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BPO firms threaten to pull out of Manila

By Othel V. Campos | Posted on May. 21, 2013 at 12:01am
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A group of business process outsourcing companies warned Monday some of their members will pull out of Manila if the peso continues to appreciate against the dollar.
The Information Technology and Business Process Association of the Philippines said most members were trying to reduce cost either by postponing expansion or relocating to more cost-friendly sites.
“With the peso pegged at 41 to a dollar, the situation is still tolerable for BPM [business process management] companies, but if the rate further increases the value of peso, many will be forced to go somewhere else where cost will be more or less manageable,” IBPAP deputy executive director Gillian Joyce Virata said during the launch of the Philippine Information Technology and Business Process Management Road Map 2012-2016.
Virata said despite threats of relocation, the industry would still push for the adoption of the industry roadmap, given the Philippines’ status as the world’s leading site for voice services and the second world’s biggest industry for non-voice services.
The revised roadmap expects the industry to account for about 8 percent of the gross domestic product by 2016, with revenues of $25 billion and employment of 1.3 million.
Moreover, the return-on-investment will be 4 to 5 times higher for every peso of foregone taxes from the incentives from 2005 to 2011.
Market intelligence research firm the Everest Group said the Philippines was a mature location for offshore information technology-business process management services.

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