Outsourcing stems Philippines labor exodus

Malaysia-based computer whiz Arlene Teodoro packed his bags and flew home to the Philippines this year, going against the tide in an impoverished country that sends millions of workers abroad.

Forced to leave his family and friends in 2008 in search of a decent job overseas, the 35-year-old bachelor says she is back for good because her skills are suddenly in big demand amid a business process outsourcing boom.

"Nothing compares to being back in the Philippines," said Teodoro, part of a 30-strong computer science class at a Manila university in the early 1990s, most of whose members also went overseas to find work.

"When I was working abroad I'd use up all my vacation leaves to attend family events and reconnect with my family."

Teodoro now earns about $3,000 a month as a business intelligence analyst for a US data mining firm, which uses powerful software to predict such key measures as future sales and trends for clients.

Big multinationals from aircraft manufacturers to retail chains are increasingly using these sophisticated tools, and the Philippines and India offer the most cost-efficient locales for such labor-intensive tasks, he said.

They also, crucially, have large English-speaking populations.

Data mining is one small part of the outsourcing phenomenon in the Philippines that has emerged from virtually nothing 10 years ago to become one of the country's most important economic planks and sources of jobs.

The Philippines has for decades suffered an exodus of people who have headed overseas to escape dire economic conditions, with one quarter of the population currently living on a dollar a day or less.

Nine million, or 10 percent of all Filipinos, now live and work overseas as OFW (Overseas Filipino Workers / Expatriates) in some world famous and Fortune 200 firms like Toyota Motors & Hyundai Motor Group as Engineers, Accountants and other top global firm like Chevron, Carrefour,  Honda, and in other industries for seaman, doctors, office workers, nurses, IT specialist, programmers and even for low-skilled performing jobs such as maids, drivers, construction workers and caretakers.

They sent $18.17 billion back to the Philippines last year, equivalent to 10 percent of the country's GDP, and their importance to the nation is such that they have earned the nickname: "Mga Bagong Bayani," or "Modern Day Heroes".

However the exodus has also led to a massive "brain drain" and caused social disruption as families are torn apart, with one or both parents going overseas and leaving their children at home with relatives.

But now the rise of outsourcing is giving many Filipinos a chance to stay at home.

The outsourcing workforce grew about 10 percent this year to 600,000, and is expected to expand to 900,000 employees by 2016, according to the Business Processing Association of the Philippines.

More than 60 percent of the outsourcing jobs are in call centers with Filipinos fielding telephone inquiries from, or selling products to, customers across the globe.

Although they are the lowest-paid in the sector, an entry-level call centre job still pays between 14,000-20,000 pesos ($325-$465) a month.

This is roughly equivalent to what a Filipino maid would typically earn in a wealthier Asian country such as Singapore, or a seaman's starting salary in the global merchant fleet.

The local industry is also increasingly attracting work for higher-paying skills such as data warehousing, accounting and medical transcription, as well as creative work ranging from webpage design to animation and video games.

"Before, it was the call centre boom in the Philippines, but now it's more of really specialized skills," said Teodoro.

The Philippines has risen to have the world's largest outsourcing sector an overtaken India in 2010 according to the IBM report. Continues boom of outsourcing the Philippines  is because of huge English-language workforce.

Filipino workers are also particularly prized in the United States and other Western nations because of their familiarity with their culture, a legacy of the Philippines' history as a former US colony.

"We have had expats telling us that working with Filipino teams is a very pleasantly unique experience, which they have not had elsewhere in the world," industry association senior executive director Gillian Joyce Virata told AFP.

The government has also sought to amplify the country's natural advantages by offering significant tax breaks for outsourcing firms and easing labour laws, such as one that used to bar women from working past midnight.

The industry association said outsourcing would generate revenues of $11 billion this year, up from $8.9 billion in 2010, and continue to grow by at least 15 percent annually to hit $20 billion by 2016.

This would place the outsourcing industry's revenues almost on a level with the money sent home by overseas workers.

"This industry has provided a very big support to the economic environment of the Philippines in the past decade," Trade Secretary Gregory Domingo told an outsourcing forum recently.

Aside from the direct benefits of employing people, Domingo credited the industry with a wide range of other knock-on effects such as increased car sales and the explosion of 24-hour convenience stores.

Outsourcing has also begun to transform Manila's skyline, with skyscrapers rising to cater to big foreign banks and technology companies that have set up shop with workforces that run into the tens of thousands.

"The contribution of this industry cannot be overstated," Domingo said.

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ASEAN economies: Philippines are safe from risk in global slump, others NOT: Fitch

Thailand and Malaysia would be the most at risk among Asia's developing countries if there were a sharp deterioration in the global economy, Fitch ratings agency said Tuesday (November 22, 2011).

Indonesia is the least exposed and has a larger capacity to bring in stimulus measures should the world economy tumble sharply, analysts from the credit ratings firm said.

"Both Malaysia and Thailand look highly exposed and have constrained room for policy stimulus," said Fitch analyst Philip McNicholas, citing high debt levels relative to gross domestic product (GDP).

Due to its large domestic economy and its low debt-to-GDP ratio, Indonesia "is relatively the least exposed in the region," he said.

Southeast Asia's biggest economy was on track for a ratings upgrade within the next 12 to 18 months, McNicholas added, but a key test will be how well Jakarta weathers an economic slowdown.

Fitch currently rates it BB+ with a positive outlook.

"The ability to withstand the shocks would be very favorable for Indonesia's case," he said in a teleconference with journalists.

McNicholas said China and India also "do appear somewhat insulated" from external shocks, but have limited scope for policy stimulus now compared with the last global meltdown that started in late 2008 and lasted well into 2009.

