President Donald Trump’s promise to bring back jobs to the United States and renegotiate international trade agreements will have a serious impact on the Philippines, especially on sectors that are perceived to be heavily dependent on American investments.
The Philippine business process outsourcing industry, a sunshine sector that has generated over a million jobs and $22.9 billion in revenues in 2016, is naturally alarmed at Trump’s trade pronouncements. President Trump has not publicly cited yet US companies that have outsourced their operations to the Philippines. He has so far called the attention of major car companies that have been allegedly stealing jobs away from the US through manufacturing plants in Mexico and other nations.
But it will not be surprising if the new US president mentions sooner the practice of some American companies to outsource their accounting, medical transcription and other office jobs to the Philippines and threatens them with higher taxes and disincentives.
The Philippine Economic Zone Authority earlier warned that the expansion programs of the BPO sector might be put on hold because of Trump’s protectionist policies. 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.
US Ambassador to the Philippines Sung Kim has downplayed the reports that American business process outsourcing companies were holding off expansion in the Philippines, citing the “affinity that drive US companies to set BPO operations here in the Philippines.”
President Trump, however, is capable of doing the unimaginable. He has been tearing up international trade agreements, unmindful of the balance sheets of American companies trying to compete in the global arena.
Trump’s protectionist policies may not after all single out the Philippines. Just the same, the Philippines should broaden its economic ties and start reducing its dependence on US investments. The rest of Asia and the economies of Australia and New Zealand, for one, offer equal business opportunities that could supplement American investments.