Saturday, 17 July 2010

BPO company to expand RP operations, hire 3,600 new employees

By Abigail L. Ho
Philippine Daily Inquirer
http://business.inquirer.net/money/topstories/view/20100716-281503/BPO-company-to-expand-RP-operations-hire-3600-new-employees

BUSINESS PROCESS outsourcing firm Convergys Corp. is expanding five of its 12 sites in the Philippines, driving the need to add at least 3,600 new employees to its 21,000-strong workforce.

In a briefing Friday, Convergys Philippines country manager Marife Zamora said the expansion covered the company’s sites at the University of the Philippines-Ayala Land TechnoHub in Quezon City, Nuvali in Laguna, San Lazaro in Manila, i3 in Cebu, and the facility in Bacolod City.

The expansion involved the addition of 2,300 workstations, prompting the need to hire at least 3,600 more people. Of the total, an estimated 350 were for the Bacolod site, 600 for Cebu, and 2,800 for Metro Manila.

The addition of the new employees, Zamora said, would further cement the company’s status as the biggest private employer in the country.

Convergys Philippines business development director Jomari Mercado said the expansion was driven by increased client demand across all industries that the company was servicing.

“Clients are demanding more seats, more capacity,” he said.

Zamora added that Philippine agents were among the best, if not the best, in Convergys’ global employee pool—fueling client demand for more business to be outsourced here.

“We’re expanding mainly because of the outstanding performance of our employees here and the overall demand for the high-quality service that the Philippine operations are delivering,” she said.

While many of Convergys’ 12 existing facilities were already filled to capacity, she said there were still other sites that had room for expansion.

However, the company was already looking at several locations nationwide to house possible new sites.

“We’re constantly looking at facilities in new areas, particularly in the Next Wave Cities, as identified by the [Business Processing Association of the Philippines and the Commission on Information and Communications Technology],” she said.

“We don’t have a short list yet, although we’re eyeing either totally new areas, or areas near where we already have existing facilities. But we’ll definitely still expand,” she added.

Investor to revive Subic int’l airport

Rey Garcia
BusinessWorld
http://www.bworld.com.ph/main/content.php?id=14305

SUBIC FREE PORT -- Aviation Concepts Holdings, an American-Canadian joint venture, is set to take over airport hangars abandoned by courier giant Federal Express.

The Subic Bay Metropolitan Authority (SBMA) said efforts to carve a niche in the aircraft chartering business finally hit pay dirt, as the aviation company based in Guam had decided to establish a world-class, full-service aviation center inside the Subic Bay International Airport (SBIA).

SBMA administrator Armand C. Arreza referred to the Aviation Concepts project as the “resurrection” of the SBIA, which has been dormant since February 2009 when Federal Express transferred its Asia-Pacific hub to China.

He said that just as FedEx in 1995 ushered in the first wave of foreign business locators to this free port, the Aviation Concepts project could open new opportunities by attracting intercontinental jets to the airport.

“Aviation Concepts has transformed an abandoned and dilapidated military hangar into Guam’s aviation center. SBIA will surely reap huge benefits from the expertise of this international firm,” Mr. Arreza said.

Aviation Concepts senior vice-president Anthony Decoste said the company would initially invest $1.1 million to rehabilitate airport facilities and start operations by mid-September.

“Lucky for us the SBIA was vacated by FedEx. Everything seems prepared for us -- world-class aviation facilities, minimal air traffic, availability of trained work force. Everything we need is right here in Subic,” he said.

Mr. Decoste said the jets his company would service would bring aircraft owners and VIPs here to see “what a wonderful area Subic Bay is, physically and business-wise.”

“Our concept here is to basically copy what is in Guam, bring it here and expand it,” said Mr. Decoste, who also serves as Aviation Concepts’ country director in the Philippines.

Aviation Concepts, he said, began looking at the Philippines when Guam operations “grew exponentially” and faced space constraints.

Mr. Decoste also praised Subic’s accessibility via the Subic-Clark-Tarlac Expressway, and the ease of making transactions with the SBMA.

Mr. Decoste said his company would hire 50 employees for its Subic operations. Workers will be trained at the “highest level attainable.”

