BSP: Stronger peso poses no threat to BPOs
The Business process outsourcing (BPO) industry, which is fueled largely by foreign investments, will remain vibrant even as the peso continues to strengthen, the Bangko Sentral ng Pilipinas said.
The BSP has shrugged off concerns that the appreciation of the peso may eventually weigh on the performance of the BPO sector—a key driver of the Philippine economy.
According to BSP Deputy Governor Diwa Guinigundo, most BPO firms do not rely on the peso-dollar exchange rate to remain competitive.
“They rely mainly on the skill and versatility of their manpower,” Guinigundo explained.
The Philippines will remain one of the most attractive sites for foreign firms engaged in outsourcing services because the skills of Filipino workers allow companies to save on training costs, the BSP official said.
“Here, companies do not have to train Filipino workers on English and other skills as much as they have to in other countries,” Guinigundo said.
The BSP expects the BPO sector to be a key source of foreign direct investments and a major driver of economic growth for the Philippines over the medium term, he said.
In 2011, revenue generated by the BPO sector stood at about $11 billion. Also, 640,000 related jobs were filled that same year.
The Aquino administration has set the BPO revenue target at $25 billion. It also expects to generate at least 1.3 million jobs by 2016—the end of the President’s term.
But because of the sharp appreciation of the peso, some economists are now concerned that the attainment of medium-term targets for the BPO sector may be in jeopardy.
According to economists, a stronger peso makes investing in the Philippines costlier for foreign businesses. Salaries in dollar terms, for instance, become more expensive whenever the peso appreciates against the US dollar.
Last Friday, the peso hit a four-year high against the greenback, closing at 41.42.
The economy’s growth performance led to the appreciation of the peso, which monetary officials said was caused by higher demand for peso-denominated securities.
The Philippine economy grew by 6.1 percent in the first semester from that of a year ago—one of the fastest growth rates among Asian economies during the period.
The Philippines is a global leader in business process outsourcing.
Subscribe to INQUIRER PLUS to get access to The Philippine Daily Inquirer & other 70+ titles, share up to 5 gadgets, listen to the news, download as early as 4am & share articles on social media. Call 896 6000.