Post on 28-Dec-2015
1 EV Domingo/1 October 2008NATIONAL STATISTICAL COORDINATION BOARD
MEASUREMENT OF THE BUSINESS PROCESSING OUTSOURCING (BPO) IN
THE PHILIPPINE SYSTEM OF NATIONAL
ACCOUNTS (PSNA)
by
Estrella V.DomingoAssistant Secretary General
APEC Capacity Building Seminar Workshop on Measurement of International Trade ServicesRenaissance Makati City Hotel, Makati City, Philippines
October 1-3, 2008
2 EV Domingo/1 October 2008NATIONAL STATISTICAL 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 centersb) software developmentc) animation/creative servicesd) data transcriptione) back office processing and
engineering design
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Scope and Coverage PSNA
BPO Industry
**Subject to data limitations:
Contact Center Non-Contact Center
Inbound and outbound Voice operation services for purpose of sales, customerservice, technical support, others
Back office
Medical Transcription
Legal Transcription
Other Data Transcription
AnimationSoftware development
Engineering development and digital content
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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)Educationb)Medical and Healthc)Recreationd)Hotel and Restaurante)Personal and Business Includes BPOs
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Scope and Coverage PSNA
• Exports of Services covers services - purchases,transactions, etc – provided by the countryto non-residents and include:
a) transportation (freight)b) insurancec) traveld) governmente) miscellaneous services (includes BPOs)
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Scope and Coverage PSNA
• 1994 Philippine System of Industrial Classification (PSIC) providesdetailed list of industries classified under Information and Communications Technology (ICT) wherein activities considered as BPOs are listed
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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 andTop 5,000 corporations whose rankings are based on GrossRevenues.
•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 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:
2005xARUPGO ii
2005
20052005 UP
AEAR
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
27 EV Domingo/1 October 2008NATIONAL STATISTICAL COORDINATION BOARD
Estimation Methodology
Gross Valued Added (GVA)
kkjkj xGVARGOGVA ,2004,,
k
k
FGO
FGVAGVAR
,2004
,20042004
Where GVA = gross value added of BPO industry for year j; j=2004, 2005, 2006, 2007k =1(contact centers), 2(non-contact centers)GO = gross output of BPO industry for year jGVAR = gross value added ratio for 2004 culled from consolidated FSFGVA = gross value added for 2004 from consolidated FSFGO = gross output for 2004 from consolidated FS
30 EV Domingo/1 October 2008NATIONAL STATISTICAL COORDINATION BOARD
Estimation Methodology
Exports of Services
> 2005 Survey of IT and IT-enabled Services showed that96.3% of the total revenues of contact centers and43.4% of the total revenues of non-contact centersare 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-contactcenters
31 EV Domingo/1 October 2008NATIONAL STATISTICAL COORDINATION BOARD
Estimation MethodologyFormula to estimate undercoverage of BPO from Balance of Payments:
60.0963.0 xxGOCCECC jj
60.0434.0 xxGONCENC jj
jjj ENCECCEBPO
Where j=2004, 2005, 2006, 2007ECC = exports of contact center services for year jENC = exports of non-contact center services for year jGOCC =gross output of contact centers industry for year jGONC = gross output of non-contact centers industry for year jEBPO = exports of BPO services for year j
32 EV Domingo/1 October 2008NATIONAL STATISTICAL COORDINATION BOARD
Estimation MethodologyFormula for undercoverage of BPO:
12
1
)(
)(60.0*97.0*
iiii
iiiGOXi
OBSCISCS
OBSCISCSBPOBPO
A
i=1, 2,…12Where BPOXi = exports of BPO services for month I
BPOGOA = annual gross output of BPO industry (from private servicessector)
97% and 60% = constantsCS = 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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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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• 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
Future Directions