DTI: US bill on outsourcing unlikely to hurt PH industry

Trade Secretary Gregory Domingo. dti.gov.ph photo

The Department of Trade and Industry remained confident that the recent declaration of President Barack Obama to withdraw support for “businesses that ship jobs overseas” will not make a dent in the booming business outsourcing process (BPO) industry in the Philippines.

At the sidelines of the Philippine Business Registry launching Friday, Trade Secretary Gregory Domingo noted that the passage of the pending US bill – the US Call Center and Consumer Protection Act – that seeks to withdraw incentives from US firms that will outsource jobs, was unlikely.

“We are monitoring the developments … but we are not concerned. The rally for this bill may be election related,” Domingo said, adding that this was a scenario seen in previous election years, 2004 and 2008.

And even if this bill will be passed, its impact on the Philippine BPO industry will only be minimal, according to the trade chief, as the bill will cover companies that serve federal offices or those that receive federal funding.

“Outsourcing will be here to stay no matter what legislation will be passed,” Domingo further stressed, noting that at the end of the day, competitiveness will play a huge role on the companies’ decision to outsource jobs to lower operating costs.

He also pointed out that the country’s BPO industry is already “very diversified” as it has since progressed from being “telephone operators” to those that offer varied services whether for IT, accounting or other services.  The country is currently regarded as the world’s top call center destination as more companies from markets like the United States turn to the Philippines due to the local workforce’s good English communication skills and strong cultural affinity to the US – reportedly an edge that would be hard to replicate anywhere else in the world.

The Business Processing Association of the Philippines 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 expects the country’s BPO revenue to hit the $25-billion mark, or a 10-percent share in the global market and at the same level as OFW remittances.