Transcript Document

MEASUREMENT OF THE BUSINESS PROCESSING
OUTSOURCING (BPO) IN THE
PHILIPPINE SYSTEM OF NATIONAL ACCOUNTS
(PSNA)
by
Estrella V.Domingo
Assistant Secretary General
APEC Capacity Building Seminar Workshop on Measurement of
International Trade Services
Renaissance Makati City Hotel, Makati City, Philippines
October 1-3, 2008
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COORDINATION BOARD
OUTLINE OF PRESENTATION
I. Introduction
II. Scope and Coverage
III. Data and Data Sources
IV. Estimation Methodologies
V. Issues and Future Direction
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BPO Industries in the
Philippines
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BPOs in the Philippines
•Philippines becoming a rising hub for BPO
related services
•Revenues from IT services, mostly BPOs, reached
~ US$ 2.9 B, growth of ~ 45%
•Exports amounted to US$ 2 B – about 69% higher
than 2005 level
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BPOs in the Philippines
•Major BPOs in the Philippines:
a) contact centers
b) software development
c) animation/creative services
d) data transcription
e) back office processing and
engineering design
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BPOs in the Philippines
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Scope and Coverage
in the PSNA
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Scope and Coverage
PSNA
Contact Center
BPO Industry
Non-Contact Center
Back office
Inbound and outbound
Voice operation services for
purpose of sales, customer
service, technical support, others
Medical Transcription
Legal Transcription
Other Data Transcription
Software development
Animation
Engineering development and digital content
**Subject to data limitations:
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Scope and Coverage
PSNA
•BPO is captured under
Gross Value Added (GVA)
of Private Services (production side)
and Exports of Services (expenditure side)
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Scope and Coverage
PSNA
• GVA of Private Services include services in:
a)Education
b)Medical and Health
c)Recreation
d)Hotel and Restaurant
e)Personal and Business
Includes BPOs
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Scope and Coverage
PSNA
• Exports of Services covers services - purchases,
transactions, etc – provided by the country
to non-residents and include:
a) transportation (freight)
b) insurance
c) travel
d) government
e) miscellaneous services (includes BPOs)
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Scope and Coverage
PSNA
• 1994
Philippine System of Industrial
Classification (PSIC) provides
detailed list of industries classified under
Information and Communications
Technology (ICT) wherein
activities considered as BPOs are listed
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Data and Data Sources
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Data Sources
• From censuses, surveys and administrative
data from government regulatory agencies
including data from industries’ various
associations
• Bulk of information come from survey of
Establishments by the National Statistics
Office(NSO)
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Data Sources
•Other data sources:
a) Bangko Sentral ng Pilipinas (BSP)
b) Securities and Exchange Commission (SEC)
c) Commission on Information and
Communication Technology (CICT)
d) Contact Center Association of the Philippines (CCAP)
e) Business Process Association of the Philippines (BPAP)
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Data Sources
• National Statistics Office (NSO)
a) Census of Philippine Business and
Industry(CPBI)
b) Annual Survey of Philippine Business
and Industry (ASPBI)
c) Quarterly Survey of Philippine Business
and Industry(QSPBI)
Latest census/surveys of establishments:
1999 CPBI, 2005 ASPBI, Q2 2008 QSPBI
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Data Sources
•CPBI release is two (2) years after reference year
for the preliminary release, and
three (3) years after reference year for the final
results
•QSPBI covers only large sample establishments.
Covers all industries except Agriculture Industry.
•QSPBI conducted every quarter. Releases are 45 days,
60 days, 90 days after reference quarter
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Data Sources
•Input-Output Survey of Establishments (IOSE)
> conducted irregularly
> latest is 2002 IOSE
> Detailed information on:
revenue/sales of production,
cost of materials and supplies and
cost of fuels purchased
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Data Sources
• Bangko Sentral ng Pilipinas (BSP)
> 2005 Benchmark Survey of IT-enabled Services
> 2006 Survey of IT and IT-enabled Services
Surveys provide information on:
revenue, employment, compensation, foreign
direct investments, and export markets of
IT-enabled industries
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Data Sources
• Securities and Exchange Commission (SEC)
> Financial statements submitted to the agency
as mandated by law for purposes of registration
and licensing
•Relevant selected information compiled by SEC are
consolidated and published for top 1,000; top 2,000 and
Top 5,000 corporations whose rankings are based on Gross
Revenues.
