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Rare total solar eclipse spreads wonder across US

CHARLESTON, S.C./SHERIDAN, OREGON — As millions of awestruck Americans cast their gaze skyward on Monday at the extraordinary sight of a total solar eclipse, one Connecticut man had his eyes set firmly on a different prize.

Joseph Fleming, 43, went down on one knee in the darkness near the harbor in Charleston, South Carolina, and asked Nicole Durham to marry him.

“The sun, the moon and my love, all in a straight line,” Mr. Fleming said, laughing, after Ms. Durham, 40, said yes.

The first total eclipse in a century to sweep across the United States from coast to coast inspired Americans to make marriage proposals, hold family reunions and take time from work to witness with wonder one of the cosmos’ rarest phenomena.

After weeks of anticipation, onlookers from Oregon to South Carolina whooped and cheered as the moon blotted out the sun, transforming a narrow band of the United States from day to night for two minutes at a time.

Even President Donald J. Trump stepped out of the White House to see the eclipse, though he was spotted briefly looking up without protective glasses, which can cause eye damage, as an aide yelled “Don’t look!”

“It’s more powerful than I expected,” Robert Sarazin Blake, 40, a singer from Bellingham, Washington, said after the eclipse passed over Roshambo ArtFarm in Sheridan, Oregon. “All of a sudden you’re completely in another world. It’s like you’re walking on air or tunneling underground like a badger.”

No area in the continental United States had seen a total solar eclipse since 1979, while the last coast-to-coast total eclipse took place in 1918.

The event was expected to draw one of the largest audiences in human history, including those watching on television and online.

Some 12 million people live in the 70-mile-wide (113-km-wide), 2,500-mile-long (4,000-km-long) zone where the total eclipse appeared, while hordes of others traveled to spots along the route.

Many people trekked to remote national forests and parks of Oregon, Idaho and Wyoming. Those in cities along the path like Kansas City, Missouri, and Nashville, Tennessee, were able to simply walk outside.

The eclipse first reached “totality” — the shadow cast when the sun is completely blocked by the moon — in Oregon at 10:15 a.m. PDT (1715 GMT) and began spreading eastward.

“It just kind of tickled you all over — it was wonderful — and I wish I could do it again,” said Stormy Shreves, 57, a fish gutter who lives in Depoe Bay, Oregon. “But I won’t see something like that ever again, so I’m really glad I took the day off work so I could experience it.”

As the sun slipped behind the moon in Sawtooth National Forest in Idaho, stars became visible, coyotes howled and the temperature dropped precipitously.

The phenomenon took its final bow at 2:49 p.m. EDT (1849 GMT) near Charleston.

Monday’s excitement led music lovers to stream Bonnie Tyler’s “Total Eclipse of the Heart,” pushing it to the top of Apple’s iTunes chart 34 years after its release. Ms. Tyler herself performed the song aboard a Royal Caribbean cruise ship on Monday.

VIEWING PARTIES
A number of towns within the eclipse’s path set up public events. At the Southern Illinois University campus in Carbondale, Illinois, the 15,000-seat football stadium was sold out for Monday.

Other people in the eclipse zone hosted their own private viewing parties. At a mountain cabin in the woods in Murphy, North Carolina, the air grew cold as the moon slowly chipped away at the sun before blocking it completely, leaving only a surrounding halo of light.

“That was the most beautiful thing. I could die happy now,” said Samantha Gray, 20, an incoming graduate student at University of Chicago. “Anybody want to go on vacation with me in April 2024?”

Another total solar eclipse will cut across the southeastern and northeastern United States on April 8, 2024.

For millions of others outside the zone of totality, a partial eclipse appeared throughout North America, attracting its own crowds.

In Washington, DC, thousands of people lined the National Mall at 2:45 p.m., when four-fifths of the sun was blacked out.

“It’s amazing, super cool,” said Brittany Labrador, 30, a nurse practitioner from Memphis. “It’s kind of just cool to watch in the capital.”

