The BPO backlash

Last week, this column argued that many Philippine commentators on economic affairs fail to think “outside the box.” Due to ideological commitment, some voluntarily submit to the narrow horizons of the current, dysfunctional “export-oriented” economic model, imposed by the World Bank and International Monetary Fund decades ago. Others have simply abandoned hope that the Philippines will embark upon the path of genuine development.

Take, for example, the concern regarding the Call Center Worker and Consumer Protection Bill currently before the US Congress.

In 2011, business process outsourcing (BPO) revenue in the Philippines was $9 billion, no less than 4.5 percent of gross domestic product. Some 900 BPO firms employ 1.1 million Filipinos, around 60 percent of whom are call center agents. This country, being the world’s third largest provider, has 15 percent of the market share.

Let me state at the outset that I have absolutely nothing against individuals who have taken jobs at call centers, performing functions outsourced by a foreign company. In an underdeveloped economy, people have to take every possible legal opportunity to put food on the table, and call center jobs pay better than most.

But let’s be honest about this. How did those jobs get here? A company in, say, the USA or the UK has thrown its domestic call-center staff out of employment and exported the jobs to the Philippines, where they will be performed at a fraction of the cost. “It’s a no brainer, really,” wrote Louie Logarta in this paper on Jan. 15, “with the monthly salary of an entry-level call center agent here in the Philippines ranging from P15,000 to P20,000 as compared to the P55,000” in the USA. It is nothing less than astonishing, though, that some Filipino commentators and politicians seem to have been under the impression that this process would continue indefinitely with no backlash from those adversely affected.

Well, there is a backlash. Louie says somewhat dismissively that outsourcing “angered many Yanks who blamed it for the loss of job opportunities…” What did he expect? The US Bill will, if passed, deny government loans and concessions to companies offshoring their call centers, fining them $10,000 a day if they fail to notify the Department of Labor of their action within 60 days; in addition, call center agents will be required to notify their location to all callers, who will then have the option of switching to a US-based agent.

To begin with, Philippine officialdom seemed taken by surprise. Bangko Sentral deputy governor Diwa Gunigundo predicted no adverse effects on this country. His explanation for the Philippines’ success in this sector is, however, worth hearing: “Filipinos don’t charge much and they are not argumentative.” So much for national pride. According to a DoLE spokesman, the sector would continue to grow, despite the Bill, because other markets had been found. President Aquino reckoned it was all a bluff, this being a US election year. “Well,” he adds, “hopefully it will not change because it is one of our sunrise industries.”

A less sanguine view was taken by Eastern Samar Rep. Ben Evardone, who urged the government to send a high-powered delegation to dissuade the US Congress from passing the Bill. Is it possible to conceive of a more unseemly or unpopular mission? How would you persuade a US congressman to place no constraints on companies throwing Americans out of work so that their jobs could be outsourced to the Philippines? Rep. Evardone argues that BPO income is essential in minimizing the effects of the US and EU economic crisis. In fact, by reducing demand in those economies outsourcing has contributed to that crisis.

Louie Logarta takes the view that the Bill is being pushed by a “bi-partisan group of congressmen who wish to curry favor with voters…” But aren’t politicians supposed to comply with the wishes of their constituents? Obama has vowed to do “whatever it takes to move this economy forward and to make sure that middle-class families regain the security they’ve lost over the past decade.” If Obama is sincere (and his track record is not spotless in this regard), how can this been the object of criticism? Well, because Filipinos will be affected, of course. It’s another manifestation of the syndrome which produces “No Pinoys Hurt” headlines whenever there’s a disaster elsewhere in the world.

The Bill is a “done deal,” Louie says. “Pinoys must get it through their thick skulls that these ‘ugly Americans’ will stop at nothing to advance their selfish interests, even if it means trampling on all those who have the misfortune of standing in their way.” He concludes, “It can be read this way: To hell with the Philippines.”

There, unfortunately, is an illustration of how the perception of reality (to say nothing of generosity of spirit) is cruelly distorted by a passive acceptance of underdevelopment.

Who has been trampled? The workers discarded in recent decades so their bosses could make fatter profits by employing those who “don’t charge much.” Those bosses and the politicians acting for them are the “ugly Americans” with “selfish interests,” Louie, not the workers who are defending their jobs. Those transnational corporate interests and the multilateral agencies which represent them have been responsible for reducing the Philippine economy to its current sad state, thus guaranteeing a constant supply of workers who “don’t charge much.” The fact that the BPO sector and OFW remittances contribute some 15 percent of GDP is a sign of weakness and failure, not strength.

If the current Bill causes Filipino workers to lose jobs, they will have been betrayed — not by US workers or (on this rare occasion) US politicians, but by those in the Philippines who have for decades failed to stand up to foreign capital and build an economy (or even campaign for one) that provides not just jobs but national pride as well. –Ken Fuller, Daily Tribune

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