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American BPOs here to stay

American business process outsourcing companies are likely to stay in the Philippines, as President Donald Trump focuses on bringing back manufacturing jobs and not service-oriented activities to the US, the Philippine Economic Zone Authority said over the weekend.

Peza made the statement after holding a trade mission to the US where it received reports that the US government’s concern was more on manufacturing industries than those engaged in the services sector.

“The Trump government is more worried about the state of manufacturing than its BPO business. There are reports that manufacturing output has declined over the years since many companies have moved out of US to more profitable sites,” said Peza director-general Charito Plaza.

Plaza said the US government would not press for US IT-BPOs to cut down their offshore operations which were limited to services.

She said reports showed a decline in internal manufacturing output in the US, enough for the Trump administration to consider calling all American companies back to the US.

Plaza, quoting US senior director for Asia Department John Goyer, said the US government was “seriously considering a regulatory intervention for some countries hosting some US manufacturing companies where the US has huge trade deficit.”

The US government mentioned a few countries, but they did not include the Philippines, she said.

Peza earlier wrote letters to US investors in the Philippines in search of clarification to the Trump government’s America First Policy.  Plaza said the agency was rewarded by comforting updates that the Philippines should not worry about US BPO firms moving out or holding off expansion.

Majority of the BPO companies in the Philippines are American companies. Convergys, the biggest BPO firm in the Philippines, is an American company.

About 70 percent of revenues from BPO operations in the Philippines originate from American companies.

The Philippine IT-business process management industry generated $22.9 billion in revenues last year. It also provided direct employment to some 1.15 million Filipinos and created an additional 3.68 million jobs outside the industry, both indirect and induced employment.

The growth of the BPO industry also drove the expansion of the real estate, retail and services sectors in the country.

The IT & Business Process Association of the Philippines said the growth of the industry was on track of the projections under the Accelerate PH Roadmap 2022.  The association said the industry was geared-up to face the challenges that, once overcome, would all the more increase global interest in local IT-BPM services and add export revenue for the country.

Topics: business process outsourcing , American BPOs , President Donald Trump , Philippine Economic Zone Authority , Peza
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