Welcome Address to President Benigno S. Aquino III
By BPAP Chairman Alfredo I. Ayala at the
International Outsourcing Summit
October 9, 2012
- His Excellency, President Benigno S. Aquino III, distinguished members of the Cabinet and Government, ladies and gentlemen
- On behalf of BPAP and its partner associations, the Animation Council of the Philippines, the Contact Center Association of the Philippines, the Game Developers Association of the Philippines, the Healthcare Information Management Outsourcing Association of the Philippines, and the Philippine Software Industry Association; as well as the National ICT Confederation of the Philippines, please allow me to warmly welcome you to the 4th International Outsourcing Summit.
- Mr. President, we have 3 main messages for you: Thank You, So Far So Good, …But There’s a Long Way For Us to Go.
- Why Thank You? When you joined us at the last IOS almost exactly a year ago, we invited you to take our government-industry partnership to a whole new level, and forge an “IPPP” or an Industry Public Private Partnership, which maximizes the potential of an entire industry.
- You and your Cabinet responded by vigorously embracing our Road Map 2016, which we show on the screen, and following up with real team work, specific programs and meaningful budget allocations.
- Your support helped the industry to achieve 24% growth in 2011, to $11 B in revenues and 638K direct employees, and projections of a further 20+% growth this year to $13.4B and approximately 780K direct employees.
- This is why we are saying So Far So Good, as we believe we have made good progress towards achieving the Stretch Goals of our Roadmap 2016:
- Becoming the world’s #1 destination not just for Call Centers, but for other select non voice segments of IT-BPO as well
- Increasing direct employees to 1.3 mm, and indirect jobs to 3.2 mm, for a total of 4.5 million jobs, and
- With regards to our 3rd point that There’s a Long Way for Us to Go, we thought it would be instructive to share with you the top concerns of our members in a survey we took this August right after the floods, and compare this with our last survey immediately after Typhoon Ondoy in 2009.
- In our latest survey, the #1 concern is overwhelmingly the Tight Labor Market (with those listing this as their top concern worsening from 23% to 49%), followed by #2 Susceptibility to Calamity (up from #5 in 2009), then #3 Competition from Other Countries (up from #6), then #4 Government Corruption (the good news is that is down from #2). Clearly, there has been a dramatic improvement in the perception of corruption in government.
- Our members’ concerns boil down to 3 key themes: Talent, Risk and Cost. The good news is that our IPPP is already working on all 3.
- In the first area of Talent, we have made substantial progress. With approximately ₱600M in funding from TESDA, CHED, and the DOST-ICTO, significant scale has been achieved this year in various training and educational programs which will impact almost 100,000 students, and >7,000 teachers and trainers, with these teachers able to teach >50,000 students annually once they are certified on BPAP programs.
- We expect that 70% of program graduates will be employed by our industry.
- Allow me to summarize some other highlights: Secretary Villanueva’s Near Hire Training Program or iTWSP is working well, Secretary Licuanan was able to approve Service Management, a new minor geared towards IT-BPO, in record time, with 3 colleges already piloting it, and Secretary Montejo’s ICTO has been very effective with its Next Wave Cities program where it partners with the NICP to promote our industry, including to students and parents.
- Next year, we anticipate even more impact as these programs are rolled out further, and as we work with DepEd to introduce our curriculum to Grades 11 and 12.
- In the 2nd key area of Risk, or Business Environment, we have all benefited from the initiatives of the government to reduce corruption at both the national level and the local level, where the late and much loved Secretary Jesse introduced many positive initiatives. We also welcomed the signing into law of the Data Privacy Act and the Anti-Cybercrime Act which both definitely make it easier to do business here.
- One of the areas where there is most room for improvement is the natural calamity front. The government is already working on this, and in the mean time, we are committed to stepping up our coordination with government to better ensure the safety of all our workers.
- In the 3rd main area of concern, Cost, it is critical that our competitiveness versus other countries does not erode. One of our top concerns is the appreciation of the Peso versus the Indian Rupee by 25% since early 2010 when both currencies were at parity of about Pesos 46 to the dollar. The Rupee has since depreciated to 52 while the Peso has appreciated to almost 41.
- We understand of course that the exchange rate is set by the market, but we hope that the government can continue its efforts to reduce very high power costs and creeping wage inflation, in order to help offset the appreciating peso.
- It is also very important that we maintain a predictable and stable incentives regime; PEZA has worked very well and it is absolutely critical that PEZA retains its incentives and its good governance oversight over IT-BPO PEZA locators if we are to remain competitive with the many other countries targeting this industry.
- Of course, what lies ahead of us are not just concerns but also opportunities. We are even more confident now that there are many opportunities to move up the value chain, including in targeted segments of the Software, Digital, Healthcare, F&A, HR, Shared Services and Creative (e.g. Animation and Gaming) Industries, and geographies outside the US. Both Sec. Domingo and Sec. Montejo have been very supportive as we design the roadmaps for each of these sectors, and as we step up our marketing overseas.
- In closing, we are very pleased with the progress of our Industry Public Private Partnership, but there is still a lot of work ahead for all of us.
- This work is well worth it, when we consider what is truly at stake. As you very aptly reminded us at the recent International Contact Center Conference:
“ ...Government and private enterprise [are] working together to endow the Filipino people with the skills they need to succeed, and in so doing, empower them..I believe that everything we are doing serves a more meaningful purpose: to create more and more opportunities for all Filipinos. ...Behind each success story and achievement...are thousands more Filipinos who are earning a dignified and comfortable living, more Filipinos who are able to send their children or siblings to school, and more Filipinos who are given the chance to find the path to their success.”
- Mr. President, welcome to the IOS.
Click the image to zoom in.