Trump a blow to BPOs, remittances

US President-elect Donald Trump’s plans to bring jobs back home as well as curb immigration are seen impacting on the Philippines’ business process outsourcing (BPO) sector as well as remittances, according to Moody’s Investors Service.

In a report released Thursday titled “Americas and Asia Pacific: Shift in US Policies Could Dampen Trade and Investment, Weaken Growth,” Moody’s said that “while the nature of policies under the next US administration is uncertain, President-elect Donald Trump’s campaign proposals indicate that a shift involving lower US imports and foreign direct investment (FDI), and curbs to immigration is possible.”

“While we expect trade agreements that have already been implemented to remain in place, US policies going forward could incentivize onshoring— the repatriation of jobs at overseas-based suppliers back to the US—and a focus on domestic production and sourcing. The countries that are most reliant on exports of high value-added goods and services, which would offer greatest onshoring potential, are more vulnerable to a potential shift in US trade policies,” the debt watcher said.

In particular, “India and the Philippines could also suffer in the event of policies that disincentivized foreign sourcing of business services,” Moody’s said. These two Asian countries are the biggest BPO destinations in the world. In the Philippines, the BPO sector is among the largest dollar earners, seen to surpass cash remittances from overseas Filipinos in the coming years.

As for Trump’s plan to tighten US immigration rules, Moody’s said it could curb remittances. “A tightening in immigration rules in the US would over time dampen growth in remittances from foreign workers, which are significant for some economies in Latin America and Asia-Pacific,” it said.

“In Asia-Pacific, exposure to remittances is smaller, although they still provide an important source of income for a number of countries. Remittances from the US are largest for the Philippines and Vietnam at 3.3 percent and 3.8 percent of GDP [gross domestic product], and 9.2 percent and 4.1 percent of current account receipts, respectively,” according to Moody’s.

The Philippines and Vietnam are nonetheless expected to withstand any negative impact on remittance flows from the US, Moody’s said.

For one, “the two countries’ current account surpluses and ample foreign exchange reserves would buffer any loss in remittance revenues.”

Citing World Bank data, Moody’s said remittances from the US account for about 34 percent of the total.

Remittance inflows to the Philippines account for 9.7 percent of the GDP, World Bank data showed.

source: business.inquirer.net

Fitting data centers into ‘modular containerized solutions’

MANILA, Philippines – With telecommunications, BPO and manufacturing industries rapidly developing in the Philippines, Asia’s new “Rising Tiger” appears to be looking at a lot of business growth in the coming years.

“Of course, that growth comes with improving our facilities, our network, our infrastructure,” said Hans Bayaborda, country manager for Emerson Network Power Philippines.

Bayaborda, along with four of his fellow Emerson colleagues, expressed the sentiment during a roundtable discussion on Wednesday about a recent report published by the company, called “Data Center 2025: Exploring the Possibilities.” The report, based off a global study attempting to predict the future of the data center, compiles results yielded from interviews with several key industry influencers, feedback from the industries themselves, as well as an online survey with 800 respondents.

“In the past, [IT infrastructure] was a nice thing to have,” explained Russell Perry, senior director for Marketing and Solutions in Asia. “Now, it has become a must-have.”

Renewable energy and private power generation
Respondents in the Asia Pacific area predicted that 25% of power used by data centers would be generated by solar energy. Furthermore, 33% of respondents in the region believe data centers will definitely move to private power generation, with an additional 44% believing the shift is likely.

“The control you have is the ability to optimize the data center to make sure that you make use of the power that is already available, and are able to utilize that to the outmost efficiency,” said Barry Bunyi, Emerson’s Director for Solutions Partner Business in Asia.

Increasing demand requires businesses to be flexible

In a related discussion, concerns about electricity access and efficient infrastructure are directly linked to the increasing consumer demand for the services powered by data centers.

“The time allowed for business owners to adapt, from a data center perspective, is inversely proportionate to the amount of growth you need to address,” said Bunyi.

In other words, businesses face an increasing need to be flexible about how they build and run their data centers. Newer facilities are looking at a long list of criteria they should aim to fulfill: they should be scalable to allow for rapid and/or unexpected growth, should be easy to build and quick to deploy, and should be optimized to accommodate the computer power needed for the speedy access consumers expect.

One of Emerson’s responses to these needs is what it calls “modular containerized solutions” – data centers fitted into shipping-like containers which can be easily transported and set-up at any location. As an example, Globe Telecom has purchased the first containerized solution sold in the Philippines, which was then set up in Cavite in front of the Intel building. Furthermore, Facebook is in the process of developing and piloting what it calls “rapid deployment data centers” (RDDC) with Emerson, in order to accommodate rapidly increasing usage of the global social network.

These developments seen in the area seem in line with predictions made in the Data Center 2025 report, with 58% of respondents predicting that future facilities will be at least half the size of current data centers, if not smaller.

Looking forward

The current IT model, as explained by Emerson, relies on a reactive approach – when a fault is discovered, an expert is deployed to fix it. But as the system grows more complex, the need for systematic monitoring and a more proactive/predictive management increases. It seems the data center of the future will not rely on the same amount of manpower to maintain itself, with 29% of respondents predicting full visibility from all levels, 25% of respondents predicting the data center will be self-optimizing, and 43% of respondents predicting it will even be self-healing.

