Vol. XXI, No. 186 [ Business World Online ]
Wednesday, April 23, 2008 | MANILA, PHILIPPINES
THE COUNTRY’S outsourcing industry believes it will earn 42.8% more this year at $7 billion from $4.9 billion last year, even amid a "strong" peso, as US firms outsource services in order to cut costs.
Commenting on experts’ presentations in a forum yesterday, entitled, "Peso Strength and US Economic Woes: What do they mean for the country’s outsourcing industry?" Oscar R. Sañez, chief executive officer of the 220-member Business Processing Association of the Philippines (BPA/P), said the industry remains "on track in achieving our targets."
"There is no cause for concern because the quality [of service] is increasing and this should offset the higher costs in doing business," he said in an interview.
Mr. Sañez added that the local business process outsourcing (BPO) sector expects to add about 200,000 more employees this year to its current 320,000 work force.
BPA/P launched its Roadmap 2010 in November last year that aims to corner 10% of the $130-billion global BPO market by that year, contributing about 8% to the country’s gross domestic product (GDP).
The peso strengthened by nearly 18% last year, rising to P41.33 to the dollar by yearend. This year, private sector analysts said it could strengthen to as high as P37-P38.
Lazaro Bernardo Tiu and Associates President Romeo L. Bernardo, a former Finance undersecretary, had cautioned in his presentation that "The [US] recession creates opportunities for BPO companies here, but it doesn’t come immediately. They (BPO firms) have to further improve the rate of service."
University of the Philippines economist Raul V. Fabella, a member of BusinessWorld’s corporate and editorial boards, warned in a separate presentation that a continued peso appreciation could derail the industry’s goals. "Given the strengthening of the peso, the 8% of GDP [target] is far away," he said.
On top of the appreciating peso, Mr. Fabella also noted the continuing high cost of doing business, particularly in terms of the price of electricity, which is the second highest in Asia. — M. G. S. Ramos
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