In New York, people crowded sidewalks near Times Square, with the vast majority staring up without any protective lenses.

“I’m actually kind of scared to look up and go blind without using the glasses,” said Sarah Fowler, one of the few who wore the proper eyewear. — Reuters

Dominguez sees Customs reforms on track after Faeldon departure

REFORMS in the Bureau of Customs (BoC) will stay on track despite the change in leadership, Finance Secretary Carlos G. Dominguez III said.

Faeldon to adversaries: Don’t act like you own BoC
Former Customs Commissioner Nicanor E. Faeldon gestures during a press conference at his office in Manila. — PHILIPPINE STAR_EDD GUMBAN

“There is a [personnel] change, but there is no change in management thrust in the agency… I expect that the improvements will continue, and then we will move forward with the current thrust of the agency,” Mr. Dominguez told reporters yesterday.

President Rodrigo R. Duterte announced late Monday that he has accepted Nicanor E. Faeldon’s resignation as the Customs chief, with the agency under pressure due to an investigation into P6.4 billion worth of methamphetamine hydrochloride, known locally as ‘shabu,’ in a Valenzuela warehouse in May.

The illegal drugs are alleged to have been shipped from China, raising questions about how they got past Customs.

In separate House and Senate hearings, legislators questioned Mr. Faeldon’s capability in running the bureau, and has called for his resignation.

Mr. Dominguez stood by Mr. Faeldon, noting that the discovery of tax evasion by cigarette manufacturer Mighty Corp. eventually resulted in a record tax settlement.

“Our success in the collection of some P30 billion pesos from Mighty was initiated by the BoC…So I have no doubt about his honesty and sincerity.”

Still, Mr. Dominguez said that he is confident with the appointment of Philippine Drug Enforcement Agency Director-General Isidro S. Lapeña to replace Mr. Faeldon as the Customs Commissioner.

“I am very confident in the new appointee who is Sid Lapeña. He is a very honest, thorough, and very straight guy,” Mr. Dominguez said.

Asked whether the bureau will be on target to meet its goals, Mr. Dominguez said: “I think the agency is shaping up and I think they are fully aware that this big job is in front of them. Let me just point out that I think the Bureau of Customs is well on its way to showing that it can meet up with its responsibilities.”

Mr. Faeldon issued a statement on his resignation yesterday saying: “My relief from my post is the best for our country. I urge everyone to continue to support the reform agenda and the development programs of the President.”

“I thank everyone who has supported the Bureau of Customs during my stay and I appeal to the BoC employees and to the public to support the new commissioner. Thank you very much,” he said.

The BoC — an agency of the Department of Finance, and the second-largest revenue generating agency — is currently implementing Republic Act No. 10863 or the Customs Modernization and Tariff Act, to bring customs procedures up to international standards, utilize information and communications technology more extensively, and curb illicit activities in its ports.

The agency is tasked to collect P467.9 billion this year. As of the first half, it has collected P210.28 billion, up 10.35% from actual collections a year earlier. — Elijah Joseph C. Tubayan

Emerging market currencies vs dollar, euro

LONDON — Emerging economies’ debt in euros has shot to record highs thanks to European Central Bank (ECB) largesse, and yet an approaching end to this generosity won’t necessarily inflict the kind of pain that markets once suffered at the hands of the US Fed. Read the full story.

ECB ‘taper tantrum’ risk downplayed for emerging marts

India wields name and shame strategy

INDIA’S regulator is putting a spotlight on dealings between banks and troubled borrowers by requiring listed companies to report within one working day missed interest or installment payments on loans.

Publicly traded companies in India from Oct. 1 will need to notify the stock exchange of a default on a bank loan, following an order from the Securities and Exchange Board of India this month. The move may help Indian authorities to stem mounting bad loans by putting pressure on borrowers to honor obligations and banks to improve credit vetting.

“Transparency has finally arrived — a little late, but never the less a welcome arrival for an information-hungry market,” Hemindra Hazari, a Mumbai-based independent banking analyst who publishes at Smartkarma. “While this may improve borrower discipline, there will be tremendous pressure on banks, financial institutions and credit rating agencies, and on their credibility.”

