Trump policies won’t stop US BPOs in Philippines

CEBU, Philippines - US Ambassador to the Philippines Sung Y. Kim yesterday shrugged off fears of the possible impact of the Trump administration on the Philippine business process outsourcing (BPO) sector, expressing belief that US BPO companies "will continue to do very well" in the country.

Speaking at the general membership meeting of the American Chamber of Commerce of the Philippines-Cebu Chapter on Thursday, it's too early to make a conclusion on the effect the Trump administration in the US may bring to the Philippines BPO sector.

He underscored some economic policies of the US government have not been implemented yet.

Kim emphasized that one of the significant factors why US BPO companies have enjoyed their operations in the Philippines is the country’s young, competent and smart population. 

"And there is also a very strong cultural affinity [between the two countries]," the US envoy told the Cebu business community during the event held at the Cebu City Marriott Hotel.

Kim said the automation is much more of a threat to the local BPO sector than the perceived impact of policies that may be made by the US government as far as the industry is concerned. 

The IT-BPO sector plays an important role in boosting the country's competitive advantage as the key destination for voice and non-voice services.

The sector has been growing at more than twice the global market growth rate over the past five years.

The IT-BPO sector is the Philippines' second largest source of dollar earnings after remittances or the money earned by Filipinos working overseas.

The industry has grown to be the second largest source of dollar income for the Philippine economy, according to the Information Technology and Business Process Association of the Philippines (IBPAP).

In 2015, the industry generated 1.2 million direct jobs and US$ 22 billion in revenues.

In its six-year roadmap released last year, the IBPAP expects the industry to grow in the next six years, earning as much as $38.9 billion in revenue by 2022 as it expands its reach in the global market.

Although IBPAP said that the Information Technology and Business Process Management (IT-BPM) industry would grow much slower compared to the last six years, with the local compound annual growth rate (CAGR) seen at 9.2 percent from 17 percent previously.

Voice revenue is projected at up to $22.2 billion, or more than half of the entire market in 2022. This revenue will be generated by contact centers, business process and outsourcing, global in-house centers (GIC), and health care.

The services portfolio of the industry will also be diversified with the share of non-voice services seen at 42 percent of total services in 2022 from 34 percent in 2016. (FREEMAN)