The firm is committed to offer a “full range of aviation services and facilities to clients,” he said. These include ground handling, maintenance repair and overhaul, a Fixed Base Operation facility with VIP crew lounge and amenities, an air ambulance, aircraft scheduling and recordkeeping, aircraft detailing, hangarage, and technical stop services.

Mr. Decoste and Aviation Concepts aviation security head Edward Pooley signed the contract for the project last week with Stefani C. Saño, SBMA senior deputy administrator for business, and retired general Marcelo S. Santos, head of the SBMA airport.

In 2007, in partnership with Universal Weather and Aviation, Inc., Aviation Concepts opened the first aircraft scheduling center for business aircraft in Makati. The success of the venture led the firm to tap Subic Bay to expand operations. -- Rey Garcia

Pagcor’s high revenues–tough act to follow

Written by Butch del Castillo
Business Mirror
http://www.businessmirror.com.ph/indexPagcor’s high revenues–tough act to followPagcor’s high revenues–tough act to followPagcor’s high revenues–tough act to follow.php?option=com_content&view=article&id=27754:pagcors-high-revenuestough-act-to-follow&catid=28:opinion&Itemid=64

P-Noy has let on that he may be sympathetic to the idea of privatizing the Philippine Amusement and Gaming Corp. (Pagcor). He told the media during a get-together late Tuesday night. He was quoted by the Philippine Star as saying that “we have uncovered several anomalies in Pagcor amid allegations that the government is not really getting its share of the revenues.”

He also reportedly said Pagcor was a corrupt agency that served as a milking cow for high government officials during the (nine-year-and-a-half) Gloria Macapagal Arroyo era.

For these reasons—and mainly to end the corruption—he said he was inclined to eventually “turn over” the operations of Pagcor to the private sector. These are statements he made as quoted or paraphrased by the Star and the Philippine Daily Inquirer.

So now, according to the grapevine, a number of big businessmen with known links to the Aquino administration see these public statements by the Chief Executive as their cue to try and go for it. I will not be surprised if certain big one- or two-syllable names are now actually salivating and starting to organize a consortium that would, in effect, “go for the gold.”

The takeover of a corporate giant with an exclusive, long-term operating franchise like Pagcor would undoubtedly be an enviable trophy catch in the game of corporate takeovers.

For here is a huge, well-oiled money machine that has been churning out an average of P30 billion in revenues for the national government under the chairmanship of Efraim Genuino. Genuino, whether his critics like it or not, is credited with having at least trebled the government’s share in Pagcor profits, from an average of only P10 billion annually, under Alice Reyes, his predecessor.

Under the Pagcor charter (Republic Act 9487, which amended Presidential Decree1067-A and extended the gaming firm’s franchise for another 25 years), Pagcor’s revenue earnings are now being allocated as follows: 50 percent goes to the National Treasury; 5 percent to the Bureau of Internal Revenue as franchise tax; 5 percent to the Philippine Sports Commission for the country’s sports development programs; 1 percent to the Board of Claims, a fund administered by the Justice department to compensate victims of wrongful detention and prosecution; fixed amounts for local governments hosting Pagcor casinos, to be used for community projects.

Apart from all these, some P1.5 billion to P1.7 billion goes to the Presidential Social Fund, “to help fund the priority projects of the government.” This is actually a discretionary fund that the Chief Executive may disburse for any government undertaking that he or she may choose.

For the past nine years, the Pagcor has been the third-largest revenue center of the government, next only to the Bureau of Internal Revenue and the Bureau of Customs. Under Genuino’s chairmanship, it has opened up several additional strategic gaming centers in the country to maximize revenue generation. As a result, its work force has practically doubled from 10 years ago to around 11,000-strong.

Pagcor, to the government, is like the fairy tale Magic Goose that can be counted on to lay its golden eggs with clockwork regularity and efficiency. I wouldn’t be surprised, therefore, if the newly appointed fiscal managers of the Aquino administration would be among the first to object to the idea of getting rid of this magical fowl.

It’s easy to predict that they would resist any move to privatize Pagcor now or in the future. Right now, coping with the huge budgetary deficit that could exceed P340 billion this year is already a mind-boggling problem. These fiscal managers are in the best position to see that letting go of Pagcor for any price—even for, say, P200 billion in spot cash as rumored—would only compound the deficit for the next five years.

