As 'few' firms seek cash aid, BPOs still seen as 'one of big winners' of pandemic

Prinz Magtulis - Philstar.com
As 'few' firms seek cash aid, BPOs still seen as 'one of big winners' of pandemic

MANILA, Philippines — The business process outsourcing (BPO) sector may end up as one of the “big winners” of the coronavirus outbreak as the industry’s technology-driven nature helps companies evade movement restrictions, keeping one of the country’s dollar sources intact.

“BPO remittances may not suffer as surmised, since the sector was exempted from the lockdown,” Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno said in a text message on Thursday.

“BPO might be one of the big winners in this pandemic,” he added.

Diokno said work-from-home arrangements during the Luzon lockdown have “given rise to higher electronic and technological transactions” which BPOs are highly adopted to, helping keep their 1.29-million-strong workforce busy. 

On the flip side however, there are also concerns that the movement restrictions have prompted BPO firms to accelerate their shift to artificial intelligence, laying off workers. Although Rey Untal, president of the IT-Business Process Association of the Philippines, said it is “premature” to conclude this is happening.

Labor Assistant Secretary Dominique Rubia-Tutay said the department has recorded “a few” BPO firms that applied for government cash aid for their workers displaced by the pandemic. “Though I’m not sure if they were accommodated,” she said in a text message. The cash assistance is worth P5,000 each worker.

The government has allowed BPO workers to go past checkpoints to their offices during the community quarantine that started March 17, provided transportation is provided by their companies. In some cases, firms also provided free lodging to workers. 

Come May 16 when the community quarantine in Metro Manila, Cebu and Davao, prime locations for BPOs, are expected to be lifted, Untal said a skeletal workforce will remain in most BPO offices, while manpower testing for coronavirus is also likely to be conducted.

Social distancing practices will continue to be observed through more shifting, while the use of online tools to communicate will persist. Against this backdrop, Untal said it is “premature” to conclude that artificial intelligence will begin to replace some BPO workers as long feared.

“When the time comes that another set of exit criterion is met, leading to the lifting of the public health emergency that we are currently on, then we can gradually proceed to what people are calling the new normal,” Untal said in a statement.

‘All-time high’ reserves

According to IBPAP data, BPOs likely generated $26 billion in revenues last year, and is poised to increase that to $27 billion this year before the pandemic shut down businesses and closed entire cities. Full-time employment was seen to increase to 1.33 million in 2020.

The dollars generated from BPO firms help increase the Philippines’ gross international reserves to a new all-time high of $89 billion as of end-February, central bank data showed.

At its year-to-date level, reserves are sufficient to fund 7.9 months’ worth of imports, falling above the global recommendation of at least 6 months. Diokno sees reserves rising to $93 billion by year-end.

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