BPO sector earns $3.36B in ’06

Business process outsourcing (BPO) operations such as call centers have generated as much as $3.36 billion this year, the National Economic and Development Authority (NEDA) said.

Even this estimate is subject to intense debate but economic officials agree that the impact of the industry is being grossly underestimated in the national income accounts.

Earlier estimates put the revenues of BPO centers at around $1.7 billion a year but officials said subsequent projections pointed t a much larger number.

NEDA chief Romulo Neri said that based on a “very rough” count of seats in existing BPO companies, the estimated revenues being generated  could account for as much as three percent of gross domestic product (GDP).

“Add to that fact that this industry is gorowing at a phenomenal rate of about 30 to 40 percent,” Neri said.

According to Neri, however, the government was slow in capturing the actual contribution of the BPO industry.

The Bangko Sentral ng Pilipinas (BSP) earlier this year launched benchmarking survey of all the registered BPO operators in the country.

The BSP survey is expected to be completed before the end of the year and it would give economic officials their first empirical glimps into the industry that has also spurred a pick-up in real real estate development in urban centers.

According to the National Statistics Coordination Board (NSCB), on the other hand, there was also a need for the government to regularly  survey the BPO industry to factor in its actual participation in the economy.

NSCB Secretary General Romulo Virola said a permanent inter-agency committee on information, communications and technology has been formed and the body would draw the policy and mechanics of account for BPO operations.

“Surveying BPOs has been difficult because these are young companies that are not accustomed to being surveyed,” he said. “A lot of them had no desire to cooperate, fearing competition, maybe even tax-related problems.”

The BSP earlier said the country’s balance of payments (BOP) position and even the GDP was being understated because of the increasingly significant dollar earnings of business process outsourcing (BPO) centers.

BSP Deputy Governor Diwa Guinigundo said BPOs could be contributing enough dollar inflows that their full impact on the country’s dollar reserves and overall BOP position could be understated.

“We just need to know exactly what we are dealing with,” Guinigundo said. “Right now we don’t even know how much of their dollar incomes are being captured by the banking system so that they would be reported to us.”

Published at the STAR, p B2, December 4, 2006