BPO firm urges longer tax breaks, flexible labor laws

MANILA, Philippines—As competition in the global business process outsourcing space intensifies, the government may have to consider extending the number of years of tax breaks given to locators as well as amend archaic labor laws.

Maulik Parekh, president and chief executive of PLDT’s BPO firm SPi Global, said many countries, including some in the region, were giving “red-carpet treatment” to BPO firms just to entice them to invest there.

“The BPO market is getting more and more competitive. We need to fight harder as a country to protect our share of the market,” he said in a briefing Tuesday.

To attract new BPO locators and encourage existing ones to expand their operations here, he said the government should consider beefing up its incentives package and improving laws, rules and regulations that affected BPO players.

In the area of incentives, the current six-year tax break granted by the Board of Investments to qualified investors could be extended by a few more years, he said.

The country’s labor laws should also be improved, he said, to support employment opportunities in the BPO sector and to keep in step with the unique work requirements of the industry.

Apart from implementing better incentives and tweaking existing laws, he said the country should embark on a comprehensive branding campaign to make the Philippines top of mind among BPO players and clients, especially those outside the United States.

He said that in the United Kingdom, for example, the Philippines rarely came up when companies were asked to name ideal BPO destinations. The same was true in Australia and New Zealand. These countries had a wealth of opportunities for BPO investments if they could be reached by the local sector.

Since the start of the BPO boom almost 10 years ago, he said the competitive landscape had drastically changed. Before, the Philippines was pitted against India, Northern Ireland, Mexico, and Canada. Now, China, Vietnam, Sri Lanka, South Africa, Morocco, Egypt, and some Latin American countries have joined the fray.