US-based companies top list of BPO investors in RP

US-based companies are emerging as the biggest investors in the country’s business process outsourcing (BPO) industry but the government is still unable to establish baseline information about the industry.

The Bangko Sentral ng Pilipinas (BSP) is having difficulties getting the cooperation of major industry players, forcing a two-month delay in the benchmarking survey that should have completed last year.

The BSP launched the year-long survey last year to assess the BPO industry and determine its actual impact on the economy, particularly the country’s external position. The survey is the first of its kind to be conducted on the BPO industry and was intended to establish the baseline information that would be the basis of future economic statistics.

However, BSP officials said the survey results so far gathered were not reflective of the actual extent, expansion and impact of the industry because major BPO companies had been reluctant to participate.

According to a top BSP official, the Monetary Board was appraised of the preliminary results of the survey but the turn-out had been disappointing and the results inconclusive.

The source said the BSP had decided to delay the release of the survey results until it could compel the major BPO companies to participate in the survey since their information could very well change the benchmark data that the BSP was trying to establish.

"The Monetary Bank gave them another couple of months to complete the survey, it’s something the Board considers critical because we have no idea exactly how much impact BPOs have until we are able to establish some basic information," the source said. "At this point, we have conjectures that need to be empirically proven or otherwise."

The BSP, however, declined to name which of the "major BPO" operators were refusing the participate in the survey and disclose information about their operations.

The source said the BSP had the option of resorting to third-party information but first-hand information given by the BPOs themselves were preferable to any other official data that could be gathered

The outcome of the BPO survey was declared incomplete but initially, the source said the result indicated that US-based companies are still the biggest source of foreign direct investments into BPOs.

The preliminary result showed that 63 percent of foreign investments into BPO came from the US. Europe was a distant second with 26.8 percent followed by Japan which accounted for 1.4 percent and "other Asia" accounted for 8.4 percent.

The "other Asia" category included investments from India, Malaysia and Singapore.

Initially, the survey also indicated that the biggest expansion was seen in medical transcription which account for only a small percentage of BPOs in the country but has been expanding at a phenomenal rate of 85 percent.

The survey also revealed that although India was the country’s biggest competitor in the BPO business, there were Indian companies that invest in BPOs in the Philippines as well.

The BSP source said that once the survey is completed with the participation of the major players, government would have a better idea of the size, scope and impact of the BPO industry on the economy as well as validate once and for all the loose information that have not been previously validated.