BSP: Outsourcing policies of RP banks benefit economy

REGULATORS do not seek to quarrel with labor over the outsourcing policies of some of the banks supervised by the Bangko Sentral ng Pilipinas (BSP).

But BSP Deputy Governor Nestor Espenilla Jr. said the practice has had mostly beneficial impact on the economy as a whole, particularly for the business-process outsourcing, or the BPO sector, whose reported annual revenue of some $7.3 billion last year alone helped fortify the country’s external sector.

“Organized labor looks at the outsourcing of bank labor with disfavor, as avenue for the loss of jobs. But outsourcing has allowed the call-center industry to prosper,” Espenilla told reporters.

According to Espenilla, there is an “international dimension” to the outsourcing policies of some of the operating  banks in the Philippines that is lost in the eyes of organized labor but has clearly benefited the unorganized BPO workers the past 10 years.

The BSP first allowed banks under its supervision to outsource some of their core functions in late 2000 under a circular that permitted banks to engage third-party entities and work on their behalf.

Several other BSP circulars have been issued since then and the grumblings have grown louder each time.

To be sure, Espenilla said, not just any bank may engage the services of third-party outsourcing firms without express approval from the policymaking Monetary Board.

But to say that local labor lost in the bargain is absolutely inaccurate, he emphasized.

“The Philippines gained from the [misfortunes of the] United States, for example, where unemployment has risen,” Espenilla said of some of America’s banks to outsource some of their own core banking functions to Indian and Philippine BPOs to save on costs as its economy tanked during the recent global financial crisis.

Those who hold the country’s outsourcing policy as detrimental to local labor hold “myopic and very narrow views on outsourcing,” he said.  –Jun Vallecera / Reporter, Businessmirror