BPO boom continues to fuel Phl economy

CEBU, Philippines - An economist said that the recent closure of one call center company that affected over 600 workers should not cause an alarm for the entire Business Process Outsourcing (BPO) industry in the Philippines, particularly in Cebu.

“What happened was only a ‘drop in the ocean, it’s extremely exceptional. What is 600 people to a total of more than half a million working for the BPO industry. It’s [definitely] a peculiar problem,” said economist Bernardo Villegas.

Villegas downplayed impressions that what recently happened, where in an American-based call center Direct Access Corporation dismissed more than 600 call center agents for the reason of bankruptcy after a year of operation in Cebu.

“Don’t worry about what happened recently,” Villegas assured Cebuanos, saying that the BPO industry will continue to fuel the economy of the Philippines, while the United States and Europe are still facing fiscal crisis.

“The BPO growth [in the Philippines] is being driven to a great extent of the trouble in US and Europe. Precisely, they are facing weak market,” said Villegas of the University of Asia & the Pacific (UA&P).

Unless these countries can solve their problems, there will be continued increase of BPO investments in the Philippines, and other BPO destinations in the world, he said.

On the other hand, he warned that the Philippines will not settle on its laurels in attracting BPO investments, specifically in voice-related services, while other countries, like China are now doubling their efforts in providing good English learning facilities for its people.

He said while the Philippines excel in English proficiency, this will not sustain the growth of the BPO. The Philippines has to move up, in attracting the Knowledge Process Outsourcing (KPO).

“If we depend on voice we are going to lose that competitive advantage,” he said emphasizing that the Philippines has to focus on KPO in order to strengthen its strength in the outsourcing sector.

He said despite the problems that hit the huge outsourcing sector from time to time, such as closure of some operations, it will never be considered as a threat to the entire sector.

In fact, according to Villegas the BPO sector is the second key seven industries in the Philippines, based on the survey conducted by the Joint Foreign Chambers entitled “Arangkada Philippines 2010: A Business Perspective.

 In a report released by the National Economic and Development Authority (NEDA-7), Cebu’s IT and IT enabled services, including BPO activities, continued to expand in the region at an average of annual rate of 20 percent.

In Cebu, which is the IT/BPO hub of Central Visayas, the number of IT/BPO service providers grew by 2040 percent for the last 11 years, or from four companies in the year 2000 to more than a hundred companies as of 2011.

With the escalation in the number of providers, Tholons has ranked Cebu as the 9th emerged outsourcing destination in the world.

Because of Cebu’s confidence to do more, stakeholders are now working on effective strategies how to increase its rank, going up to the 5th place outsmarting the top five emerged destinations, most of them are cities located in India.

 In 2011, the IT/BPO industry saw the entry of new providers as well as the expansion of the physical and manpower resources of existing providers.

By end of 2011, the total workforce of IT/BPO companies in the region was estimated at more than 65,000.

This number continues to expand as IT/BPO companies account for 40 per cent of positions posted in a jobs listing website in 2011. (FREEMAN)