Olongapo Telecom & Information Technology

Saturday, September 19, 2009

ICT rebound slows down foreign direct investment decline

Total approved foreign direct investments (FDIs) in April-June declined for the third straight quarter but at a slower rate due to a rebound in the information and communications technology (ICT) sector.

"After four quarters of continuous decline, committed investments intended for the ICT industry rebounded, growing by 220.9% from P2 billion a year ago to P6.5 billion in [the second quarter of] 2009," according to the second quarter FDI Quarterly Report released on Friday by the National Statistical Coordination Board (NSCB).

The ICT sector’s contribution has tempered the quarter-on-quarter FDI decline, reflecting an economic recovery although at a slow pace.

"Although [the second quarter performance] marks the third consecutive quarter of declines in approved FDI, the decline is lower than the declines registered in the previous two quarters, an indication that the global crisis may be over," NSCB Secretary-General Romulo A. Virola said in a statement accompanying the report.

Second-quarter FDIs approved by four investment promotion agencies posted a 73% drop to P19.9 billion from P73.9 billion year-on-year, the report said.

The FDI report covered four investment promotion agencies — Board of Investments (BoI), Clark Development Corp. (CDC), Philippine Economic Zone Authority (PEZA) and Subic Bay Metropolitan Authority (SBMA).

Earlier NSCB reports showed total approved FDIs in the first quarter reached its lowest level in 13 years at P4 billion, declining by 80.9% year-on-year This is a percentage point lower than the fourth quarter 2008 drop of 79.2% to P21.4 billion.

The pick-up in FDIs will continue "considering that the global recession is easing," Bureau of Investments (BoI) Managing Head Elmer C. Hernandez said in a text message on Friday.

For his part, BoI Executive Director Efren V. Leaño said in a separate interview on Friday "there’s a big probability of a contraction" of investment pledges approved by the BoI and PEZA compared to the Trade department projection of up to 3.7% growth.

"But based on the interest we received from missions, it will be better in 2010 and 2011," he added.

The upbeat outlook, however, defied the United Nations Conference on Trade and Development’s World Investment Report released on Thursday that predicted FDI flows to Southeast Asian countries will only recover by 2011.

On a per country basis, Korea led all other countries, committing about 25.6% of total FDI applications or P5.1 billion for the second quarter. Hong Kong and Japan followed at 19% and 12.8%, respectively. It was the first time since the third quarter of 2000 that Hong Kong has landed in the top three countries with P3.8 billion in pledges.

"Hong Kong investments were mostly intended to fund projects in finance and real estate industry," the quarterly report noted.

Per sector, finance and real estate posted the highest FDIs as commitments quadrupled to P7.6 billion in the second quarter from P1.9 billion in 2008. Private services was second at P6.6 billion, down 53.2% from last year.

The report added that a total of 29,006 jobs are expected to be generated from the FDIs approved in April-June, over half of which will come from private services.

During the period, investment promotion agency PEZA contributed the lion’s share at 63.6% equivalent to P12.7 billion worth of commitments, followed by SBMA (13.3%), CDC (12.3%) and BoI (10.8%).

CDC recorded the highest growth in FDI approvals with 38.8% while BoI registered the largest decline at 95.9 percent, the report said. — M. P. T Jamias

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Tuesday, September 15, 2009

RP's poor showing in business surveys may harm BPO sector

By Ma. Elisa P. Osorio (The Philippine Star)

The Philippines may lose its edge against its competitors in the business process outsourcing (BPO) due to the country’s poor showing in business surveys.

Preliminary results of an industry survey conducted by the Business Processing Association of the Philippines (BPA/P) and Out-source2Philippines (O2P) suggest that persistent negative publicity–such as poor showings in business surveys –are taking a toll on the Philippines’ brand image.

The survey showed that negative perception of the Philippines, including the tight labor market for knowledge workers, is increasingly viewed as a significant risk factor by the industry.

In spite of this, industry executives remain upbeat on the Philippines and still anticipate a further expansion. Respondents to the survey were BPO executives working in the Philippines.

The complete results will be released at the end of the month in the next regular CEO breakfast briefing conducted by BPA/P and O2P.

The preliminary data show that 51 percent of respondents indicated that “negative perception” of the Philippines is a level one, two, or three risk factor associated with doing business in the Philippines, and 20 percent said it is a level one factor.

A slightly lower percentage, 49 percent said the “tight labor market” is a level one, two, or three risk factor in their view, but 23 percent of respondents said it was a level one risk factor.

However, when respondents were asked to gauge the competitiveness of the Philippines, a majority of respondents or 56 percent indicated that doing business in the Philippines is less risky or much less risky than doing business in India.

India dominates the BPO industry, and is the world’s biggest provider of outsourced services. The Philippines is generally considered the number two provider of offshore outsourced services.

About 45 percent of respondents said that compared to India doing business in the Philippines involves about the same risk, more risk, or much more risk.

BPA/P chief executive Oscar Sañez said that the Philippine BPO industry is on track to expand approximately 20 percent this year, from $6.1 billion last year. The BPO industry employs approximately 400,000 Filipinos in a wide range of sectors.

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Sunday, September 13, 2009

Lapus to private sector: Promote ICT education

EDUCATION Secretary Jesli Lapus has enjoined the private sector to work closely with the Department of Education (DepEd) in promoting learning systems enhanced with information communication technology to improve teaching and learning outcomes.

“Enhancing the curriculum with ICT is the only way for our public school- children to meet the challenges of 21st century learning,” Lapus said.

Lapus made the appeal during the turnover of 40 Intel Classmate PCs to public schoolchildren in Concepcion, Tarlac recently.

“We thank our partners in Intel for investing in education and for supporting our major thrust to introduce technology in education. This intervention would not have been possible without their support to DepEd through the Adopt-A-School Program,” Lapus said.

A Classmate PC includes two gigabytes of memory storage and Microsoft office. It is Internet-ready, portable, and user-friendly for children.

At present, 280 Classmate PCs have been turned over by DepEd’s Adopt-A-School Program to public schools in Pampanga, Baguio City, Sagada and Taytay, Rizal. Some 400 Classmate PCs are scheduled for turn-over to other DepEd elementary schools in different divisions nationwide. Jeffrey C. Tiangco Journal.com.ph

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Enrile thumbs down text metering system

SENATE President Juan Ponce Enrile yesterday opposed the proposal for government to install a metering system that would monitor the text messaging sales of telecommunication companies under a tax-on-text measure emanating from the House of Representatives.

Enrile said he agreed with the concern raised by Rep. Rufus Rodriguez that the metering system could violate the Filipino’s right to privacy as the telcos had admitted that such a system could be used to read other people’s text messages.

Likewise, even if a metering system would not infringe on the privacy of consumers, Enrile said it would entail unnecessary cost to be incurred by the government.

“The metering system may be good in principle but will it be financially feasible considering the high costs of the metering machines?” said Enrile. Purportedly, the system would ensure that telcos would be honest in declaring their profit from text messages for the purpose of paying taxes.

Earlier, Enrile had outright turned down the House proposal to tax texting, saying such a measure would surely not pass in the Senate.

He explained that tax on text would only be acceptable to him if the burden of paying the same would not be passed on by telcos to consumers.

“For example, the current P1 per text rate can be reduced to 80 centavos and government can get a 10 percent tax on that rate. That way, after the tax, telcos still collect 72 centavos per text message,” said Enrile.

“It will be fair because it ensures that the tax burden will not be passed on to consumers,” he added. Journal.com.ph

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