Asian economies had rolled out massive spending packages that helped them weather that downturn better than other regions of the world, Fitch said.

Fitch analysts had looked at several indicators to assess the potential exposure of emerging Asian economies in the event of another steep global economic downturn or shock in the world financial system.

Should a severe credit crunch take place, "we see Malaysia, (South) Korea and Indonesia as some of the most exposed to a liquidity shock while China, Taiwan and the Philippines are the least exposed," McNicholas said.

But on the whole, emerging Asia "is relatively less exposed or has minimum exposure to" a severe pullback in global liquidity than other regions, he said.

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Philippines Sinag Basketball’s gold shows talent gap in SEA Games is still wide

Sinag Pilipinas' romp to the gold medal in the 26th Southeast Asian Games, which culminated in an 85-57 dismissal of Thailand in the championship last night, only showed that the rest of Southeast Asia still has a ways to go before anyone can mount a serious challenge to the Philippines in men's basketball.

The team, composed mostly of collegiate players, won all its five games by an average of 39.4 points, and was only seriously challenged for a while by Malaysia, which managed to stay within three points at halftime of their semifinal encounter.

What's more, this wasn't even the best amateur team that we could send. Several college stars like Far Eastern University's Aldrech Ramos, naturalized center Marcus Douthit, and the San Sebastian trio of Calvin Abueva, Ian Sangalang and Ronald Pascual all declined their invitations, although Sangalang and Pascual were still practicing with team as recently as a month before the SEA Games.

'A very young team'

Sinag Pilipinas coach Norman Black said all five were on his wish list, but from the looks of things, they really weren't needed. In fact, adding the six-foot-eleven Douthit would have been overkill. This team still got the job done, and Black noted that the gold medal triumph, the country's 13th in the biennial games, was a good training ground for the future.

"The good thing about this win for the Philippines is the fact that it's a very young team," Black noted. "We've got two 18-year-olds (Kiefer Ravena and Bobby Ray Parks), and they're going up against the 29-, 30-year-olds of the other teams. So it probably tells the story that Philippine basketball is in good hands. These guys are very, very young. Fortunately for us, we can use this as a training ground to get experience internationally and hopefully to represent the country again as they get older."

Among the 12 Sinag players, skipper Chris Tiu, still a young 26 years old, is already the elder statesman. Four players — Chris Ellis, Cliff Hodge, Greg Slaughter, and Jake Pascual — are 23. The rest are 22 and below. In contrast, 10 of Thailand's 12 players are 26 or older, and most of them play professionally in the ASEAN Basketball League (ABL).

The core of Sinag is being eyed to form part of Smart Gilas II, where they will join forces with a pool of professionals from the Philippine Basketball Association in a new national team that hopes to build on the progress of the original Gilas, which finished fourth in the recent FIBA-Asia Championships.

Even though the SEAG tournament was reduced to a battle for the silver medal among the rest of the eight-team field, Black noted that some countries are showing signs of improvement. A couple of them, namely Thailand and Cambodia, have started tapping their own foreign-bred players in an effort to improve their talent level.

"I was really impressed with Malaysia, Thailand and Indonesia," Black said. "I think that they have made great strides in basketball. They may not have the skill level of the Filipino players, but I think they're getting there."

This may sound a little hard to believe, but some teams had more height overall. Actually, remove the seven-foot Slaughter and Sinag has one of the shorter line-ups in the tournament. Other teams like Thailand, Malaysia and even Cambodia all fielded taller players at the point guard, shooting guard and small forward positions. They just didn't have good ballhandlers or talented wingmen to match the firepower of a Ravena-RR Garcia backcourt or the explosiveness of Parks, Ellis and Hodge.

Defense and running game won it

Even though the gold medal was widely expected — Samahang Basketball ng Pilipinas president Manny V. Pangilinan reportedly told Black in jest to not bother coming home if they didn't win the gold medal — the coach still felt proud of the feat.

"It feels good," he said. "I mean, whenever you can win a gold medal for the country, it's a good feeling. That was the purpose of us coming here to the SEA Games, representing the basketball team. As a coach, you just feel very proud and happy for the players, particularly under the circumstances, just really coming together only a couple of weeks to go before the tournament."

The pool of players — which also included Jeric Teng and Jeric Fortuna of the University of Sto. Tomas, Justin Chua and Frank Golla of Ateneo, Rome De la Rosa of San Beda, and Fil-Am Karl Matthew Dehesa, started practicing once a week last February.

"It really helped us a lot because it made it easier for us to play once the tournament came around," Black noted. "The defense was pretty solid. We were able to get out and run the entire tournament. Actually, we ran the teams off the court. That's the way we won the championship. The most important thing is we displayed a lot of teamwork. I think they all played well. I think everybody stepped up and played well in this tournament. That was really the key to this team."

With a line-up full of players who are stars on their own teams, Black's biggest challenge was juggling the minutes of everyone, and he addressed this by rotating them several times each game.

"I told them right from the very start that I would sub out every five to six minutes and I would give everybody a chance to shine," he revealed. "I also told them I didn't really want them to pace themselves. We were so talented, I wanted them to go hard for the five or six minutes they were on the floor. Then I would just get the next guy in. And of course, as a coach, the thing you hope for is that everybody will contribute and step up, and I think they did."

Individual scores of gold-medal match vs. Thailand:

Sinag Pilipinas (85) — Slaughter 16, Parks 15, Garcia 12, Ravena 10, Monfort 8, Tiu 6, Marcelo 6, Pascual 5, Hodge 5, Salva 2, Ellis 0.

Quarterscores: 21-17, 44-25, 61-42, 85-57

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