Bishop bill not a threat to RP outsourcing industry

American politicians are playing up a US anti-outsourcing bill because it offers them a good sound bite ahead of the November presidential and congressional elections there, a senior member of the House of Representatives said yesterday.

“We expect the anti-outsourcing rhetoric in Washington to build up in the months ahead, simply because American politicians courting votes will want to make it appear they are protecting badly-needed US jobs from going overseas,” said House Deputy Majority Leader and Pasig City Rep. Roman Romulo.

“However, we don’t consider the Bishop bill a real threat to the booming outsourcing industry of the Philippines. It is just a pre-election political gambit. We seriously doubt the bill will see the light of day,” Romulo said.

Romulo was referring to New York Rep. Tim Bishop’s proposed US Call Center and Consumer Protection Act, which would require the US Department of Labor to track firms that shift contact center jobs overseas.

The firms would then be ineligible for any direct or indirect US federal loans or loan guarantees for five years.

The bill would also require contact center staff to disclose their location to US consumers, who would be given the right to be routed to a US-based call hub upon request.

Romulo is a key backer of the Philippine business process outsourcing (BPO) industry, which is projected to directly employ up to 1.3 million Filipinos and produce some $25 billion in annual revenues by 2016.

“American companies are actually gaining in a big way from their ability to outsource non-core operations, mainly customer support activities, to inexpensive locations such as the Philippines,” Romulo pointed out.

“To begin with, the BPO service providers here in the Philippines are predominantly American firms that remit profits to mother units in the US,” he said.

The US-based BPO providers with large Philippine operations include Cincinnati, Ohio-based Convergys Corp.; Englewood, Colorado-based TeleTech Holdings Inc.; Tampa, Florida-based Sykes Enterprises Inc.; Armonk, New York-based IBM Corp.’s Global Business Services; Nashville, Tennessee-based Sitel Worldwide Corp.; Denver, Colorado-based StarTek Inc.; Horsham, Pennsylvania-based NCO Group Inc.; Rochester, New York-based Sutherland Global Services Inc.; Bannockburn, Illinois-based APAC Customer Services Inc.; and Fremont, California-based Synnex Corp., among others.

These BPO firms in turn provide services to mostly US-based clients, many of which belong to the Fortune 500 largest American corporations.

“Outsourcing to the Philippines has enabled many Fortune 500 American corporations to reduce cost and keep more jobs in America,” Romulo said.

“If not for the cost-savings from outsourcing, distressed American banks, insurers, and other financial firms would likely have thrown more Americans out of their jobs at the height of the global financial crisis,” he added.

Romulo is author of the proposed Act Protecting the Privacy of Personal Data in Information Systems, which is expected to further encourage outsourcing to the Philippines. The House of Representatives has already passed the bill on final reading.