Gov't sees 20% BPO growth

MANILA, Philippines - Amid threats of closure from the US government, a key member of President Aquino’s Cabinet said that growth from the business process outsourcing (BPO) industry will have more significant progress this year.

Budget Secretary Florencio Abad predicted that the BPO industry is “expected to proceed on an upward trajectory this year, with a 20-percent growth forecast aided by the administration.”

“Growth in the BPO sector will be underpinned by key partnerships between the government and the BPO sector, particularly in generating a larger pool of qualified manpower for the industry,” he said in a statement.

Two US legislators from the House of Representatives who are allies of President Obama have already filed a bill that would close down all their outsourcing programs. 

Abad said that aside from optimizing economic growth and broadening its revenue goals this year, the government will also “intensify its focus on containing the inflation rate within the 3-5-percent target to further improve business confidence in the country.”

“The administration is determined to push for public expenditure reforms and make the most of promising growth in promising sectors. The government is likewise keen on diversifying domestic and external trade, and we plan to take advantage of burgeoning opportunities in fast-growing economies across Southeast Asia and beyond,” he said.

The Department of Budget and Management also reaffirmed Aquino’s goal of achieving fiscal sustainability, as it has set its sights on a 2.6-percent deficit cap for fiscal year 2012, lower than the target set for the previous fiscal year (2011).

“Last year’s preliminary performance posted better figures than our projected three-percent deficit versus the gross domestic product (GDP). Now that we’re aiming for a 2.6-percent deficit target this year, we have strong reasons to believe that we can reduce the national deficit to two percent of the GDP by 2013,” Abad said.

Initial reports indicate that the deficit in 2011, which was capped at P300 billion, will only be in the vicinity of P192 billion or two percent of GDP, far below the deficit ceiling set for the previous fiscal year.

Meanwhile, the government pegged the revenue target for 2012 at P1.5 trillion (14.2 percent of GDP). Aimed at ramping up public spending and beef up the economy, the year’s disbursement assumption was set at P1.8 trillion (16.9 percent of GDP).

Abad noted that with respect to public consumption, economic growth in 2012-marked by the administration at a 5-6 percent GDP increase – will be driven forward by accelerated disbursements for public infrastructure.

“We’ve made remarkable headway in our expenditure program for 2012. As early as the first week of January, the DBM has already released 71 percent or P150 billion of programmed infrastructure outlays,” Abad stressed.

“The early passage of the budget was key to this, complemented by agency efforts to complete bidding-short of award-for this year’s projects by the end of 2011,” he said.

He added that economic growth for this year will also be influenced by the P85-billion Disbursement Acceleration Plan (DAP) implemented in the fourth quarter of 2011.

The DAP accounted for a dramatic increase in government expenditures during that period, jacking up last year’s spending to P475.2 billion in the fourth quarter alone.

“The DAP’s multiplier effect on the economy will continue to exert itself in the first semester of the current fiscal year. About P66 billion are already supported by cash outlays, although this will certainly not have an impact on the deficit,” Abad said.