Mounting bad loans are hurting lender profits and sapping their ability to support growth, with the government and the Reserve Bank of India increasingly having to step in to prop up weaker state-owned lenders. Stressed or non-performing assets, restructured debt and advances to companies that can’t meet servicing requirements at local lenders was 17% by the end of December, the highest among major economies, according to finance ministry data released earlier this year.

The one-day reporting requirement will also apply to defaults on commercial paper, medium-term notes, foreign-currency convertible bonds, and other listed securities. Defaults on bonds and syndicated loans from companies are at record $1.9 billion so far in 2017, compared with a total of $494 million for full-year 2016, according to data compiled by Bloomberg.

“Many banks are presently under considerable stress on account of large loans to the corporate sector turning into stressed assets,” Sebi said in a statement on Aug. 4. Companies in India continue to be primarily reliant on loans for funding and the new order addresses a “critical gap in the availability of information to investors,” according to the statement.

“There will be less information asymmetry and all lenders will get to know signs of financial distress,” Ananda Bhoumik, chief analytical officer at India Ratings and Research, said in a phone interview. “It forces companies to evaluate strategy and do something to solve the problem. It will help in early sighting of signs of any potential distress in borrowers.” — Bloomberg

Davao-UP gym in P8-B sports complex nears completion

DAVAO CITY is eyeing to host several national and international sports events with the completion of the 20-hectare Davao City-University of the Philippines (UP) Sports Complex. “The Davao City Sports Complex Multi-purpose Gymnasium is now 90% complete while the open-air Stadium 1 is about 80% complete,” former District 3 Rep. Isidro T. Ungab told BusinessWorld. Mr. Ungab was chair of the committee on appropriations when the P450-million fund for the facility’s Phase 1 was approved and included in the 2015 national budget. Phase 1 covers the P100-million gym, oval track, lightings, and road leading to the sports complex. Mr. Ungab said there is no fund source yet for the next phase of the project, which is estimated to have a total cost of P8 billion. “So far the progress of the construction is within our timetable. We are optimistic that we can host the Palarong Pambansa 2019,” Mr. Ungab said. — Carmencita A. Carillo

Stop the killings, build the good institutions

We the women and men of Action for Economic Reforms express our indignation over the government-sanctioned killings of thousands of Filipinos, mostly the poor.

The persistent and even surging increase in the number of bodies strewn all over, underscored most especially by the execution of Kian Loyd delos Santos, has deservedly triggered widespread condemnation from almost all social spheres and political colors.

The mounting deaths, at the very least, should have sobered President Rodrigo R. Duterte, who used the drug problem as a political campaign only to realize later that the menace can easily outlive his political term. That Mr. Duterte himself has acknowledged that he could not fulfill his campaign promise of ending drugs within six months of his term and could not lick the problem over the his entire term already suggests a failure of his drug policy.

While we agree that the drug problem must be taken seriously, we strongly disagree with this government’s assertion that the drug problem is strictly a criminal issue, and thus also disagree to the government’s chosen policy of punishment and extrajudicial retribution. The most rigorous of research and the most successful of anti-drug campaigns in the world over put forth one declaration: drug addiction is a disease of the brain rather than a moral failing. As such, the government’s approach is myopic, reductionist, and destined to fail.

We state our position with no equivocation: We condemn the murders in the strongest possible terms. This culture of death and impunity has no place amongst a people dedicated to building a just and humane society, and in an elected government that is supposedly dedicated to a regime of truth and justice.

Mr. Duterte rails against a busted system, including a justice system that undermines justice itself. Indeed, we must change our weak and corrupt institutions, but Mr. Duterte’s directives and actions are supplanting bad institutions with the worst kind of institutions. Any “second best” way to address bad institutions should translate into the long-term development of good institutions, not the destruction of good institutions.

