MANILA, 19 SEPTEMBER 2008 - America's financial meltdown could be the Philippines' boom time, particularly for the business process outsourcing industry (BPO). As the world's central banks and financial institutions are still assessing the impact of what analysts have called as the 'Monday Meltdown' when big US investment banks Lehman Brothers filed for bankruptcy and Merrill Lynch was taken over by Bank of America, the Philippine BPO sector is looking at opportunities to offer cost-effective solutions to foreign firms.
The US is the biggest market of the Philippines for BPO services, accounting for up to 90 percent of the industry's client base.
"The trend is working to our advantage," Business Processing Association of the Philippines (BPA/P) chief executive Oscar Sañez said Thursday at the group's quarterly CEO forum. He said the Philippine BPO sector can offer a "timely solution" as US companies seek for more cost-effective ways to do business. Sañez said the key is for Philippine BPO players to ride on these opportunities by expanding capacity and beefing up their workforce.
While industry players recognize that there may be some slack in sales cycle and decision-making of US clients on outsourcing contracts to the Philippines, they believe the impact will not be for the long-term
Rainerio M. Borja, president of one of the largest BPO operations in the country PeopleSupport, said US financial companies cannot afford to continue cutting down on their operations and manpower to sustain their businesses. "Somebody has to pick up on the slack...so we still see opportunities coming our way," he said.
More and more companies are looking at offshore alternatives to achieve cost efficiencies and focus on core competencies, added ICT Group president Karen Batungbacal. She said it helps most of the outsource services that Philippine BPO centers provide to foreign financial institutions are considered "core" to their operations and therefore essential to sustain their viability.
International banks that are outsourcing some of their operations in the Philippines include Citibank, HSBC, Deutsche Bank, among others.
Together with India and China, the Philippines has established itself over the past few years as a suitable location for offshoring and outsourcing services. According to industry figures, total O&O revenues in the country grew from USD 1.5 billion in 2004 to USD 4.9 billion in 2007, with direct employment of almost 300,000 employees. The BPAP has targeted to capture 10 percent of the global market share by 2010 with USD 13 billion revenues and raise employment to almost a million.
