IT is considered as the lifesaver of the Philippine economy, bringing in billions of dollars in investment and revenue, and also helping create thousands of jobs for newly graduating Filipinos.
And now more good tidings come on the back of news that the rapid expansion of the Information Technology and business process outsourcing industry (IT-BPO) in the Philippines has surpassed even the most optimistic forecasts, because of the exemplary public-private partnership (PPP) this key sector demonstrated.
The Business Processing Association of the Philippines (BPAP) in its most recent report released data about the local IT-BPO sector’s outstanding performance in 2011—and its makes impressive reading indeed.
With a total of $11 billion in revenue (an increase of 24 percent on the previous year) and 638,000 call center employees (an increase of 22 percent than in 2010), the industry is far surpassing its projected 20-percent annual growth rate.
At these rates, according to the BPAP, the IT-BPO industry in the Philippines will bring in a staggering $25 billion a year by 2016, making up 9 percent of the Philippine’s GDP, 10 percent of the sector’s global market share and employing 1.3 million Filipinos.
Adding his own praise to the phenomenal and highly visible progress made in the BPO industry, Sen. Edgardo Angara, vice chair of the Senate Finance Committee commented, “In such a short time, the IT-BPO industry has become one of the biggest job-creators in the country. In the past decade, the sector has grown exponentially in terms of workforce and income generation, from a fledgling subsector of the service industry to a multibillion dollar earner.”
The next step, according to Angara, is to ensure the continued progress of the industry through combined efforts from the government and private sector.
“The success of this industry in our country is a perfect example of how the private sector and the concerned government agencies can work together and share their resources towards a common goal. Because of this united effort, the Philippines is now a close second to India as the world’s largest BPO provider,” said the veteran lawmaker.
Just this year alone, several grants and subsidies have been given by the different agencies and institutions, all earmarked for educational and technical development of the BPO sector.
Among them is a grant of $650,000 (P27.3 million) given by the Asian Development Bank in technical assistance for educational programs for skills enhancement in the BPO sector.
Furthermore, a P450-million subsidy has been given by the Technical Education and Skills Development Authority for training, while the Information and Communication Technology Office under the Department of Science and Technology has allocated P350 million to support the IT-BPO industry.
State universities around the country have also been granted a combined budget of P125 million to fund their various IT-PBO based programs.
“We must maintain our country’s foothold in this booming global industry,” said Angara, a former president of the University of the Philippines.
He added, “IT-BPO might very well be the spark that sets off the Philippines’ economic boom.”
Friday, 5 October 2012
Diane Claire J. Jiao BusinessWorld http://www.bworldonline.com/content.php?section=TopStory&title=New-processes-to-take-effect-next-year-at-BIR&id=59571 THE FIRST STAGE of a planned modernization of key tax processes will be implemented by mid-2013, the chief of the Bureau of Internal Revenue (BIR) said, with a full rollout scheduled for the following year. “Phase 1 of the process reengineering is slated for July 2013, while Phase 2 is in 2014. This will simplify and computerize the main transactions with the bureau,” BIR Commissioner Kim S. Jacinto-Henares yesterday said at a forum organized by the Financial Executives Institute of the Philippines. “Once the processes are electronic, they will be standardized across the country. Taxpayers will have to follow the same requirements and procedures whether they apply in Metro Manila or in the provinces,” she added. All businesses will be able to apply for their certificates of registration electronically by next year. Data will be encoded by taxpayers online and the document will be delivered to them once the BIR gives its approval. The courier will take pictures of the firm’s office to ensure that it is a real entity. Coordinates will also be plotted for future tax-mapping operations. “This will target the modus operandi of creating dummy companies,” Ms. Henares said. Another reform involves accrediting printers of invoices -- which will have an expiration date tentatively pegged at five years. Also, the BIR will computerize the issuance of documents such as the Certificate Authorizing Registration, a prerequisite to the transfer or sale of land, buildings or shares of stock. It indicates that a taxpayer has paid the necessary donor’s or capital gains tax. The Authority to Release Imported Goods will likewise be processed electronically, with the BIR transmitting the document directly to the Bureau of Customs to prevent falsification. These reforms add to plans earlier detailed by Ms. Henares to move tax identification number applications online. The end-goal, she said, is for every taxpayer to have an electronic tax folder containing all relevant documents such as certificates, returns, payments and communications with the bureau.
