Mass deportations bad for Philippine BPOs

BY CRISPIN R. ARANDA, Manila Times, Feb 27, 2017

THE business process outsourcing industry is a multi-billion dollar industry. Call center agents speak fluent, neutral-accented English. BPO employees are paid less than their US counterparts. Dollar earnings rival that of remittances. Citizens of this country top the list of source countries for immigrants and visitors.

No, we are not referring to the Philippines but Mexico.

Of the 1.4 million people returning to Mexico for the five-year period (2005 to 2010), a critical sector is that of those who were deported: teens and working- age youths and workers who have lived most of their lives in the United States, have a good command of the English language, know America by the palm of their hands and maintain family, community and personal ties through social media and web-based calls through Viber, Skype, WhatsApp and FaceTime.

Contrary to the claim of the current Trump administration that Mexicans continue to cross the border to the US, a report by the Pew Hispanic Center shows that return-to-Mexico migration has increased, not the other way around.

While 670,000 Mexicans and their families left the US and returned home from 1995 to 2000, more than 1.4 million moved back to Mexico from 2005 to 2010, partly because of the improved economic situation and decreasing opportunities to move up the employment ladder in the US.

Ironically, it was the increased deportations in the Obama administration that fueled the call-center industry in Mexico. BPO employees, especially recent deportees are better able to relate to their US customers since they have lived a significant period of their lives north of the border despite the existing wall–or fence.

Major companies such as Time Warner, Dish Satellite and Best Buy pay their call center agents about $4 per hour, or 79.32 Mexican pesos or 200.27 Philippine pesos.

In July 2013, recognizing the crucial role that telecommunications infrastructure plays in making Mexico globally competitive in the BPO industry, Mexico’s President Enrique Pena Nieto unveiled the “Transport and Communications Infrastructure Investment Program (TCIIP) 2013-2018” with the goal of increasing investments in the nation’s telecom infrastructure to 4 trillion Mexican pesos (US$315 billion). TCIIP aims to:

1) Expand the network coverage and capacity, to increase broadband services access at public and community sites;

2) Encourage competition, reduce cost and improve access to telecommunications services; and

3) Contribute to the constitutional reform of telecommunications

The Philippine government meanwhile is merely a reactive regulator acting as a referee between the two telecom giants (Globe and Smart/PLDT). The country does not even have a national broadband (a previous proposal, NBN-ZTE, was exposed for alleged corruption resulting in the indictment of top government officials. To date, the talks about setting up a digital or telecom infrastructure by the government remains that – talk.

In the meantime, the Philippines remains at the bottom of the list of countries in Asia with the slowest internet speed, unless you can afford the premium package of services which BPOs can afford. Meanwhile, the competitive advantages of the Philippines as a destination for BPO foreign investors are slowly diminishing because of local and international developments.

The political uncertainty signaled by the fiery and confusing rhetoric of President Duterte against the United States, the United Nations and Europe are causing investors to shy away.

The European Chamber of Commerce of the Philippines (ECCP), through its executive director Florian Gottein, said two potential investors in the manufacturing and information technology sectors have canceled expansion plans in the country, jeopardizing the creation of 4,000 to 5,000 more jobs for Filipinos.

EU investors are diverting investments to other countries in the region, especially Vietnam, Gottein claimed.

Now, with the executive orders issued by President Donald Trump to rid the US of “bad hombres”—criminals, drug addicts and rapists—Mexico eagerly awaits the US-bred talents that could further boost Mexico’s BPO competitiveness. Mexico’s gain will be the Philippines’ loss.

Deportation of Mexicans—a significant number of which are 20 to 35 year old—could accelerate the growth of Mexico-based call centers serving the US and other foreign markets.

According to the Yearly Statistics of the US Citizenship and Immigration services, Mexico has the most number of nationals apprehended and deported from 2013 to 2015.

A research conducted by Jordy Michell Thirion, an economics professor at the Metropolitan Autonomous University in Azcapotalco, Mexico, shows that the BPO industry south of the U.S. border grew 116 percent, from 8,632 to 18,701 locations, from 2007 to 2010.

The report estimates that more than 60 percent of the employees at some of the major Mexico City call centers are deportees, a “huge pool of talent for us,” Joe Andere, executive vice president of Americas Survey Company (ASC) said. The report from UK Guardian states further that ASC’s sister company, Voxcentrix, has 450 call center stations in Tijuana.

It could very well be that Mexico will construct its own Statue of Liberty counterpart with the etching at the foot of the statue saying ‘Give me your teeming masses of deportees, yearning to be free from deportation threats.”

And for the strengthening of the competition, the Philippines has Trump to thank for.

Should we expect a Hispanic version of President Duterte’s favorite swear words: Hijo de p–a?