We welcome the call to investigate the killing of Kian, especially if it is to become a catalyst for the formulation of a better drug policy. The murder of Kian ought not be seen as an isolated case, but rather a piece of the fabric of our society that has been frayed and torn and bloodied. This probe therefore must be a first step in overturning the current violent drug policy, and ensuring that the perpetrators of extrajudicial killings, no matter what position in government they hold, are held accountable.

Any investigation must not lead to a whitewash, which will further destabilize our society. Remember, for example, how the whitewashing of the investigation of Ninoy Aquino’s murder, (his martyrdom which we commemorate on Aug. 21) further intensified resistance, a resistance that transformed into people power that overthrew the Marcos dictatorship.

To quote President Duterte himself in his tribute to Ninoy Aquino, “up until the very end of his life, he inspired a peaceful revolution.” Let us protect the gains from this peaceful revolution. Fight for peace, fight for justice.

Cristina Morales Alikpala, Jessica Reyes Cantos, Jenina Joy Chavez, Jo-Ann Latuja Diosana, Cielo Magno, Rafael Paredes, Victoria Viterbo Quimbo, Rene R. Raya, Filomeno S. Sta. Ana III are senior fellows of Action for Economic Reforms.

Antetokounmpo to miss EuroBasket

Over the weekend, Bucks star Giannis Antetokounmpo saw fit to post a lengthy message on Facebook announcing his absence from EuroBasket 2017 due to injury. Calling it “the biggest disappointment I’ve ever felt in my career,” he underscored that he wanted to suit up for Greece in the regional championships, but could not because of significant pain in his right knee. Per the National Basketball Association (NBA) franchise employing his services, he was made to undergo “a series of exercises” that he had to abort shortly after starting due to extreme discomfort on even basic movements.

To argue that the hoops federation of Greece was disappointed with the turn of events is an understatement. In a news release, it noted that Antetokounmpo’s decision was borne of “an organized and well-staged plan” by the Bucks to prevent its top dog from suiting up for EuroBasket. “Everything was in full knowledge of the NBA, if not encouraged by the NBA, and the athlete was put in a very difficult position.” No doubt, it recalled the need for the reigning Most Improved Player to put off signing a contract extension so he could burn rubber for flag and country in an Olympic qualifier last year.

Needless to say, the denial came, and swiftly. “The NBA and the Bucks have followed all appropriate protocol under the NBA-FIBA agreement,” NBA senior vice-president of basketball communications Tim Frank said. “Giannis has an injury that has been confirmed through multiple examinations, and any suggestion to the contrary is false.” And according to Eurohoops.net publishing manager Nikos Varlas, Antetokounmpo has had concerns with his right knee since he was 16; in a Q&A article, the scribe pointed out that “there are many times when the knee is irritated in the meniscus area,” and that he “often plays with painkillers and injections.”

Interestingly, Antetokounmpo has missed 10 NBA games, but only one due to injury, since he was drafted 15th overall in 2013, a fact that, depending on point of view, can highlight either his durability or the care with which he looks after himself. Judging from his Facebook post, it’s clear that he wanted to play, and would have if he could — although why he couldn’t is the subject of speculation. That said, it’s also clear that he wants all and sundry to move on. “I ask everyone not to make of my absence more than it already is.”

Considering how Greece federation general secretary Takis Tsagronis has been crying foul, relations with the Bucks aren’t likely to be smoothed out anytime soon. Which is unfortunate, because Antetokounmpo is just 22 and primed for more international exposure. In the final analysis, he will invariably be making the calls, swayed by entreaties rather than criticisms.

Anthony L. Cuaycong has been writing Courtside since BusinessWorld introduced a Sports section in 1994. He is the Senior Vice-President and General Manager of Basic Energy Corp.

Davao Light, Daneco firm up offer to buy TransCo assets

DAVAO CITY — Power distributors Davao Light and Power Co. (Davao Light) and the Davao del Norte Electric Cooperative, Inc. (Daneco) have formalized their offer to buy the sub-transmission assets of National Transmission Corp. (TransCo) in Davao del Norte.

