Vol. XXI, No. 199 [ Business World Online ]
Monday, May 12, 2008 | MANILA, PHILIPPINES
THE PHILIPPINES is targeting to double its share in the Australian business process outsourcing (BPO) market by yearend as it moves to tap markets outside the United States.
Business Processing Association of the Philippines (BPAP) Chief Executive Officer Oscar R. Sañez said the local sector is eyeing to increase to 6% from the current 3% its hold in the Australian market, which industry experts expect to reach close to $4 billion by 2010.
"Australia is like a frontier to us. Out of what can potentially be outsourced in Australia, only less than 12% have been outsourced. A big chunk of that is India with 7% or 8%, while we have about 3%. We have very little share, but the potential to increase that is huge," he told reporters.
BPAP last week led a delegation of 20 BPO companies representing voice, back-office, information technology, telecommunications and systems integration sectors to a business mission in Sydney and Melbourne, to discuss possible investments with Australia’s top industry players.
Mr. Sañez said Australian companies are considering the Philippines as an investment site, citing concerns on sustainable labor supply and high labor costs in their home country.
"It’s timely to penetrate Australia now because it’s facing skill shortage, particularly in IT. Their currency is very strong; that’s why it’s not proving to be competitive if they want to host more outsourcing for other US companies. It’s better to outsource themselves to other countries like Philippines and India," the BPAP official said.
The average labor cost for call center agents in Australia is $33,000 a year, compared with $24,000 in the US and $4,000-$5,000 in the Philippines.
He also said the local delegation spoke to 35 companies, five of which committed to visit the Philippines next month to look at possible sites and consider putting up businesses here. "I cannot say which companies, but they are medium-sized — mostly in back-office, finance and IT. There a couple of call center and back-office operators which already have some presence here that are expanding — Stellar [Global Solutions Philippines] and Admerex [Solutions Inc.]," he said.
Industry analyst International Data Corp. (IDC) earlier said the entire Australian BPO market would increase in value to $3.84 billion by 2010, up from $2.39 billion in 2006. Finance and administration and human resource services will continue to account for the bulk of the BPO market, IDC said. — Bernardette S. Sto. Domingo
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