State-sponsored gaming, as an effective and reliable means of generating revenue for any country, is a concept that has come to its own throughout the Asian region. The ultra-conservative Japanese society, which regarded the idea with contempt for centuries, has finally come to grips with reality and began following successful models in the United States, Europe and a few other Asian capitals, notably Taipei, Hong Kong, Jakarta, Kuala Lumpur and Macau. Even Singapore—which, under the conservative father figure Lee Kuan Yew, eschewed gambling as a matter of state policy—has seen the light and has, in fact, set up an elaborate infrastructure for its own Las Vegas-style casinos to serve as magnet for tourists and investors.

In the Philippines, the Pagcor under Genuino came up with the fantastic idea of building a family entertainment city at the reclamation area in Parañaque. As envisioned by Genuino, the mini-city would consist of five-star hotels to cater to the high-rollers of the world. But not only that, the amusement complex would have convention centers, theaters, restaurants, fast-food chains, shopping malls and a theme park—in short, a place that would have something wholesome to offer to each and every member of any family of tourists. That “city” would rival, if not actually exceed, the features of the gaming capitals of Macau or even Las Vegas. Genuino’s vision got the wholehearted support of the Arroyo administration. The proposed complex actually drew commitments of participation from the biggest entertainment corporations of the world such as Genting Highlands, Star Cruises, and others. Local big names in business such as Henry Sy and Andrew Tan also indicated that they wanted to be part of the “action.” All told, their potential investment commitments added up to more than $10 billion.

This is the kind of big ideas that can only come from big minds. But, as the wheels of political fortune have turned, that vision, I’m afraid, is fading into a blur.

But still, why throw away a good concept—state-sponsored gaming as a revenue raiser—when your purported goal is to stamp out corruption? P-Noy also spoke of “several anomalies” unearthed by the new bosses in Pagcor.

If the new incumbents in Pagcor, indeed, have the goods on Genuino, et al., why not simply put them together and file the corresponding cases against them instead of making generalized statements for public consumption?

And if it is true that the government has been “short-changed” or has not been getting its rightful share of Pagcor revenues through the years, why not simply ask Cristino “Bong” Naguiat, the new Pagcor chairman, to exceed Genuino’s annual revenue record and thereby help ease the national government’s horrendous budget deficit?

The way I look at it—and I’d be happy to be proved wrong, of course—Genuino’s revenue record would be one tough act to follow. But certainly, this shouldn’t be reason to sell the whole enchilada.

The business that Typhoon ‘Basyang’ just couldn’t beat

Written by Max V. de Leon
Business Mirror
http://www.businessmirror.com.ph/index.php?option=com_content&view=article&id=27731:the-business-that-typhoon-basyang-just-couldnt-beat&catid=33:economy&Itemid=60

While Typhoon Basyang (international name Conson) was battering Metro Manila and nearby provinces around midnight Wednesday, and with power supply from the grid already cut, it was still “business-as-usual” for the contact centers in the country’s metropolitan capital.

More than 200,000 agents spread in about 180 call centers in Metro Manila continued to attend to the concerns of their customers in various countries, as howling winds with gusts of 120 kilometers an hour were wreaking havoc outside their buildings.

“There were no reports of interruptions [in the operations] and there were no complaints from our customers. Our call centers are well-prepared for situations like this,” Jojo Uligan, Contact Center Association of Philippines executive director, told the BusinessMirror.

Uligan said Manila’s call centers have already gone through worse typhoons before, such as Milenyo and Ondoy so from then on, officers made it a point to revisit their contingency plans every now and then, in case of a repeat. The plans usually include backup generators, double-redundancy in communication lines, and even transportation and temporary quarters for the agents.

Uligan said he was confident that with all these plans, call centers are prepared for the worst, even if the weather bureau again errs in its forecasts, just like it did in Basyang’s case; reports say Philippine Atmospheric, Geophysical and Astronomical Services Administration failed to give the public accurate reports on the typhoon.

He said call centers maintain their own standby generators to back up the generators of the buildings where they are located.

He recalled that in the wake of Typhoon Milenyo in Metro Manila in 2006, some call centers maintained operations for seven days or more just using generators. The industry also did not experience a downtime, and this established the reliability of Philippine call centers among their international clients.

“The shifting of power sources is seamless the moment a power interruption takes place, from the UPS [uninterrupted power supply] to the generators,” he said.