A notice from the Energy Regulatory Commission (ERC) indicates that it has scheduled a hearing on the purchase proposal worth about P4.705 million on Sept. 20 in Davao City. Officials of both distribution entities declined to comment on their proposal pending the hearing.

Davao Light and Daneco are offering to buy the Bingcungan-Madaum 69-kilovolt line and Bingcungan-Tagum 69-kilovolt line of TransCo.

The hearing, based on the ERC notice, will tackle compliance of requirements, including the presentation of facts for the sale.

TransCo and the Davao Light-Daneco partnership completed the contract for the sale on March 16, 2012, about four months after the start of negotiations.

The government transmission company initiated the sale after the ERC, on July 16, 2011, issued a resolution amending its rules on the sale of TransCo’s sub-transmission assets.

The partnership between Davao Light, a unit of Aboitiz Power Corp., and Daneco dates back to 2011.

The two utilities both serve the province of Davao del Norte, with Davao Light covering the towns of Carmen, Dujali and Sto. Tomas as well as Panabo City, while Daneco handles the rest of the municipalities and the neighboring province of Compostela Valley.  They jointly provide power to the Island Garden City of Samal. — Carmelito Q. Francisco

Dear LTFRB, let’s fix you

Yes, yes, I know: the very suggestion that a government agency named Land Transportation Franchising and Regulatory Board needs fixing sounds preposterous. You, after all, are used to doing the supervising and the regulating. But these are unconventional times. We live in an age when people no longer buy postage stamps in order to write to a distant loved one, because the mere press of a button can relay the same message in seconds. So you, as the country’s chief steward of jeepneys and buses and tricycles and pretty much any wheeled vehicle that transports human passengers for a fee, need to adapt to a fast-changing digital world if you hope to continue being relevant and useful.

It seems you’re already getting up to speed as far as going digital is concerned. I understand, for instance, that your Web site is under construction to make it more interactive. You plan, in your words, “to conduct an online weekly session to answer current issues, and to facilitate information dissemination.” I also reckon you’re working overtime to keep up with the evolving demands of 21st century commuting. Your inane sound bites aside, you do come across as well-intentioned.

But your ongoing (and quite frankly frustrating) tussle with the app-based ride-sharing company Uber reveals an important lesson in business management that you need to take seriously. Oh yes, you’re a business. You have shareholders (the public), you collect revenues (registration fees from PUV operators), and you employ workers (your underpaid staff, obviously). Whether you realize it or not, you are, for all intents and purposes, a company, and you have a brand to protect.

So here’s the unpleasant news: Your brand sucks. Everybody hates you. No one trusts you. If you were a restaurant, you could announce free food and nobody would show up to take advantage of your generosity. That’s because you have a history of serving expired, rancid stuff. You could hire a Michelin three-star chef to run your kitchen and still no one would touch your menu. Your reputation is that bad.

Last week, in response to criticism that you were focusing too much on Uber, you released a table showing a detailed breakdown of colorum (illegal) vehicles you had impounded from June 2016 to July 2017. The figures bore the glaring fact that apprehended Uber cars represented a minuscule percentage of impounded units (16 versus 469 UV Express vans, for one). The intent was to demonstrate that you were doing your job, and that you were doing it fairly. But the social-media reaction was overwhelmingly negative, most everyone calling the statistics a joke.

“Are you sure there were only 13 colorum jeepneys and 38 colorum taxis?” asked an incredulous lady.

“Either your data is inaccurate or you’re not doing your job well,” quipped an unconvinced guy.

“And you had the gall to publish this?” added another.

But perhaps the most scathing remark of all was this: “We know you’re a bunch of lying, corrupt bastards. You had the opportunity to redeem yourselves… but proved even more why we should just get rid of you.”

Of course we can’t get rid of you. The longevity of your existence is not ours to decide. But fault-finders can make life hell for you just by making noise and harassing you at every turn — or by pressuring grandstanding lawmakers to overhaul the nature of your office. Why put up with all that distraction?

