special economic zones (SEZs) or "eco-zones," are not directly affected by the tax reform program and will remain exempt from value-added tax (VAT).

In addition, Chua also clarified that businesses outside SEZs, as well as those registered under the Board of Investments (BOI) will retain their zero-rated status.

"The fear that the Philippine BPO industry will lose its competitiveness because of the proposed tax reform has no basis. Certain industry stakeholders are likely misinterpreting the provisions of the bill," Chua said. "There is no change in tax policy here for exporters."

"The concerns raised by the BPO sector against tax reform appear to be misplaced. They will remain competitive as demand for their services are driven by the high quality of service and talent they offer. The tax policy in the BPO sector will remain the same even after TRAIN," Chua added.

The proposed Tax Reform for Acceleration and Inclusion Act (TRAIN) seeks to limit the zero-VAT rating to exporters and remove preferential treatment to their suppliers, or otherwise known as "indirect exporters."

Chua explained that TRAIN bill, which is included in the House Bill No. 5636, explicitly states that the zero-rated VAT privilege of indirect reporters will be removed only "if and when a credible and enhanced system is put in place."

The House of Representatives-approved HB 5635 aims to cut personal income tax rates and lower estate taxes while adjusting fuel and automobile excise taxes, as well as expand the VAT base.

BSP and Department of Finance hail stable Moody's rating

by: Finella Kristle Panlilio

Friday, July 21, 2017 | Comments (0)

Category: Philippine Economy News

Moody's Investors Service ("Moody's") decision to maintain the Philippines’ investment grade rating and a stable outlook is a positive statement on the national government’s efforts to achieve economic growth, according to the Bangko Sentral ng Pilipinas (BSP) and Department of Finance (DOF).

A statement released by Moody’s said that the country's sovereign credit rating was maintained at Baa2, which is higher than the minimum investment grade, reaffirming a stable outlook on the rating.

"The decision of Moody's speaks well regarding the favourable path that the Philippine economy continues to tread, partly on account of the price and financial stability that comes on the back of prudent monetary policies and bank supervision," outgoing BSP Governor Amando Tetangco Jr. said in a statement.

"The banking sector, which remains strong and stable, will also continue to support the increasing potential output of the economy as it provides financing for growing investment and consumer demand," he added.

Furthermore, the statement also notes the Philippines' improving debt manageability, with the unconsolidated general government debt decreasing from 47.8 percent in 2009 to 38.3 percent of the GDP in 2016.

Stable PHL credit rating

The country's credit rating is expected to remain stable as economic performance remains to be strong, according to Moody's.

Finance Secretary Carlos Dominguez III said that financial institutions, both domestic and international, have lauded the current administration's commitment to strengthening economic reforms.

He said that the "favourable" rating from Moody's highlights the government’s efforts to sustain economic growth by attracting more investments, and making it more inclusive through increased human capital and infrastructure spending.

Downside risks, such as the Marawi City conflict, could affect and potentially undermine institutional strength and economic performance, according to Moody's.

Dominguez said that the Duterte administration was on top of the situation and expects the conflict to be contained and bear minimal impact.

"This administration continues to take actions to sustain the growth momentum and enhance investor confidence in the economy, and the ongoing efforts toward strengthening national security are testament to this commitment," he said.

Moody's also raised concerns regarding US policies that encourage onshoring of jobs that can have a negative impact on the business process outsourcing (BPO) industry, which is the Philippines' major economic growth driver.

Dominguez asserts the BPO industry's strong position notwithstanding said foreign policies.

"At the end of the day, investors make decisions based on what is good for business. And the Philippines, with its competitive cost, and young and educated workforce, will continue to be a wise investment destination for BPO companies and other enterprises," he said.

The Philippines: ASEAN's next 'tiger economy'?

by: Finella Kristle Panlilio

Monday, July 17, 2017 | Comments (0)

Category: Philippine Economy News

The Philippines ranks as one of the best-performing economies in Southeast Asia during the recent years, despite the weakened demand for exports, as well as a subdued agriculture sector, with the economy positioned to become the next "tiger economy" among ASEAN countries, according to the latest report by global research and consultancy firm Oxford Business Group (OBG).

Its newest publication, "The Report: The Philippines 2017", stated that President Rodrigo R. Duterte's policy reforms like corporate income tax reduction will help the rising domestic consumption and growing services sector, as well as increase foreign investments.

Furthermore, losses in the agricultural sector will be compensated by industrial and manufacturing growth with more employment opportunities.

Public infrastructure is also forecasted to soar in the coming years, with the help of the private sector in the long-term transport development, which will present rich opportunities to foreign investors.

The 'tiger economy'

The Philippine Statistics Authority (PSA) reports that the Philippine GDP expanded at a rate of 6.8 percent in 2016, recovering from 5.9 percent in 2015, as a result of a strong domestic demand, a gradual recovery in exports and fiscal stimulus.

The report cited a 'promising' infrastructure spending, boosting foreign investments and increase in transportation development projects.

In addition, a projected 7 to 8 percent increase in GDP is said to be attainable over the medium term.

Paulius Kuncinas, managing editor for Asia for Oxford Business group, said, "The consensus is it is going to be the Philippines as the next tiger economy. The simple answer is that the Philippines is unique because it is a knowledge and service-based economy and consumption-led."

The BPO industry was named to be one of the driving factors for economic growth and will continue to see an uptick in high-value-added positions over the medium term.

Concentrating on neglected sectors such as mining and minerals should be encouraged, according to Kuncinas, as too much concentration in economic powerhouses can negatively affect the economy.

Developing the country's tourism industry can also significantly help grow the economy due to its service export potential.

Kuncinas urged the government to also focus on the ICT sector as it complements with other sectors.

He also cited the disparity between Metro Manila and rural areas in terms of economic, social, technological, infrastructure, and financial development that inhibits the latter from inclusive growth.


PH Business Groups See 8% GDP Growth

by: Sarah Joson

Monday, June 27, 2016 | Comments (0)

Category: Philippine Economy News

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.

6% GDP growth achievable under Duterte admin

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.


PH Economy could Grow 7% in Q2 2016

by: Sarah Joson

Thursday, June 09, 2016 | Comments (0)

Category: Philippine Economy News

PH economic growth could increase to 7%

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 on 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.


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.

Alignment of growth policies and recommendations

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.


BPOs Seen Expanding Outside Metro Manila

by: Karen Cayamanda

Friday, June 03, 2016 | Comments (0)

Category: Philippine Economy News

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.

Increased demand for alternative business hubs

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.


IMF: PH on Track in Meeting Full-year Growth

by: Sarah Joson

Wednesday, May 25, 2016 | Comments (0)

Category: Philippine Economy News

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.

Factors fueling GDP growth

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. The 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.


PH Q1 Economic Growth Exceeds Expectations

by: Sarah Joson

Monday, May 23, 2016 | Comments (0)

Category: Philippine Economy News

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.

Philippines posts highest quarterly growth recorded

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.


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