MANILA, January 8, 2006
 (STAR) By Mary Ann Ll. Reyes - Less than three out of every 100 fresh college graduates are hired in the business process outsourcing-contact center industry (BPO-CC) each year, raising concerns that the Philippines would not be able to sustain the growth of the $10-billion sector with the dearth of qualified Filipino agents.

Industry data showed that of the 400,000 new graduates who look for work annually, only 11,526 or 2.89 percent are accepted in BPO companies and call centers upon passing the competitive qualifying examinations.

"Most fail because they fail to understand the requirement of global job interviews, testing and process. Secondly, the spoken English becomes a challenge, in terms of conversational fluency, tone and accent," said Jim Santiago, president and CEO of John F. Kennedy (JFK) Center Foundation-Philippines.

Santiago said that unless the hiring rate in BPO companies and call centers improves soon, the Philippines will not sustain the BPO-CC boom and will lose its competitiveness to other Asian countries.

He said the only solution is to prepare fresh graduates for a job in a BPO firm or call center by providing them quality training that will significantly increase their chances of getting hired.

"The spoken English can be cured over a relatively short period of time. The workforce needs a bit more seasoning in English but they are trainable and very literate, possess excellent domain knowledge and superior work ethics," he emphasized.

Training programs conducted by JFK Center Foundation showed that an 80-hour training period distributed in 30 days can increase the average hiring rate of BPO firms and call centers from 2.89 percent to as high as 53 percent.

He said the hiring rate improved as the training prepared the students in terms of English proficiency, accent reduction, problem solving, analytical skills, decision making and execution, and customer satisfaction and experience.

At present, JFK Center Foundation, which seeks to revolutionize the BPO-CC industry in the country through the development of centers of excellence, is working with universities and colleges to develop their curriculum for a one-year, two-year, four-year and even MBA programs in BPO-CC Entrepreneurship and Management.

"The incubation BPO-CC in the schools benefits everyone in the Philippines. It is no longer restricted to the large metropolitan areas but can be accomplished in the provinces," he said.

The JFK Foundation has already started working with local government institutions, state universities, Catholic universities, Christian universities, other private universities, and local universities and colleges such as the Quezon City Polytechnic University, System Technology Institute (STI), St. Paul University- Manila and St. Paul University Tuguegarao.

Santiago noted that JFK Center Foundation and American solutions provider Five9 recently tied up to ensure the steady growth of the information technology sector in the Philippines, by developing a cottage call center industry.

Five9 is an international call center solutions provider that has chosen the Philippines as the site of its regional headquarters in Southeast Asia. In 2005, the company introduced its award-winning Five9 Virtual Contact Center (VCC), a revolutionary technology that allows small organizations to start a call center with minimal capital.

The new partnership seeks to assist the development of 400 to 500 small to medium-scale companies in the provinces that will generate around 88,000 jobs. "Our goal is to promote the Philippines aggressively as the premier choice for the global customer care capital of the world," Santiago said.

"With the development of low-cost and state-of-the-art technology such as Five9, we will be able to help differentiate Filipino BPO centers with higher skills, excellent or superior customer satisfaction and customer experience, high velocity delivery, and specialized value and increased knowledge," he explained.

He said that with the advent of new low cost technology by Five9, it is expected that the 100,000 jobs in the BPO-CC sector will increase by another 90,000 over the next three years, expanding the business by $5 billion.

Government sees P106-B revenues with VAT hike to 12% By Des Ferriols The Star 01/08/2006

The government expects the incremental increase in revenues due to the adjustment of the value-added tax (VAT) rate from 10 percent to 12 percent to reach P106 billion in 2006, the Department of Finance (DOF) said.

The two percentage point increase in the VAT rate will be implemented as scheduled on Feb. 1, especially since the most significant trigger has been set in 2005, the DOF added.

Finance Secretary Margarito Teves told reporters that he is prepared to recommend the increase in the VAT rate from 10 percent to 12 percent, saying that the budget deficit to gross domestic production (GDP) ratio remains at over three percent.

"Iím required by law to make that recommendation if the conditions are met so I am prepared to do so," Teves said.

Teves said although the Arroyo administration is expecting to outperform its budget deficit ceiling in 2005, the reduction is not big enough to put the budget gap to below three percent of GDP.

Under the law, President Arroyo was allowed by Congress to raise the VAT rate to 12 percent when either of two conditions are met: The government deficit exceeds 1.5 percent of GDP or when VAT collections amounted to more than 2.8 percent of GDP.

Using the projected 2005 GDP of P5.3 trillion, Teves said the national budget deficit for the whole of 2005 would have had to plummet to P80 billion to create one of the conditions where the VAT adjustment would not be necessary.

Even if the deficit goes down to as low as P160 billion or P20 billion below the P180-billion ceiling for 2005, Teves said this would still be around three percent of GDP.

The budget deficit in the first 11 months of 2005, based on the latest available data, was P122.8 billion as a result of severe cuts in spending which offset the shortfalls in revenue collections.

The increase in the VAT rate is considered the single most critical factor for sustained investor and creditor confidence in the countryís economic prospects since it would increase the governmentís revenue base at the expense of increasing the publicís tax burden.

The Arroyo administration, however, has been unable to meet its revenue collection target even after it lifted the VAT exemption of previously-exempted commodities and services.

Along with the VAT increase, the government would also implement so-called "mitigating measures" intended to cushion the inflationary impact of the VAT rate adjustment.

These so-called mitigating measures include the reduction in the excise taxes on certain oil products such as bunker fuel and kerosene, as well as the subsidy on the electricity rates of low-end household power consumers.

The DOF expressed optimism that the fiscal consolidation program would stay on track, especially when the other aspects of the program is implemented, such as the lateral attrition law that would allow the government to reduce its workforce and streamline the bureaucracy.

The government had planned to spend the bulk of the VAT proceeds on deficit reduction, and for the first time since the government implemented austerity measures, there will also be an increase in the budget allocations for social services and infrastructure.

Starting next year, Teves said 70 percent of the proceeds would go to deficit reduction and the remaining 30 percent will be used for budgetary support.

Chief News Editor: Sol Jose Vanzi

All rights reserved