See, that’s the problem with someone who has a tainted track record. No matter what you do moving forward, you will be met with skepticism and cynicism. Nothing you do will be good enough. Nothing you accomplish will ever have meaning in the public eye.

I know what you’re thinking: you don’t need our approval. You’re not competing in a popularity contest. You don’t covet Facebook likes that venal influencers will sell their integrity for. That you don’t mind sporting a villainous image in the performance of your task is actually commendable. Your insistence on suspending Uber in the face of hostile resistance takes titanium balls our crowd-pleasing senators clearly do not have. It shows you will not allow overdramatic sentiments to stop you from fulfilling your mandate.

But… we go back to your biggest issue. You have a credibility crisis. So bad you may have to consider changing your name and logo. If musicians (see Prince) and athletes (see Ron Artest) are able to adopt new monikers when they want to reinvent themselves, so should government agencies (see DoTC). I think Filipinos will be more responsive to “The Agency Formerly Known As LTFRB.” Or something else. Just ditch that vile acronym that’s now forever synonymous with graft and incompetence. You could make teleportation a reality tomorrow and motorists would still flog you online. Your name is officially the kiss of death. Hey, come to think of it, you last had a name change in 1987 — the longest such streak in the history of your organization.

And what about your antediluvian logo? People look at that emblem and they see black smoke from dangling exhaust pipes. They stare at that badge and they picture sleazy manong drivers. They encounter that symbol and they visualize the commuting netherworld.

It’s time to restyle you. Time to give your identity some drastic makeover. Time to make you sexy is what I’m saying. I don’t care how you do it. Hold a nationwide naming contest. Pay a brooding artist to pencil a cool, forward-looking logo. Hire an award-winning advertising agency to put together a rebranding campaign. Whatever. Just revamp your persona.

Until you do, Uber and its kind will continue to pummel you in the PR game. Mercenary social-media warriors will continue to weave soap operas around you. Metro Manila residents will continue to curse you. Trolls will continue to send you death threats. Politicians will continue to throw you under the bus. And newspaper columnists will continue to give you stupid advice.

You may e-mail the author at vbsarne@visor.ph.

How PSEi member stocks performed — August 22, 2017

Here’s a quick glance at how PSEi stocks fared on Tuesday, August 22, 2017.

Stable marts revive push for outbound investor plan

IN THE LATEST SIGN that China is regaining control of outflows and confidence in market stability, talk of a plan to expand individuals’ investment options abroad is gaining new momentum two years after turmoil and capital flight led authorities to shelve the proposal.

China
A man ferries a girl on an electric bicycle along a street in Beijing on August 16, 2017. — AFP 

The foreign-exchange regulator is seeking State Council approval for a pilot plan that could allow Chinese for the first time to individually invest in securities traded overseas, according to people familiar with the matter. The State Administration of Foreign Exchange plan would start in cities including Shanghai and Tianjin and would keep in place a $50,000 annual limit for residents seeking to convert yuan to foreign currencies, they said.

The plan is significant because it would signal a departure from strict controls on outbound investment by individuals and companies, including an announcement last week that further restricted the types of investments domestic companies can make abroad.

The people said a pilot program wouldn’t be possible until after the Communist Party Congress — the timing of which has not yet been announced but is expected this fall. Factors determining whether the trial would go ahead include ongoing stable financial markets as well as continued control over the outflow of yuan, the people said, noting there’s no guarantee that the program will be launched. It has been under discussion for years.

“It doesn’t look likely to be implemented this year, given that the authorities are still wanting to contain outflows, with the State Council’s ruling last Friday on outbound investment the latest on that,” said Khoon Goh, head of Asia research at Australia & New Zealand Banking Group in Singapore. “I think the $50,000 limit will remain in place, as it is a means of ensuring that any outflows are limited.”

EXTENSIVE STUDY
The central bank has reviewed a months-long study of the proposal and is prepared to move ahead with a pilot program once it receives approval from the State Council, said the people, who asked not to be identified because the matter hasn’t been made public.

