Local developers express mixed views on Trump

CEBU, Philippines - A local property developer is on a wait-and-see mode in its plan to build business process outsourcing (BPO) office buildings in Cebu amid uncertainty whether US President Donald Trump's protectionist stand could affect outsourcing investments here.

Grand Land Inc. President Ryan Bernard Go said the company is still trying to assess how Trump's presidency would actually affect BPO investments in the Philippines.

Initially, Go told The FREEMAN in a recent interview that the company was supposedly eyeing two mixed-use office building projects in Cebu, one to be built in Cebu Business Park. But he said they may wait for further developments for now until policies of Trump are clear as far their effect on Philippine BPO industry is concerned.

On the other hand, Ayala Land Inc. President Bernard Vincent Dy said he continues to be bullish on the prospects of BPO industry in the country.

"We continue to get a lot of interest," Dy said.

In fact, he said they expected their office buildings in Cebu to be filled up before the end of 2016.

"As far as BPOs are concerned, we continue to build office space," Dy noted in an interview.

The executive underscored the comparative advantages of the Philippines in outsourcing industry which are "quite significant".

He cited the country's educated labor force and its ability to scale up.

"And there are very few countries that are scaleable and Philippines is probably one of the handful countries that are able to scale up to be able to address or provide the necessary manpower for BPOs," he said.

He further cited the country's cost advantage as another major factor for the Philippines being attractive to BPO investors.

 Since Trump was elected as president in the United States, there have been fears the Philippine BPO sector will eventually be affected.

Trump plans to bring jobs back to the US and curb immigration which is also seen affecting the country's remittances from Filipinos living and working there, according to Moody’s Investors Service.

In its recent report titled “Americas and Asia Pacific: Shift in US Policies Could Dampen Trade and Investment, Weaken Growth,” Moody’s Investors Service noted that “while the nature of policies under the next US administration is uncertain, President-elect Donald Trump’s campaign proposals indicate that a shift involving lower US imports and foreign direct investment (FDI), and curbs to immigration is possible.”

“While we expect trade agreements that have already been implemented to remain in place, US policies going forward could incentivize onshoring— the repatriation of jobs at overseas-based suppliers back to the US—and a focus on domestic production and sourcing. The countries that are most reliant on exports of high value-added goods and services, which would offer greatest onshoring potential, are more vulnerable to a potential shift in US trade policies,” Moody's said.

The debt watcher particularly cited India and the Philippines that "could also suffer in the event of policies that disincentivized foreign sourcing of business services."

The two Asian countries are the biggest BPO destinations in the world.

According to government data, the US accounts for around a third of annual overseas remittances with more than 3.5 million Filipinos living and working there.

On the other hand, nearly three fourths of BPO earnings come from the US, which also continues to rank among the top five export destinations and import sources.

The Philippines BPO industry currently employs roughly 1.2 million Filipinos.

Cebu, the key BPO hub outside the capital Manila, accounted for around 120,000 of these jobs as of end 2015.

In the Philippines, the BPO sector is among the largest dollar earners, seen to surpass cash remittances from overseas Filipinos in the coming years. (FREEMAN)