PHL sta­tus as BPO hub still strong de­spite slow­down — ING

Business World - - THE ECONOMY - By Melissa Luz T. Lopez Se­nior Re­porter

THE PHILIP­PINES will re­main a vi­able lo­ca­tion for the out­sourc­ing in­dus­try de­spite slower growth in rev­enues ex­pected over the com­ing years, a global bank said, with its “adapt­able” la­bor force con­tin­u­ing to at­tract for­eign com­pa­nies.

ING Busi­ness Shared Ser­vices, the ser­vices hub of ING Bank, said the Philip­pines will likely re­main a mar­ket of choice among for­eign firms for busi­ness process out­sourc­ing (BPO), even as rev­enue growth for the sec­tor cools.

The global bank said that rev­enue growth from the BPO in­dus­try could fall be­low 10% this year, and will likely “slow fur­ther” in the years ahead as in­vest­ment pledges de­clined by 22% from the same pe­riod in 2016.

ING Bank se­nior econ­o­mist Jose Mario I. Cuyegkeng said in­creased com­pe­ti­tion from other Asian economies, along­side on-shoring ini­tia­tives by US com­pa­nies, could be af­fect­ing BPO in­vest­ment. Se­cu­rity con­cerns and un­cer­tainty in terms of fis­cal in­cen­tives are like­wise de­press­ing in­vestor ap­petites.

Still, the global bank said the Philip­pines re­mains an ideal site for “cap­tive off­shoring,” where for­eign firms set up a sub­sidiary here and em­ploy Filipinos to pro­vide ser­vices.

“The trend for cap­tive shared ser­vices cen­ters is to move more knowl­edge and skill­based op­er­a­tions to coun­tries where la­bor is not only avail­able, but also adapt­able. So the Philip­pines con­tin­ues to be a good lo­ca­tion for many global com­pa­nies,” Hans B. Si­cat, in­com­ing coun­try man­ager for ING Bank, was quoted as say­ing in a state­ment.

Mr. Si­cat as­sumes the top post next month as in­cum­bent coun­try head Con­suelo D. Gar­cia re­tires.

BPO re­ceipts to­taled $11 bil­lion dur­ing the first half, which helped off­set the im­pact of greater cap­i­tal goods im­ports and kept the coun­try’s cur­rent ac­count at a nar­row deficit.

BPO rev­enue and re­mit­tances from over­seas Filipino work­ers are con­sid­ered struc­tural in­flows and help sup­port do­mes­tic con­sump­tion — a key growth driver for the Philip­pine econ­omy.

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