The foreign-exchange regulator didn’t immediately reply to a fax seeking comment. In an email, the People’s Bank of China said it had not submitted a report to the State Council regarding the program.

The plan, known informally as QDII2, is a trial for Chinese citizens to invest in securities traded abroad. The proposal is an extension of QDII, or qualified domestic institutional investor program, that the government launched in 2006, which allows individuals to buy securities in overseas markets through asset managers.

Momentum has built for QDII2 for years, with central bank Deputy Governor Pan Gongsheng cited by the Securities Times as saying in 2015 that “ conditions are ripe” to roll out the program in some places.

Not long after, China’s stock markets plunged in a $5 trillion share selloff, and investors started shifting capital overseas, betting the yuan would keep falling.

The fact that the program is again being actively discussed reflects leaders’ confidence that capital movements have returned to a more stable level. As yuan outflows abate, authorities want to refocus on economic reforms and show global markets that China is still committed to opening up, according to the people. — Bloomberg

PHL tech outsourcing market seen at $500 million by 2021 —IDC

TECHNOLOGY outsourcing services in the Philippines are expected to attract spending of over $500 million by 2021, International Data Corp. (IDC) said in a report.

According to the IDC APeJ Semiannual Services Tracker, digital transformation (DX) initiatives of enterprises, as well as changing patterns of information technology (IT) procurement and rapidly-evolving service delivery models, will push the Philippine technology outsourcing market to continued growth.

Technology outsourcing includes outsourcing of both core and non-core functions.

The report also said digitalization has created opportunities for new areas of business and organizational structures. As companies increasingly engage in DX efforts, outsourcing has been viewed a way to address business challenges, such as the growing complexity of information and communications technology (ICT), lack of ICT budget, and the need for proper governance.

“The Philippine outsourcing market is undergoing a dramatic transformation propelled by the increasing adoption of disruptive technologies. CIOs and technology leaders tap external capabilities to support their DX initiatives, meet ever-changing customer demand, implement solutions faster, and reduce cost,” said Alon Anthony Rejano, market analyst for services, IDC Philippines.

“In the age of greater automation, standardization, and modernization, external providers need to keep up and redefine their value proposition, offering new delivery and consumption models,” Mr. Rejano added.

Mr. Rejano also told BusinessWorld in an e-mail that the outsourcing market in 2016 and 2017 was $283 million and $313 million, respectively, showing a 10.5% growth rate year over year. The compound annual growth rate by 2021 is projected at 12.33%.

The report also said that multiyear and multimillion-peso outsourcing deals are decreasing as end-users look at lowering costs and shift to the cloud. This then adds price pressure on providers, which drives vendor consolidation. IDC recommends that end-users study where each outsourcing deal fits in the sourcing scale so that appropriate governance mechanisms can be put in place.

“The outsourcing market will remain a tough market for competition in the coming years. Local customers want to see vision and a strong offering, and while they want a partner for the long term, they are also willing to consider new partners that offer innovation,” Rejano added. “Providers need to demonstrate thought leadership throughout the lifetime of the contract and provide high-quality service to help transform customers with DX agenda.”

Mr. Rejano told BusinessWorld that the future is positive for the Philippine market despite being behind the more advanced markets in the Southeast Asian region.

“The future looks bright for the local outsourcing market because of the increasing demand for data center services and usage of cloud and security. As a developing nation, we’re a bit behind more advanced markets such as Singapore, Indonesia, and Malaysia in terms of technology outsourcing. Local organizations are in wait-and-see mode on IT outsourcing, since they really want to assess the capabilities of the providers and get an assurance that everything will work fine from the provider’s end.”

Mr. Rejano also said that the complexity of the changes occurring in the IT industry give the market new opportunities: “Outsourcing and managed services will continue to present market opportunities due to the lack of skills and the rising complexities of enterprise IT environment.

Key industries like banking, financial services and insurance and the public sector have shown a significant change on the adoption of outsourcing. IT outsourcing has grown beyond data center hosting to include cloud, application development and management, and back-office functions, he said. — Patrizia Paola C. Marcelo