BPO sector remains RP's reliable, sunshine industry
May 20, 2009 2:40 am
By Mediatrix P. Cristobal
MANILA, May 19 — Jobs in the Business Process Outsourcing (BPO) sector continue to keep local employment afloat, reflecting continuing industry growth as more firms are set to rise in key areas in the country's so-called cyber corridor despite the continuing global economic downturn.
"Growth in the BPO workforce is expected to rise as the global economic crisis forces companies to look for alternative and cost-effective ways to provide high-value services, according to Gigi Virata, Industry group Business Process Association of the Philippines (BPAP) research director.
Touted as the country's sunshine industry, BPO eyes to employ one million workers and generate USD 13 billion in annual revenue by 2010, BPAP report entitled Offshoring and Outsourcing Philippines: Roadmap 2010 said.
Many of the largest multinational participants in the O&O market, such as Accenture, Citibank, Convergys, Dell, and HSBC, are considered 'BPO institutions' in the country and are geared for massive expansion in places such as Cebu and Bacolod, to name a few.
There is an ongoing effort from the Philippine government to change the system to create the right kind of talent for the BPO industry. President Gloria Macapagal-Arroyo allocated P350 million for training development for the BPO industry.
The Arroyo government has programs that support the development of the non-voice BPO industry, providing incentive programs to attract investors as well as providing grants and infrastructure developments.
The country is one of the top destinations globally for offshore and outsource (O&O) operations, starting out with USD 100 million in total revenues in 2001.
Between 2004 and 2006, the industry grew 49 percent per year. As a result of this growth, the Philippines is now the Southeast Asia market leader and, along with India and China, one of the top countries providing O&O services globally.
Also, the USD 6.8-billion Philippines offshore market today employs over 450,000 people, mostly for voice-based services.
The Everest study, The Silent Knight: The Philippines Emerging Non-Voice BPO Capability, which includes contributions from the BPAP, shows that the Philippines is now poised to emerge as an important destination for non-voice offshore BPO work for buyers looking beyond India to grow their offshoring footprint.
The study said that by 2012, the offshore BPO market will have an addressable opportunity of USD 220-280 billion, and as much as 90 percent of this addressable market opportunity will be in non-voice BPO services.
"The talent of the people, education, fluency in English, work ethic, young and dynamic workforce, I could go on and on. (The Philippines) is a very special place," Fred Gordon, Vice President for Content Operations of Thomson Reuters Legal, earlier said.
"The Philippines became attractive to major players because of our English-speaking capability, our affinity to the US, and similarities in terms of jurisprudence and general acceptable accounting practices," says Business Processing Association of Philippines (BPAP) industry affairs director Jonathan de Luzuriaga.
Though lacking in scale of expansion and the technical talent pool which India offers, the Philippines emerges as biggest threat to India because of its infrastructural advantage.
In the Philippines, all call centers are inside the cities, unlike in India where most of them are located on the outskirts. The public transportation system is well connected and efficient.
The BPAP said that, aside from Manila, there are many other attractive locations for BPO in the Philippines. Cities such as Angeles and Cebu are already employing thousands of O&O workers.
There are at least 13 additional locations that can support operations of more than 5,000 employees and five cities that could function as hubs at three to ten times that level of employment. Developing these alternative locations will be the second major theme of our efforts.
Latest report say that the Philippine BPO industry generated USD 6.1 billion of revenue and employed 372,000 workers at year-end in 2008.
The Philippines O&O industry is at a crossroads. It sits at a moment in time when deliberate action can have profound, far-reaching benefits for the industry and the nation. Global jobs are coming to the Philippines, and the Philippines can benefit greatly from these jobs. And it is up to us the local industry, the local stakeholders, the local workforce, and BPAP to take the necessary actions to capture this unique growth opportunity, the BPAP said. (PNA)