Local BPO firms remain bullish

MANILA, Philippines - The local call center industry said it remains bullish on its growth prospects despite a US bill seeking to remove tax incentives to companies that outsource services.

By 2016, the local process outsourcing (BPO) industry forecasts revenues to grow $25 billion, representing 8.6 percent of the country’s gross domestic product (GDP), and generating 1.3 million direct jobs.

“We are not worried. What we are confident of is that the US will continue to do what is best for it,” said Alfredo Ayala, chairman of the Business Processing Association of the Philippines.

During a press conference yesterday, Ayala said tax incentive is not the primary reason why companies in the US outsource services.

Alejandro Melchor III, deputy executive director for ICT Industry Development of the Department of Science and Technology-Information and Communication Technology Office, said the primary reasons US firms outsource is access to talents and the business environment in the Philippines.

Melchor said the cheaper cost of outsourcing in the Philippines only comes in third on the list of these reasons.

“It is the US firms who will quietly lobby their Congress (against the passage of the bill),” he said.

According to Melchor, the passage of such legislation is “very unlikely” especially since virtually all US firms do outsourcing.

But still, the local BPO industry is also expanding to other countries, like Australia, in the worst case scenario that such legislation is passed, said Ayala.

According to the DOST, the BPO industry is estimated to have contributed 5.4 percent of the country’s GDP in 2011, and the government expects it to reach 8.6 percent by 2016.

“We are expecting BPO not only to contribute significantly to the GDP in the next five years, its most significant impact would be on employment,” said ICTO executive director Louis Casambre.

DOST Secretary Mario Montejo assured that the government is committed to strengthen the BPO industry despite developments in the US.

“We will not give up on the country’s position as number one in the call center sector,” he said.

Montejo said the DOST-ICTO has created the framework to implement its five flagship programs to develop the ICT industry.

The programs will focus on developing human resource capability, stepping up the value chain, promoting next wave cities, supporting the domestic ICT industry and ICT marketing and research.

Montejo said the government and the private sector intends to triple the size of ICT talent pool by 2016, improve employability by 200 percent and generate the academic-technical-soft skills that the industry requires.

New IT hubs will also be developed in the Cordilleras and the Ilocos regions, Central Luzon, Western Visayas, Central Visayas, Davao and Gen. Santos City.