Most of the agents, he said, were already in their offices at about 7 p.m., hours before Basyang intensified, so there was no problem with the attendance.

Uligan said the country currently has about 300,000 call-center agents; more than 200,000 of them are in Metro Manila.

The number of contact centers in the entire Philippines, meanwhile, is around 230; about 150 to 180 are located in Metro Manila.

Close to 7% full-year growth possible–economist

Written by Cai U. Ordinario
Business Mirror
http://www.businessmirror.com.ph/index.php?option=com_content&view=article&id=27738:close-to-7-full-year-growth-possibleeconomist&catid=33:economy&Itemid=60

THE global economic recovery and improved business confidence riding on the new administration will all play a key role in boosting economic growth to close to 7 percent this year, according to an economist from the University of Asia and the Pacific (UA&P).

In an interview, Dr. Victor Abola, UA&P Strategic Business Economics program director, said the average growth in the first half of the year will likely hit 7.5 percent, while the second half will be a bit slower at around 6.2 percent to 6.3 percent.

Abola said second-quarter growth could post higher growth than the first quarter at around 7.5 percent. The third quarter, on the other hand, will likely post a growth of above 6 percent.

“I’ve not been able to revise completely our model but right now, the way I see it, you’ll probably average around 7.5 in the first half and most probably about 6 or 6.2 or 6.3 in the second half. So take that average, you’ll get a high 6 percent, nearer to 7 percent,” Abola said at the sidelines of the Dun & Bradstreet Business Optimism Index released on Thursday.

Abola said the second-quarter growth will likely be better than the first-quarter growth, since industry and the services sectors will likely continue the same pace of growth or
higher than the first quarter and the agriculture, fishery and forestry (AFF) sector will post milder contraction.

The first quarter’s impressive 7.3-percent gross domestic product (GDP) growth was buoyed by manufacturing’s double-digit growth of 20.7 percent.

In the January-to-March period, AFF contracted by 2.5 percent from last year’s growth of 2.1 percent; industry, 15.7 percent from last year’s contraction of 2.6 percent; and services, 6.1 percent from last year’s growth of 1.9 percent.

“What will make it faster, the growth of industry and services, is probably going to be as fast or probably a little bit faster. What will push it up is agriculture, [which] will be less negative. The indicators I am looking at—Meralco, energy indicators—you know that we have data up to April and May, they are about as strong as they were in the first quarter; very close. That means, it’s really strong. The second quarter is going to be quite strong,” Abola explained partly in Filipino.

However, a slowdown is expected at the start of the third quarter largely due to the appreciation of the peso. Abola said despite the optimism shown by businesses in the third quarter, the strong peso will likely temper growth in the second half of the year.

The World Bank said in its Philippine Quarterly Update that, because of the appreciating peso, overseas Filipino workers’ remittances would post a flat growth in peso terms despite a projected 8-percent growth in dollar terms.

Abola said that besides remittances, the strong peso would affect exports, which will mean that growth in manufacturing will not be as robust.

This was seen in the D&B Survey, which showed Philippine Economic Zone Authority firms being less optimistic of the third quarter than most firms.

“If you have a strong peso, growth cannot go faster. I don’t think it will be faster than the second quarter. Even though the figures indicate that optimism, I think it [growth in the second half] will be a bit slower,” Abola said.

Earlier, the National Economic and Development Authority (Neda) said it is confident that it is possible for the country to sustain a 7-percent growth this year.

Neda Acting Director General Augusto Santos said with the announcement of a 7.3-percent GDP growth in the first quarter, the economy would likely sustain the growth on the back of a positive outlook and seasonality.

The Neda said growth would be boosted by the continuation of the global economic rebound, and the renewed demand for electronics like computers, netbooks and smart phones. There is also an increase in demand for semiconductors.

Dennis Arroyo, former Neda National Planning and Policy Staff director, traced the renewed confidence to the change in administration, which he described as a “general feeling” after the conduct of an election.

Arroyo added that growth would also come from the end of the El Niño, growth in food manufacturing, growth in business-process outsourcing and stronger consumer confidence. The reconstruction after typhoons Ondoy and Pepeng will also continue to add to the factors that will sustain growth.

