business

New Exodus

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[By Erick A. Fabian] 

The Philippines has the best call center agents in the world. We shouldn’t be surprised when they are pirated by companies in Singapore, Malaysia and Thailand come ASEAN 2015.

All the foreign firms have to do is offer them better salaries and security of tenure.

There is one thing the government can’t stop — the continuous brain-drain of Filipino professionals which has been happening for several decades.

It started with our scientists. Then the doctors, nurses, teachers, and information technology professionals followed.

For a country relying on manpower as a major source of revenue, we will soon find ourselves empty-handed.

There is no question as to the competence of Filipino business processing operations (BPO) or call center employees. Being a former American colony for 50 years, the Philippines has produced a large pool of fluent English speakers.

Ability to mimic

Even India conceded when its BPO companies moved 70 percent of their operations here recently. Companies worldwide have attested to the Filipino’s natural ability to mimic a neutral, easy-to-understand Western accent.

With most of our industries outflanked by their counterparts in other Asian countries, the BPO industry is one of the most promising saviors of the Philippine economy.

Offshore business processing is expected to double its multi-billion dollar earnings in 2015, due to rising demand in the global economy.

As ASEAN 2015 looms, the emerging economies of Thailand, Indonesia and Vietnam will be joining the BPO bandwagon.

International investors keep complaining about the corruption, infrastructure, and the difficulty of setting up a business here, seen as a major bottleneck for would-be BPOs.

We cannot blame Filipino call center employees if they eventually move abroad. There is nothing wrong with prioritizing your family’s needs, and a better offer is always tempting.

New players

Fresh graduates of electronics communications engineering from provincial colleges are already getting offers of double compensation abroad. BPO agents will soon follow suit, because investors will find fertile ground in other Asian countries.

In fact, even military junta-ruled Myanmar is loosening up policies so foreign investors will be attracted to come and stay. The current regime at least had the sensibility to admit that they need a lot of foreign investor money to sustain their country’s economy.

US-based BPOs are here simply because the costs are much lower, and the return on investment more than makes up for the initial capital of setting up a new operation.

But more and more Filipino professionals are slowly trickling into Thailand and Vietnam, buoyed by their innate English language proficiency.

A 2013 ZDNET.com report by finance analyst Ryan Huang confirms that the Thai call center industry is pulling up its sleeves to challenge BPO heavyweights Philippines and India.

Gray area

Internet speed is the lifeblood of the BPO industry, and yet the Philippines has one of the slowest Internet speeds in Asia. This is what they call the digital divide: the one who gets the information first wins.

The country has supplied the initial amount of exceptional BPO employees, but it is now becoming more obvious that we cannot respond to the skyrocketing demand.

The availability of foreign BPO companies here is a drop in the bucket. There are more than three million eligible but unemployed Filipinos. The call center industry can only employ around 600,000.

There are recent reports of Filipino professionals doing well in Indonesia, Thailand and Vietnam. A quick sweep of online job listings shows random lists of companies in Asian countries recruiting Filipino call center agents with offers of better salaries and working conditions.

One gray area is that law enforcement can’t even ensure the safety of BPO workers in Makati and Ortigas who mostly work at night. Recent accounts of mugging and other crimes against call center workers abound.

Whether the government and the BPO industry can get their acts together is another story.

King of ‘Endo’

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By Miguel Raymundo

The country celebrates Labor Day this week to honor the working class. Sharing the labor front’s woes, OpinYon finds it fitting to tell how dishonored labor made Henry Sy the richest man in this country. This is the story of Ligaya Cruz.

As she walked past SM mall in Makati city, a bitter memory flashed through her mind.

Over a decade ago, Ligaya Cruz and other mall workers were brutally dispersed by the mall’s security guards aided by some baton-wielding policemen for picketing.

She later suffered a miscarriage.

Like their colleagues in other strike-plagued SM branches in Metro Manila then, they protested the so-called “555” – the insidious practice of mall owner, ethnic Chinese taipan Henry Sy, to renew workers’ contracts every five months or after so-called “end of contracts.”

Also referred to as “endo,” such scheme of hiring and firing workers has become alarming across many key industries, specifically in SM, the nation’s largest mall operator.

