Significant growth in BPO sector seen

The country’s business process outsourcing (BPO) sector will continue to grow significantly over the next 12 months despite efforts by American policymakers to discourage the “offshoring” of work to countries like the Philippines to address high unemployment in the United States.

Canada-based research firm XMG Global said in its annual “predictions” report that outsourcing would remain a key option for many companies in the US and Europe looking to cut costs and make operations more efficient.

“Offshoring is a manifestation of an ongoing economic evolution that will not go away,” XMG said.

“As for the reintroduction of the Anti-Offshore Bill due to the upcoming US elections, XMG believes this is purely election-year politics and will not dampen globalization of services,” the firm added.

The company said the outsourcing sectors of countries like the Philippines and India were likely to grow as much as 20 percent this year.

“With the lingering effects and lessons of the 2008 global recession still fresh among enterprises, a new genre of corporations will continue to look offshore to seek new ways to reduce operating costs and maximize productivity levels,” XMG said.

The firm said the latest anti-outsourcing proposal would not be enough to deter companies from setting up shop in destinations where labor costs were considerably lower and productivity rates higher.

The Business Processing Association of the Philippines (BPAP) said in its 2011 report that the BPO industry was now the second-biggest contributor to the local economy next to remittance inflows from overseas Filipinos.

The report further stated that the BPO sector contributed close to $9 billion in export revenues last year, representing a 4.8-percent share of the country’s GDP. The target for 2012 was set at $11 billion.

By 2016, the industry group expected the country’s BPO revenues to hit the $25-billion mark, or a 10-percent share in the global market and at the same level as OFW remittances.