RP, Indian BPOs tie up vs. protectionism

THE Philippines and India may be rivals in attracting business process outsourcing (BPO) investments this side of the globe, but the two countries are joining forces to shield the sector from looming protectionism, an official said.

On the sidelines of the inauguration of ExcelAsia Training and Development Inc.’s newest site in Eastwood, Quezon City on Tuesday, Jonathan de Luzuriaga, Business Processing Association of the Philippines (BPAP) executive director for industry affairs, told reporters that BPAP and India’s National Association of Software and Services Companies (NASSCOM) next week will sign a memorandum of agreement, through which they will lay out plans to jointly lobby in the US and other BPO markets to combat possible actions of governments against outsourcing and offshoring activities.

According to its website, NASSCOM is the “premiere trade body and chamber of commerce of the information technology and BPO industries in India.” This industry group counts about 1,200 member-companies.

While BPOs have yet to eel the threat of protectionism, the two countries—also among the top global BPO destinations—need to forge a partnership to watch over their business, de Luzuriaga said.

US President Barack Obama in May announced that Washington will squeeze offshore havens and American firms’ ability to profit from outsourcing jobs in a bid to save about $210 billion.

But de Luzuriaga said a growing number of US companies are considering outsourcing to save up and make their operations more efficient. “If you ask CFOs [chief financial officers] these days, outsourcing is on the top of their minds. More companies would prefer to outsource, even if they might lose incentives when they do outsourcing. They will still save up more when they outsource,” he said.

“It’s just a matter of educating geographies that outsourcing and offshoring is a reality now, and it’s a global trend,” he added.

Last week, Trade Secretary Peter Favila major BPO companies in the US told members of President Arroyo’s delegation that they are endorsing the former colony to new players who are looking for locations.

“Actually, American companies do outsourcing quietly because the recession has made the US government keep an eye on outsourcing. Firms said outsourcing is really a business decision that has to be made for them to survive the crisis. We just told them, ‘the Philippines is a market where you are all welcome,’” Favila said.

The trade secretary said the so-called Next Wave Cities have been creating buzz among interested US companies. “We expect another wave of players in these new wave cities,” he said.

BPAP, the Board of Investments and the Commission on Information and Communications Technology recently identified the country’s 10 up-and-coming BPO hubs: Bacolod City, Cagayan de Oro City, Davao City, Iloilo City, Lipa City, Metro Cavite, Metro Laguna, Metro Pampanga, Bulacan East and Bulacan West.

These new wave cities are deemed the “best locations to set up and or expand BPO operations outside Manila and Cebu,” and were chosen based on the availability of infrastructure, costs and risks of doing business there, and current size and projected growth of talent pool.  –Ben Arnold O. De Vera, Reporter, Manila Times