“The data center is whatever the critical infrastructure is to the business,” Perry explained, and it appears more than plausible that its efficient deployment and maintenance will be an increasingly important question for the industry to tackle.

However, in the end, Perry says that the future is difficult to predict. What might seem like a permanent shift in the business landscape may in fact be no more than a passing fad, as evidenced by a previous trend in which companies began outsourcing various parts of their enterprise, before swiftly changing their minds and bringing them back in-house.

source: technology.inquirer.net

Top US bank sets up BPO in the Philippines

Despite moves by US President Barack Obama and the United States Congress to discourage outsourcing, one of the biggest US banks has decided to locate some of its non-core business support activities in the Philippines.

Wells Fargo & Co., the second largest US bank in deposits, home mortgage servicing and debit cards with $1.3 trillion in assets, is setting up a business support center in Manila as the country’s booming business process outsourcing (BPO) industry is projected to produce more than 120,000 new jobs this year.

Company officials did not disclose the value of the investment neither the number of BPO workers the operations would employ.

“We selected the Philippines to be part of Wells Fargo’s international footprint based on the country’s reputation for strong customer service, a large English-speaking population and a cultural affinity to the United States,” said David Caldwell, managing director of Wells Fargo Philippines Solutions, the local subsidiary of the US banking giant.

The new investment is also good news for property developer Megaworld Corp. on whose McKinley Hill Cyberpark project will rise a new building to serve the outsourcing needs of the US banking giant.

“Our location in McKinley Hill gives us a strong foothold as we are among our peers in the industry,” Caldwell said.

Wells Fargo joins other high-profile BPO locators at the 14-hectare McKinley Hill Cyberpark, including Accenture, HP and Thomson Reuters.

Wells Fargo Philippines Solutions already occupies two floors of buildings 8 and 10 Upper McKinley Road, and it will also lease a campus-type building currently being constructed in McKinley Hill Cyberpark.

PH reputation enhanced

The US bank’s launch of an in-house business support center here was welcomed by labor leader and former Sen. Ernesto Herrera, saying it has reinforced the Philippines’ reputation as “an exceptional global hub for labor-intensive and information technology-enabled outsourcing services.”

“We are counting on Wells Fargo’s new center to help provide gainful employment to our college-educated, fluent English-speaking professionals, many of whom remain idle,” said Herrera.

Variety of functions

He said Wells Fargo’s new Philippine center deals with a variety of functions, including customer service and back office support.

Herrera, who is locked in a struggle for leadership of the Trade Union Congress of the Philippines (TUCP), said his labor group’s new members include VOICE, a labor federation of contact center employees.

According to Herrera, the country’s booming BPO industry, which fully employs some 630,000 Filipinos, produced $11 billion in revenues in 2011.

The Business Processing Association of the Philippines sees industry revenues jumping 18 percent to $13 billion this year, he said.

Based on the projected incremental revenues of $2 billion, Herrera said the industry could create around 126,000 new jobs this year.

Worries over US bill

According to Herrera, Wells Fargo’s decision to shift more jobs offshore comes amid worries in the Philippines over an anti-outsourcing bill in the US Congress.

Herrera said the proposed US Call Center and Consumer Protection Act, introduced by New York Rep. Tim Bishop, would require the US Department of Labor to track firms that shift contact center jobs overseas. Those firms would be ineligible for any direct or indirect US federal loans or loan guarantees for five years.

Boost for cyberpark

The bill would also require contact center staff to disclose their location to US consumers, who would be given the right to be routed to a US-based call hub upon request, Herrera said.

However, Herrera said he does not expect the US Congress to pass the bill, which he said is being opposed by US corporations that are benefiting from outsourcing.

Megaworld said the entry of Wells Fargo was a big boost to the McKinley Hill Cyberpark, which is on a rapid expansion mode, with the ongoing construction of the four-tower Science Hub beside the Venice Piazza commercial and retail area.

As an IT park accredited by the Philippine Economic Zone Authority, McKinley Hill Cyberpark offers locators income tax holidays and other perks, including the duty-free importation of office equipment.

“We are proud that one of the United States’ top four banks, Wells Fargo, has chosen McKinley Hill Cyberpark to set up their new Philippine service center,” said Jericho Go, Megaworld’s first vice president for business development.

“This move highlights the attractiveness of the Philippines as an investment destination and its human resource capabilities,” Go said.

One of US Big 4

Founded in 1929, the San Francisco, California-based Wells Fargo is one of the so-called Big 4 US banks regarded as “too big to fail” at the height of the 2008 global financial crisis. The three others are Bank of America, Citigroup and JP Morgan.

JP Morgan and Citigroup have long existing in-house back offices in Manila through JP Morgan Chase Bank N.A. Philippine Customer Care Center and Citigroup Business Process Solutions Pte. Ltd.

Bigger franchise

Although Bank of America does not yet have in-house back offices here, Herrera said the Charlotte, North Carolina-based lender is known to have outsourced some of its customer support activities to an independent BPO provider with extensive Philippine operations.

Wells Fargo is emerging from the 2008 financial crisis with a bigger franchise, after it acquired rival banking giant Wachovia Corp., which had been weakened by mounting bad loans, Herrera said.

A highly diversified financial services company with more than 80 different business lines, Wells Fargo has 6,335 branches, 12,094 ATMs, 70 million customers and 264,000 employees, he said.

source: http://newsinfo.inquirer.net/159323/top-us-bank-sets-up-bpo-in-the-philippines