BPO sector coping well with wage hikes – lawmaker

MANILA, Philippines - Pasig City Rep. Roman Romulo yesterday said he expected the business process outsourcing (BPO) sector to cope well with “reasonable wage increases.”

“We do not see the P15-inrcease in the daily minimum wage (for private sector workers in Metro Manila) influencing the decision of BPO players to either step up, or slow down hiring,” he said.

Many college-educated, highly skilled employees in the BPO sector already receive superior wages, he said.

He added that while the recent wage hike would not directly benefit these employees, the increase would create “wage distortions” in their favor.

Romulo pointed out that a wage distortion is usually corrected through commensurate pay increases for those employees not covered by the specified increment.

“Fair wage increases will not diminish the country’s global competitiveness. If we look at India and our other competitors in the BPO space, their wages are rising faster than ours,” he stressed.

Foreign exchange rate fluctuations tend to have greater weight on BPO operations than wage increases, he said.

“Like exporters, BPO firms sell their services to overseas clients. They generate revenues in US dollars, but spend for their operations here in pesos,” he said.

He said a weak peso and a strong dollar are considered beneficial to BPO firms.

Romulo is author of the Data Privacy Act of 2012, which has helped to attract global firms to either establish new in-house outsourcing units in the Philippines, or relegate their non-core, business support activities to independent BPO providers operating here.

The law mandates all entities, including BPO firms, to protect the confidentiality of personal information collected from clients and stored in IT systems, in accordance with rigorous international privacy standards.

Last week, the National Capital Region’s Tripartite Wages and Productivity Board ordered a P15-increase in the minimum wage.

The new P481 statutory floor wage will take effect sometime next month, or 15 days after publication.

The increase is expected to set off similar upward adjustments in the minimum wage in other regions.