RP's poor showing in business surveys may harm BPO sector

MANILA, Philippines - The Philippines may lose its edge against its competitors in the business process outsourcing (BPO) due to the country’s poor showing in business surveys.

Preliminary results of an industry survey conducted by the Business Processing Association of the Philippines (BPA/P) and Out-source2Philippines (O2P) suggest that persistent negative publicity–such as poor showings in business surveys –are taking a toll on the Philippines’ brand image.

The survey showed that negative perception of the Philippines, including the tight labor market for knowledge workers, is increasingly viewed as a significant risk factor by the industry.

In spite of this, industry executives remain upbeat on the Philippines and still anticipate a further expansion. Respondents to the survey were BPO executives working in the Philippines.

The complete results will be released at the end of the month in the next regular CEO breakfast briefing conducted by BPA/P and O2P.

The preliminary data show that 51 percent of respondents indicated that “negative perception” of the Philippines is a level one, two, or three risk factor associated with doing business in the Philippines, and 20 percent said it is a level one factor.

A slightly lower percentage, 49 percent said the “tight labor market” is a level one, two, or three risk factor in their view, but 23 percent of respondents said it was a level one risk factor.

However, when respondents were asked to gauge the competitiveness of the Philippines, a majority of respondents or 56 percent indicated that doing business in the Philippines is less risky or much less risky than doing business in India.

India dominates the BPO industry, and is the world’s biggest provider of outsourced services. The Philippines is generally considered the number two provider of offshore outsourced services.

About 45 percent of respondents said that compared to India doing business in the Philippines involves about the same risk, more risk, or much more risk.

BPA/P chief executive Oscar Sañez said that the Philippine BPO industry is on track to expand approximately 20 percent this year, from $6.1 billion last year. The BPO industry employs approximately 400,000 Filipinos in a wide range of sectors.