Ever shrewd that he is, Sy has been resorting to contractualization, obviously to skip labor laws which provide a six-month minimum contract to entitle the workers to certain monetary benefits, including leaves with pay, and the right to join unions.

In 2003 alone, SM employed 20,000 contract workers, the biggest on record by a single retail-based company. That number has since ballooned to over 30,000 now as the tycoon diversified his  money-spinning businesses — ranging from retail to property, banking and finance and tourism infrastructure.

 

Wealth Means Crime

The figures undoubtedly make Sy as the nation’s undisputed king of contractualization, lending credence to widely-held beliefs that for every great wealth, there’s a great crime behind.

Altogether, Sy –the nation’s richest businessman — personifies sheer capitalist greed coupled with a freeloading mindset, casting doubts on his often-told rags-to-riches story.

Not surprising why critics label Sy as the ethnic Chinese tycoon who built his mall empire on the blood and sweat of slave labor, particularly women.

More often than not and with impunity, their contracts are terminated without notice even during peak shopping seasons such as Christmas and school opening, thus the flurry of strikes hounding SM over the past years.

Job contractualization, which has turned the Philippines into a nation of cheap labor, began during the Marcos dictatorship of 1970s-mid-1980s when a decree was signed allowing companies to hire workers on contract for special work.

 

Tenure Versus Contractualization

Amid intense lobbying by profit-hungry business elites, the job contracting scheme has been institutionalized – and legalized — in the succeeding administrations as an integral part of the country’s Labor Code, allowing labor contracting and sub-contracting.

Despite the legal cover, contractualization is considered as labor’s greatest menace.

Paradoxically, while it fattens an employer’s income, it deprives those hired of job security, better pay, benefits and allowances and union rights.

After busting the militant employees’ union at SM in 2003, Sy has since banned labor activities across its malls and department stores. Any sign of union organizing effort among employees is immediately met with sanction or outright termination.

 

Amid rising restiveness in the labor sector, not a few lawmakers have proposed passage of House Bill 5110, or An Act Strengthening the Workers’ Security of Tenure. It noted that there are millions of skilled and talented Filipinos in the labor force today who don’t have regular jobs. They are forever trapped in the vicious cycle of grinding poverty.

 

Jobs Abroad

Daily, some 6,000 Filipinos leave at Manila’s ports to look for jobs abroad, no matter the slave-like working conditions awaiting them in foreign lands.

Attempts by labor leaders to muster political support for the bill fell on deaf ears.

Last year on the eve of Labor Day on May 1, they asked President Aquino to certify the long-stalled bill as urgent.

To their dismay, Aquino thumbed down the request, arguing that the bill—if approved – would pose more harm than good to his much-ballyhooed job-creation program.

“Companies might hesitate to hire because of certain provisions and therefore, deprive our workers of the opportunity to gain employment, “he argued.

To Aquino, he reckoned that should the bill become a law, only 1.8 million would benefit, while an estimated 10 million Filipinos could lose their jobs. His figures run counter to the faceless and countless multitudes of jobless Filipinos.

 

Aquino Pro-Capitalist

In reaction, labor leaders warned that as long as President Aquino sides with the capitalists at workers’ expense, this country will continue to wallow into the mire of poverty.

“Our already constrained wages have remained stagnated since Aquino came into power,” they said, adding that regular jobs have become very scarce.

Worse, the increase in contributions to the Social Security System and PhilHealth had added a financial burden to the lowly paid workers in the midst of surging poverty level.

Another adverse factor which could diminish the workers’ purchasing power is the impending hike in the price of liquefied petroleum gas and electricity and the transport fares of state-run Metro Rail Transit and Light Rail Transit in Metro Manila.

“All these are detrimental to ordinary wage-earners as the government continues to sacrifice our welfare in the altar of corporate interests and has remained inutile to our most pressing concerns,” the Bukluran ng Manggagawang Pilipino (BMP) said in a statement.

 

Political Will

Summing up, the militant labor group noted that “the past three and a half years have opened our eyes to the painful truth that the Aquino government is undeniably anti-worker to its very core.”

