US BPO firms put expansion plans on hold

MANILA, Philippines – After reeling from President Duterte’s rhetoric last year, American outsourcing companies remain jittery on expanding their operations in the country, this time due to President Donald Trump’s pronouncements.

Philippine Economic Zone Authority (PEZA) director general Charito Plaza said there are a lot of American business process outsourcing (BPO) locators who have expressed interest to expand but are now holding off investments because of the new American leader.

 “Most of the BPO companies want to invest, but they have decided to halt it because they are still waiting to see what will be President Trump’s other pronouncements,” Plaza said.

“I conducted a dialogue with our locators. All the American companies here in the Philippines, that is their worry. They are observing. They are waiting for the announcements of Trump. So they will not expand for the meantime,” she said.

Trump, who was sworn into office as the 45th US president last Friday, has been vocal on his protectionist and anti-outsourcing stance.

Although there may be hesitation about future expansions among American BPO firms in the country, Plaza is not worried about them pulling out from their existing local operations.

“Majority of the American companies under PEZA are already established. They’ve been here for more than 30 years, so I don’t think they will move out,” she said.

Normally, Plaza said, American companies account for 12-to 16-percent of total investment pledges PEZA approves annually. Japanese account for the largest.

Investment pledges approved by the agency last year dropped by a little over a quarter last year to P218.18 billion from the P295.09 billion registered in the previous year.

Last year, Duterte’s anti-US stance alarmed American BPO companies operating in the country, prompting the Information Technology and Business Process Association of the Philippines (IBPAP) to seek an audience with the President to discuss their concerns.

IBPAP said concerns among their members were addressed after government officials clarified the President’s statements.

The country’s information technology and business process management industry is eyeing to generate revenues of $38.9 billion by end 2022, produce 1.8 million jobs, and increase its share of the global market to 15.5 percent.