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Wednesday, November 29, 2023

Outsourcing firms staying ­– US envoy

US Ambassador to the Philippines Sung Kim on Tuesday downplayed reports that American business process outsourcing companies are holding off expansion in the Philippines.

“We don’t see big downturn on BPO engagement here any time soon,” Kim told the Makati Business Club during the group’s membership forum in Makati City.

“What we see is a dedicated workforce in an environment of competitive wages and the cultural affinity that drive US companies to set BPO operations here in the Philippines,” the US envoy said.

He said despite the relative policies that might come out from Washington D.C., the attractive positive advantage would not change US companies’ perception of the Philippines.

US Ambassador to the Philippines Sung Kim

Majority of the BPO companies in the Philippines are headquartered in the US, including Convergys, the largest private sector employer in the country.  About 70 percent of revenues from BPO operations in the Philippines originate from American companies.

Kim also assured that the US Embassy in the Philippines would continue to accommodate US via applicants, despite the immigration ban issued by the US to immigrants from seven Islamic countries.

The embassy was processing at least 20,000 US visa applications on a monthly basis.

“Personally, I don’t see US engagement slowing down or halting in the Philippines soon,” Kim said.

Meanwhile, research company International Data Corp. said evolving BPO sector into higher-value services around contact centers, medical transcription, software development, animation and game development and global captive operations centers would still be very much viable in the short term, given the country’s inherent strengths. 

IDC Philippines business operations head Jubert Alberto, however, said in the longer term,  the sector's growth outlook could change due to the shift in pivot and policy changes in the Duterte and Trump administrations.

“This may lead to an impression of the country’s volatility and together with issues on manpower and availability of skill sets, it may result in the industry stagnating in the near future due to lack of new investments and expansionary plans from incumbents,” Alberto said. 

“Far-reaching measures to address key issues are of paramount importance this year,” he said.

The Philippine Economic Zone Authority earlier warned that the expansion programs of the BPO sector might be put on hold due to the proposed  policy in the US on offshore services such as business process outsourcing.

The IT-Business Process Association of the Philippine remains optimistic about its outlook because of the interest  of many countries in investing in the Philippine IT-BPM services such as the United States, Japan, New Zealand, Australia, Canada and India.

The IT-BPAP targets to generate 7.6 million direct and indirect jobs by 2020 and create 500,000 jobs outside Metro Manila.

The  industry also  expects  to earn $40 billion by 2020 with a 15-percent global market share.

The Philippine IT-BPM industry generated $22.9 billion in revenues last year and provided direct employment to 1.15 million Filipinos with an additional 3.68 million jobs outside the industry, both indirect and induced employment. With Darwin G. Amolejar

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