OUTSIDE THE BOX
THERE is nothing wrong with being proud of your accomplishments although the Catholic Church considers “pride” as a serious transgression. Perhaps a more appropriate word would be “hubris.” Hubris is defined as extreme pride or self-confidence. The original Greek word used by playwrights of Greek tragedies was used to describe excessive pride toward or defying the gods leading to a nemesis, a being or situation that cannot be overcome and leads to one’s downfall.
Greek gods did not look kindly on mere mortals who had an arrogant attitude. In common usage, hubris was used to describe someone who in victory unnecessarily shamed or humiliated his opponent and thereby brought shame and ruin on himself.
Countries fall victim to the sin of hubris also. In 1989 an essay was published, later becoming a book, entitled The Japan that can say no, authored by then-Japanese Minister of Transportation Shintaro Ishihara, and Sony Corp. founder Akio Morita. The essay portrayed Japan as a country that had come out from under US dominance and, as a superior nation, would soon eclipse US economic power. Coincidentally, that was probably the peak of Japan being an economic powerhouse. A newer version would probably be called, “The Japan that cannot grow.”
A decade later, China began its phenomenal economic expansion assuming that it could do no wrong and could steamroll the Western economies, particularly the US. While that may be true to a certain extent, in 2012 China is faced with the fact that over 50,000 factories exporting goods to the West have closed in the Guangdong region. China is proud of the fact that it is sitting on a couple of trillion dollars of US debt and $3.2 trillion in international reserves. Yet while selling that debt and those dollars might cause harm to the US and global economy, the financial loss to China would bring a special meaning to “shooting yourself in the foot.”
The Western countries invented the word hubris and raised overconfidence to a new level, not unlike a wealthy taipan at the casino who winds up with nothing left and deeply in debt.
Is the Philippines reaching beyond pride of accomplishment to the dangerous area of hubris?
Chief economist for Asia Pacific at Citi Johanna Chua has some interesting thoughts on the growth of Philippine international reserves now at over $80 billion, the largest in the region following China. The international reserves that a country holds are an important tool to protect the currency and economy from instability as well as to fund import purchases. It is like money in the bank for a rainy day. The government has paraded PHL reserves as an indication of good economic policy. However, the reality is that, to use Ms. Chua’s term, excessive reserves are not necessarily healthy. Those dollars the government is holding were purchased by selling pesos. Those pesos inflate the domestic money supply. To “sterilize” the potential inflation problems of these additional pesos, the Bangko Sentral forces banks to deposit more pesos with the BSP on which the BSP pays interest. Sure, strong reserves are important, but balance and moderation are equally important.
Another problem with hubris is that judgment and priorities can become clouded. The cybercrime law is an important piece of legislation. It should have simply addressed economic concerns with the strengthening of PHL data security laws. But well enough could not be left alone and provisions unrelated to data-security were included and now a major controversy has exploded, further confusing and bringing uncertainty and inconsistency to Philippine lawmaking.
The government has not addressed the fiscal matters regarding the very important mining industry. The government has not addressed a rationalization of investment incentives and taxation. The government has not addressed any significant measures to bring more foreign investment into this country.
Overexcited pride almost always leads to an exaggerated sense of accomplishment. Minor improvements are seen as monumental advances forward; and inflated opinion of one’s successes. Every time a global bank or broker raises economic growth expectations, you can see the government basking in the glory like a tourist lying on a sunny beach in Boracay. The fact is that PHL economic growth is barely keeping the country’s collective head above water and not drowning. Five- percent economic growth will make major inroads into poverty reduction in about 30 years.
The country is not moving forward fast enough to warrant any thoughts of great accomplishments being made. To feel that way is nothing more than hubris. And we know exactly what happens when there is too much pride.
E-mail to firstname.lastname@example.org, web site is www.mangunonmarkets.com, and Twitter @mangunonmarkets. PSE stock-market information and technical analysis tools provided by COL Financial Group Inc.