As contractualization persists, there’s no denying that overall, it only led to a sharp decline of the Filipino workers’ level of productivity, one of the lowest in the Asean region.

Added to a dehumanizing pay scale and the government’s neglect of their plight, no wonder why labor has increasingly turned to militancy, driving away potential investors.

This explains why job-creating foreign direct investments had shied away from the Philippines, not to mention its excessive tax rates, leading to a jobless economic growth.

These days, bureaucrats boast that the economy is one of Asia’s fastest-growing and yet inexplicably, jobs and other income-earning opportunities had become increasingly next to impossible to find.

 

The hard reality is that unemployment rate rose to 27.5 percent, or an estimated 12.1 million, as 2.5 million Filipinos joined the ranks of the jobless between September and December last year.

The unemployment rate soared even as the economy surprisingly grew 7.2 percent, the second-fastest after China’s, showing that the economic growth was not inclusive.

Three labor groups—Trade Union Congress of the Philippines, Partido ng Manggagawa and Kilusang Mayo Uno — warned that “jobless economic growth” would continue unless the evil of contractualization is decisively addressed with political will.

 

The harder reality is, the likes of Henry Sy, mega-investors and rags-to-multi-billion American dollar wealthy, have taken control over government.They have the power to order Congress to craft laws intended to exploit labor and the natural wealth of the country.

Their likes can bend laws and corrupt people in the courts of justice and “rob” farmlands from poor peasants. Worst, they make even the President their puppet,while burying the Filipino in deeper poverty.

 

National Food Fair Part 2 On December 2014

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The Department of Trade and Industry (DTI) is set to organize two editions of the Sikat Pinoy National Food Fair (NFF) this year. The first one just finished last March 26 to 30 while the second edition is on December 3 to 7, in time for the Christmas season.

DTI sees a big potential in the food sector for generating employment and developing various backward and forward linkages aside from attracting wholesale and retail buyers.

“Trade fairs have been and by far, DTI’s most effective promotions strategy especially for food products. It must be noted that 50% of MSMEs belongs to the food and beverage sector. In addition, the food sector has tremendous potential to generate employment. So the DTI Sikat Pinoy National Food Fair allows us to focus on the sector where we have a competitive advantage,” DTI Secretary Gregory Domingo said during the opening ceremony on March 26.

In its March event, DTI, through the Bureau of Domestic Trade (BDT), in cooperation with DTI Regional and Provincial Offices and the Bureau of Fisheries and Aquatic Resources (BFAR), has showcased three pavilions, namely, pili nuts, seafood and coffee.

With the tagline “Piling-piling Pagkaing Pilipino”, it featured specialty foods and beverages from all over the country, including such products as fruit wines and liqueurs, herbal teas and health supplements, spices and condiments, snacks and pastries, and a Filipino kitchen to prepare mouthwatering delicacies.

During the opening ceremony of the fair, BDT Director Rhodora Leaño noted that the total number of exhibitors already exceeded their target, from 220 to a number close to 240 exhibitors.

With its two editions this year, DTI aims to showcase more of the best of the country’s food products and to provide more business and employment opportunities to SMEs.

Another highlight of the event was the signing of Memorandum of Agreement (MOA) between DTI, represented by Regional Operations and Development Group Undersecretary Zenaida Maglaya and the SM Malls, represented by its Executive Vice President Ricky Lim for the establishment of DTI Business Service Centers in all SM Malls nationwide. The DTI Business Service Centers will initially cover 25 SM Malls in Metro Manila as well as SM Malls in Bacoor and Dasmariñas in Cavite, Santa Rosa and Calamba in laguna, Marilao in Bulacan, and Masinag in Antipolo.

The event also featured Awareness Seminars on online marketing, licensing of food establishments or food business operators, guidelines for registration of processed and cooked foods, and duties of MSMEs as responsible taxpayers.

Cooking demonstrations and a cooking contest were staged by Cook Magazine during the trade fair.

For more information on the fair, you may contact the DTI through the Bureau of Domestic Trade (BDT) at 751.3223, or email at bdt@dti.gov.ph. The BDT is at the ground floor of the Trade and Industry Building, 361 Senator Gil Puyat Avenue in Makati City. You may also visit the fair’s website at http://www.sikatpinoyfairs.com, or “like” its Facebook page at http://www.facebook.com/SikatPinoyFairs.