RP stocks seen to surpass records this year

By IAN C. SAYSON (Bloomberg)
Manila Bulletin
http://www.mb.com.ph/articles/267391/rp-stocks-seen-surpass-records-year

The Philippine stock index will extend a 30-month high and reach a record this year after remittances accelerated and the central bank kept interest rates unchanged, the nation’s biggest foreign-owned stock broker said.

The benchmark will rise to 3,900 in 2010 as economic expansion gathers pace through next year, said Alex Pomento, a strategist at Macquarie Group Ltd.’s Manila unit. Banks and builders will beat the index as record-low borrowing costs and increased repatriation of funds from overseas Filipinos drive demand for loans and homes, he said.

“Faster growth means stronger corporate earnings, robust loan growth and a buoyant property market,” Pomento said in an interview. Macquarie handled 11 percent of Philippine stock trades last month, the most among foreign brokerages.

The Philippine Stock Exchange Index has risen 14 percent this year, the second-best performer among the 12 biggest Asia Pacific markets. The measure has retreated 0.8 percent from a 30-month high on July 14, and remains 11 percent below its all-time high of 3,873.50 on Oct. 8, 2007.

Remittance growth quickened to 6.5 percent in May, the first acceleration in five months, the central bank said Saturday. It kept the benchmark interest rate at 4 percent and cut its inflation forecast for this year to 4 percent from 4.7 percent and lowered it to 3 percent from 3.6 percent for 2011.

Investors should “overweight” property and banks, Pomento said. Ayala Land Inc., the largest builder, and Megaworld Corp., the fourth-biggest developer, are among his most recommended stocks this year. Other picks are Banco de Oro Unibank Inc., the biggest bank by asset, Bank of the Philippine Islands, the No. 3 by assets, and Alliance Global Group Inc., owner of Megaworld and the largest Philippine casino.

Thursday, 15 July 2010

Dollar policy or peso policy

Written by John Mangun
Outside the Box
Business Mirror
http://www.businessmirror.com.ph/index.php?option=com_content&view=article&id=27600:dollar-policy-or-peso-policy&catid=28:opinion&Itemid=64


Even as the Philippines is outside of the financial typhoon blowing around the world, the administration is going to have to face and make some very important decisions in the near term.

The policy of the government for the last 12 months has been to wait and watch, and then react. While a reactive, rather than proactive, policy might be the easiest to implement as it does not require more than creating some “what if?” scenarios, last month the world situation changed in a way that the government must now take an economic-policy stand and go on the offensive.

Often, the best economic policy that a smaller economy like the Philippines can pursue is to follow the major nations and make adjustments as necessary for local conditions. As the world fell deeper and deeper into the economic black hole, the government reacted by pumping billions of government-borrowed money into so-called stimulus programs. This debt-based spending was accompanied by a massive inflation of their money supply by turning on the currency printing presses.

Simply stated, the disease that inflicted the world economy was the cancer of too much bad debt issued by the world’s banks and financial institutions. When these institutions realized that they could not afford to issue any more debt, lending around the globe stopped. And the result was the symptom of the disease, a slowdown and contraction of economic activity.

Government stimulus was an attempt to get the global economy moving again. And to help cure the disease of a stop of bank lending, governments lowered interest rates to make money cheaper in an attempt to get the banks to start lending again.

The combined actions of stimulus and low interest rates failed because the banks used bailout money and low interest rates to improve their balance sheets while not writing off the bad debt. The banks are still carrying the bad debt and the banks are still refusing to lend. Government stimulus money could never take the place of lending as an economic stimulant.

The Philippines followed by spending a reasonable amount of public money in stimulus efforts, more as a way of showing that the government was standing by to assist the economy, rather than taking over the job of economic activity as the West did.

The Philippines lowered interest rates as a way to keep banking lending robust. The policy of the government has been successful in that economic activity has been strong and bank lending has continued throughout the last 12 months.

In Canada last month, the G-20 nations met to discuss future policy. Now the global situation has changed and the Philippines must change its thinking. The US intends to pursue the policy of continued government-backed stimulus by borrowing and printing money and increasing both the government’s budget deficit and its borrowings. Europe has made the decision to stop this stimulus policy and pursue austerity and a reduction of government spending, budget deficits and borrowing. This is a big deal.

