At the start of the Covid-19 pandemic, many office buildings turned into empty ghost offices after companies implemented the mandate on work-from-home. At this point, it seems that a good number of Philippine businesses are slowly returning staff to offices this year and could possibly go on full workforce in the coming year. Let’s take a look at the future work trends and the forthcoming prospects for the outsourcing industry.
Continued and Increased Office Demand
Despite the challenges brought on by the pandemic, companies still pursue their search in finding office spaces around the country. Business leaders are looking forward to allowing their employees to return to work by next year with about 65% expecting to bring back some normalcy to in-office operations. According to a released brief on the property market in Metro Manila by real estate firm Colliers, 34% of businesses expect to return half of their staff to the office by the third quarter of 2021 while 31% anticipate full staff by next year.
Leechiu Property Consultants (LPC), a real estate brokerage firm, stated that a surge in office demand was reported in the last quarter of 2022, citing a 38% surge despite the challenges in the real estate market. Chief Executive Officer for LPC, David Leechiu also said that Information Technology and Business Process Management (IT-BPM) will see a significant increase in office demand until the end of the year.
Outsourcing Remains a Solution to Recover
Business forecast for the IT-BPM industry remains encouraging as it upholds its position as the main progress catalyst of the office segment. Provided that outsourcing continues to be a working solution for Western firms to recover, the industry is on a good path. When Philippine Offshore Gaming Operators (POGO) abandoned office spaces in the third quarter of 2021, Metro Manila recorded the worst performance in office vacancy and is expected to drag down and break record levels.
Meanwhile, the Bureau of Internal Revenue (BIR) has recently released Republic Act 11590, wherein it now requires offshore gaming operators to pay a five percent tax on their gross revenue in gaming. Under the RA, POGOs will be subjected to penalties should they fail to register for tax registration and/or payment. Workers will now shoulder a 25% withholding tax from their gross income.
Philippines Experiences Economic Growth
Stakeholders who have investments with The Philippine Economic Zone Authority (PEZA) have gainfully contributed to help increase the country’s exports by 20% last September. Notably, this has even exceeded the growth rates before the pandemic.
Department of Trade and Industry (DTI) Secretary Ramon Lopez attributes the country’s economic growth rate to brave investors. The Philippines enjoyed a 7% growth in the third quarter, 12% in the second quarter, as well as a 49% growth in its GDP. In this sense, government agencies remain hopeful as it urges more foreign investments in the Philippines.
The Board of Investments (BOI) is wooing Japanese companies to invest in the country’s medical device manufacturing industry. BOI service director Evariste Cagatan lauded several factors that make the Philippines an ideal place :
- competitive world-class electronics industry
- ready access to key markets
- abundant intellectual talent
- Ultra-cost effective performance and productivity
Joey Salceda, chairperson of the House Ways and Means Committee has requested DTI to wrap up its Strategic Investment Priorities Plan before March 2022. SIPP is a list of eligible sectors for the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act that provides companies from overseas with a clear sense of the benefits they reap once they open their operations in the Philippines.
The Philippines is Approaching Economic Recovery
Based on the International COVID-19 Recovery Index conducted by Nikkei Asia, the country has claimed the 57th spot out of 120 countries. This ties the Philippines with Malaysia, Norway, and Tajikistan. The remarkable movement is mainly credited to the Philippines’ increase in infection management scores. Research consultant GlobalSource Partners says that the forecast for the country’s GDP could boost an increase of up to 5.5% this year, citing pre-pandemic recovery by year-end.
Some Covid-19 resolutions have rendered much confusion for companies who are looking to bring their workforce back to the office. BPO labor BIEN Pilipinas together with the House Committee on Labor and Employment are both pushing for the suspension of unclear resolutions requiring on-site employees to submit to full vaccination prior to returning to work.
BIEN Pilipinas president Mylene Cabalona called on the Inter-Agency Task Force for the Management of Emerging Infectious Diseases (IATF) to contemplate on the impact of its resolutions on workers’ lives. Regardless of whether employees have vaccinations or not, Cabalona urges outsourcing companies to shoulder the costs of RT-PCR swab tests as everyone is considered a potential Covid carrier.