The Poor as Profit Center

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Companies in Asia are discovering that. helping the poor can be profitable

These companies, which are engaged in what is called “inclusive business,” are commercially profitable operations whose core business model is to provide large-scale innovative solutions to the problems of people who live on less than US$3 a day – or about 60% of Asia’s population.

This group of people, sometimes called the “base of the pyramid,” is neglected by many companies as customers. They are often only helped by companies through corporate charity or other programs.

“Inclusive business differs from corporate social responsibility and social enterprise because of its business scale, growth potential, and focus on systemic changes for poor people,” said Armin Bauer, a Principal Economist with the Manila-based Asian Development Bank (ADB).

Inclusive business is also distinguished from impact investments in that it places the impact on poor and vulnerable people and de-emphasizes impact on the environment or good governance, he said.

Inclusive business relies on profit-making as an incentive to improve the well-being of low-income and vulnerable populations.

Manila Water: A business model

The Manila Water Company, which provides water utility services to about seven million people in the eastern part of Manila, is an example of this business model.

The company took over as the public water provider for the eastern part of Manila in 1999. Rather than focusing on wealthy or middle class neighborhoods, the company prioritized serving slum areas, in which about one in four people had access to clean, piped water.

The company, part of listed conglomerate Metro Pacific Investments Corp., connected about a million people, mostly the poor in urban slum areas, with water and made significant profits.

“The business plan of Manila Water was to start with providing service to poor areas, not just do it as an add-on later,” said Mr. Bauer. “They upgraded service to the wealthy areas after they made substantial profits serving the poor first.”

ADB and its partners are supporting such inclusive business models through a variety of means. This includes a US$3.6 million grant that will help companies throughout Asia become better at inclusive business, or assisting the poor while making a profit.The grant will help ADB improve its expertise at making inclusive business deals with private sector companies, and also help ADB member-countries develop policies that promote businesses that directly benefit the poor.

This includes, for example, linking inclusive business startups to existing government resources, such as small business loans. Other assistance includes supporting government job creation programs thatbenefit the poor, such as slum upgrading programs and climate-proofing poor neighborhoods.

Among the potential projects to receive support this year are a cacao project and seafarers scholarships in the Philippines; spice production in Cambodia and India; a water project in China; a drip irrigation program in India; and rural bank loan projects in Pakistan and Tajikistan.Prior to this most recent grant, ADB conducted market studies in countries throughout Asia to better understand the potential for inclusive business in the region.

The studies looked at how many inclusive business companies are already operating in the region, how many financial institutions support inclusive business, the problems the companies face and possible solutions, as well as opportunities to start new inclusive businesses.

ADB’s investments in inclusive business companies have steadily increased in recent years. Six out of the 22 approved private sector projects in 2013 were considered inclusive business. This was up from 5% from the period between 2000 and 2012.

MVP for 2016 VP

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MANNY V. Pangilinan has repeatedly said he is not running for President in 2016. But he could be running for Vice President, instead. That is, if Vice President Jejomar Binay got his way.

Speaking to reporters, the former mayor of Makati City confirmed he is considering MVP as his running mate in the 2016 polls—and with good reason.

Considered as one of the most influential men in the country today, MVP is the perfect running mate for any presidential aspirant since he is at the helm of corporations and industries crucial to the Philippine economy: Philippine Long Distance Company, infrastructure giant Metro Pacific Investments Corp., Manila Electric Company, Metro Pacific Tollways Corp., Maynilad Water Services Inc., gold producer Philex Mining and the biggest local power player Manila Electric Company. And with vast holdings in media, health services and various other industries, MVP already wields enough power and financial resources to propel his chosen political allies into the halls of power come 2016.

But MVP is not the only person in Binay’s list of potential bets for VP. Last month he was mouthing off the name of another MP—that of Saragani Representative and boxing legend Manny Pacquiao—as running mate. Another potential mate for Binay is Ate Vi, Batangas Governor Vilma Santos Recto. But like MVP, Vilma has also repeatedly stated that she has no plans of seeking higher office in 2016.

