BPOs face slowing growth this year
A survey conducted by the Information Technology and Business Process Association of the Philippines (IBPAP) showed that several BPO companies are projecting a flat growth or contraction this year due to the pandemic. Of the 70 member countries that were surveyed, 18% said they expect their revenues to decline and 36% see their business to remain flat this year. Meanwhile, about 46% expect about 3-7% growth this year. IBPAP President Rey C. Untal said that the travel, hospitality and tourism sectors have been hit hard, while healthcare, telecommunications, logistics, financial services and e-commerce sectors continue to thrive and remain resilient amid the pandemic.
In Q1 2020, Colliers recorded about 90,000 sq metres (968,400 sq feet) of office deals from the outsourcing sector, slightly lower than the 99,000 sq metres (1.07 million sq feet) in Q1 2019. Outsourcing deals pre-COVID were initially encouraging, with demand from this sector picking up in H2 2019. However, uncertainties due to the pandemic and lockdowns have compelled outsourcing firms to hold off expansion. In our opinion, the availability of Philippine Economic Zone Authority (PEZA)-proclaimed spaces within and outside of Metro Manila will likely play an important role in enticing outsourcing firms to occupy new office space. We believe that cities and provinces with adequate PEZA space such as Cebu, Iloilo, Davao, Bacolod and Pampanga should attract more outsourcing occupiers.
InstaPay, PesoNet transactions hit P310 billion
Digital payments cleared by the Bangko Sentral ng Pilipinas (BSP) or the central bank from March to May 2020 reached PHP310 billion (USD6.2 billion) amid the COVID-19 pandemic. The Philippine Payments Management, Inc. (PPMI) has seen an increase in value and transactions since the implementation of the community quarantine in March. InstaPay transactions reached PHP175.51 billion (USD3.5 billion) from March to May, about 54.4% higher than the value recorded from December to February. PESONet transactions also grew by 34% to PHP134.04 billion (USD2.7 billion). Meanwhile, data from PPMI showed that both InstaPay and PESONet transactions increased by 76.2% and 89% to 29.53 million and 6.9 million respectively from March to May.
Colliers believes that the pandemic will likely result in a shift in consumer habits and this may give rise to more electronic payment and e-wallet transactions. The central bank said that the country is on track to reaching its goal of increasing the share of e-payment transactions to 20% by the end of the year and 50% by 2023 from only below 1% in the last five years. Colliers sees online payments gaining traction post-COVID19 due to their convenience and accessibility. Meanwhile, Colliers expects more retailers to create their own e-commerce websites, utilize existing sites of major mall operators, and maximize social media sites such as Facebook and Instagram to capture consumer demand.
Pinoys willing to travel amid COVID
Results of the Philippine Travel Survey Report showed that close to 8 out of 10 Filipinos were willing to travel domestically even without a vaccine against COVID-19. Some of the top domestic destinations include Boracay, Siargao, Baguio, and El Nido. The joint survey of the Department of Tourism (DOT), Guide to the Philippines, and the Asian Institute of Management was conducted in May and covered 12,732 respondents across the Philippines. The survey also showed that only 26% of the respondents were willing to travel internationally in the next six months. Due to the potential decrease in income, around 44% will also likely cut their travel budgets. Travelers also preferred to visit nearby destinations and do bookings and check-ins online to reduce risks. The report highlighted that establishments should be transparent and enforce safety protocols to ease travelers' concerns.
Temporary travel restrictions due to the pandemic have significantly affected the leisure sector of the country. In Q1 2020, hotel occupancy rates across Metro Manila have dropped to as low as 35%, from 71% in 2019. As the domestic tourism industry prepares to re-open, we project the sector to gradually recover given the pent-up demand from local tourists. In order to ease travelers' safety concerns and boost travel confidence, we recommend that hotel operators strictly enforce the protocols noted under the new normal guidelines of the DOT. Operators should also further tap technology to offer travelers contactless ways to book and check-in. These include keyless entry systems and offering of mobile concierge options to minimize direct contact.