With the US going in one direction and Europe in another, entirely opposite to each other, there is going to be a clash at some point. As the US is calling for a strong renminbi, it is in effect calling for a weaker dollar. Europe, on the other hand, is doing nothing to stop the euro from appreciating. The euro has appreciated from €1.20 to the dollar to standing now at €1.26. The US dollar index has fallen from nearly 89 to 84.1 in the same period.

The Philippine government keeps talking about the need sometime in the future to raise interest rates off these very low levels. The reason to raise interest rates is to avoid a situation where there is too much cheap money in the economy, causing inflation. But inflation forecasts for the country are very low. If low rates are good for the economy and there does not seem to be any bad side effects, then why raise rates? There aren’t any sound reasons to raise interest rates…for now.

The US wants low interest rates and a weak dollar to keep its government borrowing costs low and to be able to pay back its debt with cheap dollars. The world will tolerate this policy only so far. Foreign governments and financial institutions have seen the value of their dollar holdings drop in relation to their local currency, and that trend cannot go on forever.

At some point, countries, primarily China and Japan, are going to say that it is not in their best interests to keep funding the US government and economy with their dollars that keep becoming less and less valuable as they carry the US debt. China has already made clear that it will keep the option of bailing out and dumping dollars if this US government policy continues.

The Philippines is going to have to make a conscious decision to stay with the dollar and risk a dollar-depreciation disaster that would be seen as a huge spike in inflation, as imported goods like oil skyrocket. Alternatively, the Philippines will choose to chart its own economic-policy course.

Other Asean members are in the same situation. The combined foreign-exchange reserves of Singapore, Malaysia, Thailand, Indonesia and the Philippines have ballooned in the last two years. These countries are sitting on hundreds of billions of dollars, and those dollars are a potential disaster for their economies. From BusinessMirror: “The end-June reserves could cover nine months of imports of goods and payments of services and income, and were equivalent to 9.3 times the country’s short-term external debt based.” The Philippines is covered with dollars that no one may want in the future.

Now here is the dilemma. The Philippines should strengthen the peso by unloading some of its dollar reserves. Rather than raise interest rates, which are high in comparison to our neighbors and would not be necessarily beneficial to the economy, the government needs to sell dollars.

We cannot continue to wait and react. The government must decide if we are going to ride on the US government, economy and dollar. Or if we are going to plan and execute an independent economic policy.


E-mail comments to mangun@gmail.com. PSE stock-market information and technical analysis tools provided by CitisecOnline.com Inc.

Tuesday, 13 July 2010

TV5 surprises competition with backpack reporting

Manila Standard Today
http://www.manilastandardtoday.com/insideNews.htm?f=2010/july/12/news3.isx&d=2010/july/12

NEWCOMER TV5 has raised the bar in live reporting by introducing a camera that can broadcast live from anywhere and at any time using wireless broadband technology.

The station’s News5 Live Pack is a high-definition camera and transmitter setup that transmits from a regular backpack weighing 5 to 7 pounds, and can be carried by a single cameraman. It needs no broadcast van, and a cameraman riding pillion with a motorcyclist can transmit, say, pictures of a Tour of Luzon segment while it is happening.

TV5 surprised the competition when it aired high-quality video as it followed the Aquino convoy from Times Street in Quezon City to the Quirino Grandstand in Manila for President Benigno Aquino III’s inauguration—something that had never been done before on Philippine television.

A separate News5 Live Pack showed then Vice President-elect Binay inside the Manila Hotel preparing for his inauguration. Another News5 Live Pack carried live interviews from the crowd gathered in front of the Quirino Grandstand.

All these were accomplished without the use of old-style microwave vans and satellite trucks, which can cost P100 million for an OB van.

“Our News5 Live Pack puts us at the leading edge of TV news technology,” said Luchi Cruz Valdes, TV5 News and Information head.

“We are taking the reporting of news as it happens, from where it happens, to a new level.”

TV5 News Operations head DJ Sta. Ana added: “The News5 Live Pack gives us the ability to deploy news crews rapidly, and these news crews can remain highly mobile even as they are sending video back to base. These are things no other network can match at this time.”

News5 Live Packs were recently sent to Batac, Ilocos Norte, and Cebu City to cover breaking news. They are also being used daily to provide live updates on the traffic situation around Metro Manila within the TV5 morning show Sapul.

The network says that since it was acquired by the Pangilinan group, it has led the way in the use of new technology, such as touch-screen monitors and virtual graphics.