Interview with Ralf Ellspermann, CEO of Piton Global

The Philippine economy from an investor's eyes. Photo: Piton Global

MANILA, April 6, 2013 – As the Philippines elevates itself out of its past perception as a hostile environment for business—a transformation largely due to macroeconomic stability and a greater focus on transparency and eliminating corruption—it has been earning a reputation for strong economic growth. The World Bank has even dubbed it a “rising tiger” of Asia. As a result, multinational companies have set their sights on this developing nation.

Perhaps the most striking indicator of the Philippines’ economic prospects is the prevalence of international companies that have decided to outsource many of their business processes to this country, knowing the value of its people’s skills. Piton Global is one such company. 

Long a leading inbound call center service provider in Manila, the company’s website notes that is “specializes in customer acquisition, management and retention services for high growth start-ups, leading mid-market enterprises, and Fortune 500 corporations.” A major part of Piton’s enterprise is the operation of “two state-or-the-art call center facilities in Ortigas and Makati City.” The company’s services “include customer care, inbound sales, and tech support. All services are delivered from the company’s service delivery centers in Manila, Philippines.” 

Today, we interview Piton Global’s Chief Executive Officer, Ralf Ellspermann, on the current economic zeitgeist in the Philippines. 

Johann Carpio: As a businessman, has it always been your practice to regularly check stock performance? Do you place importance on this regular checking or do you simply rely on your business signals? 

Ralf Ellspermann: Not really. At least, not as a businessman.  Minor fluctuations on the stock market have had hardly any impact on my business. Over the last 10 years, I have been mostly relying on other business signals. 


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JC: Do you think the growing business process outsourcing (BPO) industry has a direct impact on domestic consumption? 

RE: Absolutely. More domestic employment equals more domestic consumption.

JC: How do you think the BPO industry affects the stock market and in what terms? 

RE: I am not sure if it does, but it could very well be the case.  Shifting jobs, e.g., from high-cost to low-cost designations is definitely helping publicly listed companies to gain and maintain a more competitive edge— and this could have a positive effect of the company’s performance on the stock market. 


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JC: In your opinion, what are the main factors of the BPO industry that correlate with the stock market? 

RE: In short, a growing offshore BPO industry could be an indication of a deteriorating global economy. 

JC: Do you think that the current stock market will continue on its trend? 

RE: It seems that we are currently on an upward trend. Even experts in the field have a hard time [regarding] meaningful predictions. We all know that things can change very fast on the stock market. 

JC: How do you think the stock market’s performance affects your business as a whole? 

RE: It does not affect my business that much, since our clients are predominantly small- to medium-sized enterprises. 

Further Positive Outlook for Foreign Investments 

Ellspermann’s sentiments are ones that are shared by an overwhelming number of foreign businesses. 

The projections of Standard Chartered Bank for the Association of Southeast Asian Nations (ASEAN), drawing from a sample of over 900 investors, indicate the Philippines is in the lead for areas of development—edging out even Singapore and Malaysia, a fact illustrated in the adjacent chart:

The Philippines seen as ASEAN economic frontrunner by Standard Chartered bank. (Credit: Standard Chartered Bank)

“The Philippines was the standout country in terms of the strength of on-the-ground sentiment,” Standard Chartered noted. “We expect the Philippines to see stronger investment growth this year, sustaining the strong momentum from 2012.” 

“The case for investment grade is supported by a number of factors, including a resilient economy, a current account surplus, stable fiscal policy, and the narrowing of the budget deficit,” the bank explains, solidifying its outlook. 

The study also cited improvements in infrastructure, the peace process with the rebellious Moro Islamic Liberation Front, the increasingly strong peso, and the progressing decreases in the national deficit (aided by the new “Sin Tax”) as additional reasons for their report. 

“We are optimistic that the Philippines will outperform the region and enjoy another year of strong growth momentum in 2013,” Standard Chartered said, adding that they expected that the Philippines will reach investment grade by the end of fiscal year 2014. 

Furthermore, the continued strengthening of the stock market has increased confidence in companies seeking to invest in the Philippines. The expansion of BPO offices is ongoing as well, despite the waning of this type of business in other nations in Asia. For the Philippines, the indications are clear. 

The international economy continues to recover from far-ranging economic crises, and more and more businesses are veering away from established practices and looking towards a sustainable future. 

As an investor favorite, the Philippines is at the forefront of development, ready to lead a region on the cusp of becoming a global economic giant.

 


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Johann Carpio

Johann has a degree in Philosophy and Human Resource. He is a business development specialist at Xight Interactive

 

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