•For data items not published, data are processed directly
from available financial statements by industry for
top 2,000 corporations
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Estimation
Methodologies
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Estimation Methodology
•In 2003, information to measure contribution
of BPOs not yet available
•Use of existing data on revenue projections
by the industry’s key players through BPO associations
mostly from BPAP and CCAP
•As initial estimate, gross output of BPOs was based on
actual revenues and projected revenues
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*2004-2005 refers to actual revenues
*2006-2007 refers to updated projected revenues
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Estimation Methodology
Gross Output (GO)
For 2006-2007, GO was estimated thru:
GOi  UPi xAR2005
AR2005
AE2005

UP2005
Where GO = gross output of BPO industry for year i;
i = 2006 and 2007
UP = updated projection of BPO revenues for year i and 2005
AR = adjustment ratio for 2005
AE = actual estimates of BPO revenues for 2005
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Estimation Methodology
Gross Valued Added (GVA)
> indirect approach using GVAR applied to total
estimated GO
> estimates of GO aggregated to represent total
of contact centers and non-contact centers
> Financial statements of key BPO players (from SEC)
as source of GVAR
> As of March 2007, latest available data from
financial statements are for 2004
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Estimation Methodology
Gross Valued Added (GVA)
GVAj , k  GOj , k xGVAR2004 , k
GVAR2004 
FGVA2004 , k
FGO2004 , k
Where GVA = gross value added of BPO industry for year j;
j=2004, 2005, 2006, 2007
k =1(contact centers), 2(non-contact centers)
GO = gross output of BPO industry for year j
GVAR = gross value added ratio for 2004 culled from consolidated FS
FGVA = gross value added for 2004 from consolidated FS
FGO = gross output for 2004 from consolidated FS
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Estimation Methodology
Exports of Services
> 2005 Survey of IT and IT-enabled Services showed that
96.3% of the total revenues of contact centers and
43.4% of the total revenues of non-contact centers
are intended for exports
> assumption that informal or unorganized activities of
non-contact centers are not captured in banking systems
> 60% undercoverage ratio applied to account for
underreporting of export transactions of non-contact
centers
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Estimation Methodology
Formula to estimate undercoverage of BPO from Balance of Payments:
ECC j  GOCCj x0.963x0.60
ENC j  GONCj x0.434x0.60
EBPOj  ECC j  ENC j
Where j=2004, 2005, 2006, 2007
ECC = exports of contact center services for year j
ENC = exports of non-contact center services for year j
GOCC =gross output of contact centers industry for year j
GONC = gross output of non-contact centers industry for year j
EBPO = exports of BPO services for year j
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Estimation Methodology
Formula for undercoverage of BPO:
BPOXi  BPOGO A * 0.97 * 0.60
(CSi  CISi  OBSi )
12
 (CS
i 1
i
 CISi  OBSi )
i=1, 2,…12
Where BPOXi = exports of BPO services for month I
BPOGOA = annual gross output of BPO industry (from private services
sector)
97% and 60% = constants
CS = Computer services for month i (from BOP)
CIS = Computer and Information Services for month i (from BOP)
OBS = Other Business Services for month i (from BOP)
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Issues and Future
Direction
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Limitations of estimates in the PSNA
•Informal activities are not covered particularly
household-based activities, which use intensive
IT services
•Initial estimates of GVA for 2004-2007 are based
from available indicator on revenues; estimates for
cost not available
•Use of GVARs from 2004 may no longer be appropriate
as industry continues to expand and changes in
technology likewise occur
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Future Directions
• Estimate of informal activities of BPOs to be done
separately as component of BPO industry once results of
ongoing Informal Sector Survey (by NSO) becomes
available
• Present estimates to be revisited using benchmark
information to provide direct estimates of the contribution
of the BPO industry
• Institutional arrangements with SEC must be done to
come up with a consolidated data for BPO
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Thank you!
URL: http://www.nscb.gov.ph
e-mail: [email protected]
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