German firms eye local BPO sector

MANILA, Philippines - German companies are looking at investment opportunities in local electronics and business process outsourcing (BPO) industry.

In a presentation on investment prospects during the economic briefing hosted by the All-Asian Centre for Enterprise Development (Ascend), German-Philippines Chamber of Commerce and Industry (GPCCI) president Reiner Allgeier said the country’s strong macroeconomic fundamentals and commitment to good governance have greatly contributed to renewed investor confidence in the Philippines.

At the same time, he cited the need to lower electricity costs and improve infrastructure.

In his presentation, Allgeier said GPCCI member companies are conducting studies on the growing solar industry in the country.

He also said several German companies have expressed interest to outsource their operations to the Philippines.

 “GPCCI is gearing towards renewable energy activities and is intensively supporting the growing solar industry in the country,” said Allgeier.

Allgeier also said electronics, BPO, tourism, mining and agriculture industries are sectors with great investment potential.

He said new projects in the electronics sector are expected to generate $5 billion this year.

The electronics sector is one of the main drivers of the Philippine economy, accounting for 49.46 percent of the country’s total exports in 2011. The Industry attracted $2.477 billion in fresh investments in 2011, up from $2.27 billion in 2010.

Allgeier said the “favorable” import/export tax incentives and procedures in the country’s 200 special economic zones, adequate supply of skilled labor, and english proficiency of the workforce will contribute to the growth of the sector.

The local BPO industry, at a compound annual growth rate (CAGR) of 20 percent, will become a $25-billion industry by 2016, contributing about nine percent to the country’s gross domestic product (GDP) and capturing 10 percent of the global IT-BPO market share.

Allgeier said the local BPO industry is supported by a large and well-educated and English proficient workforce, advanced telecommunication infrastructure, lower labor and operational costs, and “relatively easy processes for establishment of BPO centers.”