Global crisis has positive effect on local BPO sector - survey

The Business Processing Association of the Philippines (BPAP) is confident that the current US financial crisis will be a boon to the Philippine business process outsourcing (BPO) industry even as the association expressed optimism that the sector will grow by 45 percent in terms of revenues each year inspite of the debacle facing not only the US but also the world.

BPAP chief executive officer Oscar Sanez projects that from $2 billion in 2004, the local BPO industry will increase its revenues from $12 billion to $13 billion by the end of 2010, with the Philippine sector getting 10 percent of the $130 billion in expected global BPO revenues in two years.

The local BPO sector ended 2007 with export revenues of around $5 billion and the number is expected to increase to $7 billion by end of this year. For the past three years, revenues have been growing by 40 percent each year. “We can attain a growth of 45 percent each year despite the financial crisis,” Sanez emphasized.

BPAP said it still expects growth in the information technology (IT) sector despite the global financial crisis, adding that the Philippine BPO sector will continue to grow by 40 to 45 percent each year despite the current turmoil that global economies and financial markets are experiencing.

 “Though there would be a ‘cooling down’ in terms of growth numbers, we still expect growth,” it emphasized.

From less than 100,000 in 2001, the number of people being employed by BPO companies has grown to over 300,000 to date.

Sanez explained that because of the financial crisis especially in the US which accounts for the largest bulk of clients for the local BPO industry, many foreign companies will continue to look for solutions on how to cut costs, and outsourcing many of their corporate functions remains to be one of the best ways to cutting costs.

 “The Philippines will still be in the best position to present itself as a viable outsourcing location because of its IT-BPO industry’s popularity and proven track record of its success,” BPAP added. 

In an interview, Sanez said that unlike other local industries, the BPO sector is still doing very well. One of the reasons, he pointed out, is the fact that existing and potential clients are looking for biggest cost-saving solutions and that the Philippine BPO industry offers a good option.

He also noted that in making decisions on how and where to outsource in the light of the current global financial crisis, foreign companies are expected to consolidate their outsourcing in the Philippines instead of having such services done in several countries.

Sanez revealed that aside from the local BPO sector’s traditional market which is the United States, the industry is now aggressively marketing in Europe (United Kingdom and Germany) as well as in other Asian countries (Singapore and Hong Kong) and in Australia. “Also, we are going after sectors, other than our traditional financial sector market. This includes manufacturing, retail, construction, to name a few,” he said. — Mary Ann Reyes, Aisa Osorio