With 2016 just around the bend, the Liberal Party is said to have already begun to raise funds for the campaign kitty of its next presidential standard bearer be it Mar Roxas or Kris Aquino. The LP, too, would benefit immensely having a man of MVP’s stature in its corner.

Let’s put ourselves in MVP’s shoes for a minute. Would it be wise to associate with any single political party in 2016? We think it’s not. And MVP knows it very well that for the sake of his business empire it is best to remain neutral and to stay out of politics.

“There is no political blood that runs through my veins,” MVP said back in October. “I believe I can serve our people better some other way,” he said.

Business and politics do not make good bedfellows. By staying neutral, MVP can play all sides of the fence and emerge a winner regardless of the outcome of the 2016 polls.  All he has to do is to spread his bet—put money on the ruling party, on the opposition and the long shots, too. This way, MVP’s business empire is guaranteed to survive and thrive beyond 2016.

Compact Cars Drive Vehicle Sales Up

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VEHICLE sales of a group of importers climbed in the low double-digits last month on the back of brisk demand for passenger cars.

In a statement, the Association of Vehicle Importers and Distributors Inc (AVID) said its member-companies sold 2,675 units in February, 14 percent more than the 2,338 last year.

Last month’s performance brought the year-to-date tally to 5,866 units, up 18 percent from the 4,963 sold in the same two months of 2013.

Driving sales last month was the 26-percent increase in the number of passenger cars sold at 1,311 units from last year’s 1,043.

AVID attributed the uptick to sales of the Eon and Grand i10 models of Hyundai Asia Resources Inc (HARI).

The light commercial vehicle segment registered a slower five percent sales uptick at 1,364 units from last year’s 1,295.

“Sparked by unified drive of providing quality brand innovations, we at AVID remain committed to deliver value-rich experiences through premium customer service and pioneering world-class products,” the group’s president, Ma. Fe Perez-Agudo, said.

Gian Javelona: The Pinoy ‘Steve Jobs’

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Gian Javelona is the kind of person who would reach for the stars. In a recent interview with Rappler’s Ezra Ferraz, he confided, “When I was a student, I always dreamed of having a company. I wanted to build something that any person could use and a product that could change people’s lives. I remember my classmates were laughing at me when I told them that one day I would have a company that will beat Apple, and that I will name it OrangeApps.” We can imagine who is laughing now, but Gian is modest about his success.

Gian Javelona is only 20 years old, and he is now the CEO of of his own company, OrangeApps. How that happened is based on several factors. In the first place, Gian has never given up on his dream of becoming an entrepreneur. He has always dreamed of having his own company even when he was still a student. One plan has remained on his mind: To build something that any person could use and change people’s lives.

To be a successful entrepreneur, Gian knows that you have to surround yourself with other people driven to succeed. A person can learn from them by absorbing their knowledge and ideas. The young CEO also has an attitude of confidence and resourcefulness. He has never allowed other people’s suspicions to get him down. This outlook helped him find the right people for his company. People have asked, “How can a 20-year old CEO successfully run a company?” He knows this is how many people think but he chose to ignore naysayers.

Building the company from scratch can be overwhelming. Javelona knows that there are issues he has to deal with. He confesses that building his OrangeApps team was the most difficult experience he has ever had. It’s not just because people looking down on his age, but there are other matters at hand. For one, it is hard to get people to join a very young company. It is another challenge to convince them when he can’t even assure them of a regular salary. For so many people, it is too risky to join a company that nobody has heard of.

Despite these circumstances, Javelona found inspiration in the story of Facebook founder Mark Zuckerberg. Gian claims to have watched the biopic ‘The Social Network’ ten times, and he identifies with what Zuckerberg went through during the early days of  Facebook. Coincidentally, both Gian and his idol Zuckerberg started out by breaking rules. Zuckerberg built Facemash, precursor to Facebook, by taking the photos from Harvard’s website without permission. Gian created and released his first mobile app, a PUP-based mobile portal that accesses public information on the university’s website, without notifying PUP.

