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MANILA, Philippines – A lawmaker expects the business process outsourcing (BPO) sector to pay out P247 billion in salaries to hundreds of thousands of its workers this year, consequently contributing to an increase in the country’s consumer spending.
House deputy majority leader Pasig Representative Roman Romulo said that with the projected industry revenues of roughly $13 billion, BPO companies were expected to disburse approximately $5.85 billion in salaries alone this year, spending “40 to 45 percent of their revenues to compensate their staff.”
“No matter how we look at it, P247 billion represents a huge amount of money being course through the economy every year,” he said, pointing out that the industry – encompassing contact center services, back offices, medical, legal and other data transcription, animation, software development, engineering design, and digital content – is driving consumer spending up – helping create a recurring demand for goods and services in the country.
He cited a Bangko Sentral ng Pilipinas survey which indicated that BPO workers on the average got P383,863 in annual compensation.
Last year, the BPO industry posted $11 billion in revenues on a labor force of 638,000. BPO firms are expected to create some $27 billion in annual revenues and provide jobs for some 1.3 million Filipinos by 2016.
For this year, the Business Processing Association of the Philippines said that the BPO the sector was looking to generate 126,000 more employment opportunities in the country and earn an added $2 billion.
The P247 billion worth of wages “is equal to around 14 percent of the national government’s P1.816 trillion spending program this year, and larger than the budgets of the top five departments,” said the lawmaker.
This year, the Department of Education is spending P238.8 billion; the Department of Public Works and Highways, P125.5 billion; the Department of National Defense, P107.9 billion; the Department of Interior and Local Government, P101.4 billion; and the Department of Agriculture, P54.1 billion.
According to Romulo, P247 billion is 53 percent higher than the Social Security System (SSS), Government Service Insurance System (GSIS), and Philippine Health Insurance Corporation’s (PhilHealth) paying out P161 billion in combined annual benefits to its members.
The SSS paid P76 billion worth of benefits to its members back in 2011 while the GSIS and PhilHealth paid P50 billion and P35 billion, respectively.