Bright prospects for BPO industry

SPYBITS - The Philippine Star

News that the Philippines has edged out India as the call center capital of the world will definitely make the future even brighter for the Business Process Outsourcing (BPO) sector, also dubbed as the “sunshine industry” of the country. Over one million Filipinos are employed by the BPO and related IT sectors, with projections that it can generate up to $55 billion by 2020 or roughly 11 percent of the country’s GDP, according to World Bank estimates.

Industry experts peg industry revenue to reach $25 billion by 2016, almost equal to the expected remittances coming from overseas Filipino workers. The IT and Business Process Association of the Philippines (IBPAP), however, has a more modest projection of $20 billion in revenue for 2016. But more importantly, however, is the estimated 1.5 million new jobs that will be created next year courtesy of the industry. As a matter of fact, the positive growth from the BPO sector was one of the reasons why credit ratings agencies have maintained the stable outlook for the Philippines.

A major reason why the country has emerged at the top of the call center industry, aside from lower labor costs, is the skill of the young workforce. US companies most especially prefer Filipinos because of their familiarity with the language, not to mention that their accent comes close to that of Americans. It also helps that Filipinos are more patient – a trait that comes in very handy in handling inquiries and complaints from angry customers, an industry source said.

BPO companies, however, are concerned that a proposed change in tax holidays will make it difficult to expand in areas outside of Metro Manila and other urban centers. The departments of Finance and Industry recently proposed the removal of income tax holidays of up to eight years from the list of perks in exchange for a 15-percent income tax – which is lower than the regular rate of 30 percent – for 15 years as a form of compromise.

The compromise proposal will discourage foreign companies and could undermine the position of the Philippines as the call center capital of the world, industry players lamented. Even if the government lowers the tax rate to 10 percent, removing the tax holidays might just make foreign companies turn to other countries that are offering bigger and better fiscal incentives, industry sources said.

China cracking down on global gaming 

Chinese President Xi Jinping is cracking the whip on casinos, warning foreign operators that they will see less of Chinese gamblers in their facilities. In fact, the Chinese government is imposing restrictions on advertising that promotes casinos in Macau – the only place where gambling is not considered illegal – resulting in smaller gaming revenues for the first time since 2002 when foreign companies were allowed to do business on the island. According to sources, earnings dropped by as much as 30 percent in December alone, with a significant number of junket operators closing down in 2014 as gamers took longer to pay billions of dollars in loans following a slowdown in China’s economy, plus the government’s crackdown on corruption that has discouraged some big time gamblers.

An official from China’s Ministry of Public Security criticized some (unnamed) foreign countries with casinos for looking at China as an enormous market, even setting up offices in the mainland “to attract and drum up interest from Chinese citizens to go abroad and gamble,” he said, adding that they will crack down on this aspect. In short, the Chinese government is telling operators that the Chinese gambler will not be going abroad – but industry observers say junket operators that have closed shop in Macau are now placing their bets on countries like Vietnam and the Philippines with its new, world class casino and resort projects. In 2013, the super high-end resort and casino Solaire was opened, and just last week, Melco Crown Entertainment inaugurated the $1.3-billion luxury casino and resort “City of Dreams Manila” at the Pagcor Entertainment City complex along Roxas Boulevard.

Blood is thicker than politics

It seems Dick Gordon and Tong Payumo have buried the hatchet as far as their political rivalry is concerned. It can be recalled that both men were engaged in a feud over stewardship of the Subic Bay Metropolitan Authority, and have become bitter enemies since then.

At a Rotary event last Thursday, where Dick Gordon was the featured speaker, Tong publicly thanked and acknowledged the help of the former senator who responded quickly when Payumo needed blood for his daughter who was afflicted with dengue. Apparently, Gordon – who happens to be the Red Cross chair in the Philippines – did not want any public mention of the help he extended. But as Tong noted, life is short and therefore one should move on and leave the baggage of the past, adding that he wishes Dick Gordon the best in his political plans.

As one Ateneo classmate commented, it was good to see two Ateneans finally burying the hatchet the true Ateneo way.

Philconsa celebrates Constitution Day

The Philippine Constitution Association or Philconsa is celebrating Constitution Day today at the historic Manila Hotel with Ombudsman Chit Carpio-Morales as guest speaker. Philconsa president and Leyte Rep. Martin Romualdez said Morales would also be honored with “The Fearless and Peerless Crusader’s Award” for her contribution in the war against graft and corruption. The Ombudsman will discuss her views and insights on how political leaders and the people can help strengthen the role of the Ombudsman in the country’s fight against graft and corruption.


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