The school authorities told him to shut it down because security issues started cropping up. This did not discourage Gian. It just made him more determined as he fixed the app in one month. He tried once more by doing a relaunch. The app was an instant hit with  PUP students in just three days. The users grew to around 2,000 active users out of a school population of 70,000 from over 20 campuses. He shares, “The President of PUP called and asked me to present the platform. Sometimes, you need to break some rules to make big things happen.”

In spite of this success, some people still question his capability to run a company at a young age. He responded by building the company “like someone would build a family – you have to make sure there is chemistry.” He picked people whose way of thinking is out of the box, like he is. He also chose those he knows he could work well with.

When asked how a person can unlock his or her true potential, Gian thinks it has something to do with the Philippine educational system. The country’s institutions of learning still have a long way to go to match its global counterparts. What it is doing now, according to Javelona, is to force students towards a job marketplace where being employed relies on skills that constantly change every year.

This is why Gian’s biggest advocacy is youth entrepreneurship. He is constantly invited to speak to young people in symposiums and seminars. Javelona believes young people should consider becoming entrepreneurs. On this, he thinks that education is the main problem. Our educational system molds students to be employees and not employers. He emphasizes, “If you ask a student today, what they want to do after graduation, most will say that they want to work for a big, local company or go abroad and earn big money.”

Last year, Gian was accepted to Ideaspace Foundation’s incubation program for young entrepreneurs. He remembers a funny moment when he is presenting his ideas to Coach Chot Reyes and Manny V. Pangilinan, and he was just wearing a regular shirt. He admits not knowing that he needs to have financial projections and a business model. “I didn’t even understand what those words meant back then,” he says good-humoredly. Even so, Javelona’s time at Ideaspace was life-changing. He actually recommends the incubation route for those who want to build a startup, but have no idea how, for as long as they are determined to see their business ideas come to life.

The people at Ideaspace assisted the young entrepreneur in terms of incorporation, financial projections, valuations, and marketing. Gian says, “Through them, you will meet the best people in the industry, including entrepreneurs, technologists, social innovators, and other aspiring startup founders.”

OrangeApps recently launched the app Khawna. The name comes from the Tagalog phrase ‘ikaw na’ (that’s you), a teasing way to praise a person who has done anything remarkable or impressive. It coincides with the company’s slogan: “It starts with you.” Gian believes that all of us can make a difference in the world.

According to him, Khawna is a learning platform where you could learn skills currently required by the industry. He believes that the app bridges the gap of industry learning and makes education available to everyone around the world. The learning platform offers online classes that emphasize hard skills, such as science and technology, engineering, mathematics, and entrepreneurship.

Gian says, “Imagine a kid in a rural area attending a class on entrepreneurship from his mobile phone, one taught by industry experts. What will happen to the Philippines? There are 7.93 million underemployed Filipinos and 6.24 million out of school, young Filipinos. With Khawna, we can make every Filipino employable.”

He hopes that this would result in more students aspiring to become entrepreneurs and create their own startup companies. In this, Javelona is very optimistic. He shares, “I’m really happy to see successful startups operating in this country, such as Kalibrr, Guestlist.ph, and TimeFree Innovations. They inspire young startup founders to keep pushing forward – They help us realize that disrupting industries here in the Philippines will lead the country to a better future.”

Every time Gian talks to students, he reminds them of how many huge tech companies started out as small ventures. He emphasizes that all of these tech companies like Microsoft and IBM started the way he and other young entrepreneurs started. “They were built by human beings like us. So it’s not impossible for Filipinos to also build a billion dollar company in the future,” he says.

For a lot of students and fresh graduates, it will be their first time to be told through Gian’s talks, that they can do something other than compete for entry-level jobs. He shares, “For the first time they see a Filipino company who wants to build something that can definitely change lives. I always tell them that ‘the sooner you start, the faster you will learn.’ I hope that inspires them.”

Many young Filipinos are so impressed and inspired by Javelona’s story. Many of them want to work for OrangeApps, and some feel encouraged to start their own company. Some of these young people started out as Khawna’s earliest users. They see the app as a launching pad to learn the skills they need to survive and succeed in the job market. Gian hopes that most of them can become future innovators, entrepreneurs, and industry leaders who will help uplift the country’s economy.