BPO sector seen paying P247 billion in wages this year

MANILA, Philippines - The labor-intensive business process outsourcing (BPO) sector is expected to pay a total of P247 billion in wages this year, one of the industry’s backers in Congress said yesterday.

House Deputy Majority Leader and Pasig City Rep. Roman Romulo said BPO firms on average spend around 40 to 45 percent of their revenues to compensate their staff as “the industry is basically adding high-value labor services.”

At this rate, BPO companies would be disbursing approximately $5.85 billion in salaries this year based on projected industry revenues of up to $13 billion, he said.

“No matter how we look at it, P247 billion represents a huge amount of money being coursed through the economy every year, and helping to drive consumption spending,” Romulo said.

He said consumption spending in turn has helped to create recurring demand for goods and services, thus perking up domestic industries.

“To put the P247 billion into perspective, it is equal to around 14 percent of the National Government’s P1.816-trillion spending program this year, and larger than the budgets of the top five departments,” the lawmaker said.

The Department of Education is spending P238.8 billion this year; Department of Public Works and Highways, P125.5 billion; Department of National Defense, P107.9 billion; Department of the Interior and Local Government, P101.4 billion; and the Department of Agriculture, P54.1 billion.

A recent survey by the Bangko Sentral ng Pilipinas showed that BPO employees on average receive P383,863 in annual compensation, he said.

Romulo said the P247 billion is also some 53 percent greater than the P161 billion in combined annual benefits paid by the Social Security System (SSS), Government Service Insurance System (GSIS) and Philippine Health Insurance Corp. (Philhealth) to their respective members.

The SSS and GSIS paid P76 billion and P50 billion respectively in benefits to their members in 2011, while Philhealth paid P35 billion, he said.

The BPO industry is projected to rake in up to $27 billion in annual revenues and directly engage some 1.3 million Filipino workers by 2016. It posted $11 billion in revenues on a labor force of 638,000 in 2011.

This year, the sector hopes to create 126,000 new jobs and generate $2 billion in extra earnings, according to the Business Processing Association of the Philippines.

The industry encompasses contact center services; back offices; medical, legal and other data transcription; animation; software development; engineering design; and digital content.