Phl BPOs to benefit from downsizing by US firms

MANILA, Philippines - A fresh wave of downsizing at large US financial holding companies is expected to benefit Manila’s booming business process outsourcing (BPO) sector, House Deputy Majority Leader and Pasig City Rep. Roman Romulo said yesterday.

“American banks will likely accelerate the transfer of more back offices and business support jobs to lower-cost locations such as the Philippines in the months ahead,” said Romulo, a key congressional backer of the highly labor-intensive, information technology (IT)-enabled BPO sector in the Philippines.

He said that US companies are still under a lot of pressure to slash costs to stay profitable.

“Amid a sluggish US economy, there are estimates American banks may shed another 150,000 jobs this year,” he said.

Romulo, who is also vice chairman of the House Information and Communications Technology Committee, said the BPO industry is projected to produce up to $27 billion in revenues and directly engage some 1.3 million Filipino workers by 2016.

This year, the Business Processing Association of the Philippines sees the industry generating $13 billion in revenues on a labor force of 764,000, he said.

The lawmaker’s statement came shortly after Bank America Corp. (BA), the second-largest US financial holding company with global assets of $2.2 trillion, bared plans to shed another 16,000 US jobs by year’s end.

The job cuts would see Charlotte, North Carolina-based BA giving up its title as the US banking industry’s largest employer.

Founded in 1904, BA operates in more than 40 countries and has over 282,000 employees, mostly in the US.

Like its three biggest rivals—JP Morgan Chase & Co., Citigroup Inc. and Wells Fargo & Co.—BA already has a global in-house center (GIC) in Manila that provides a wide range of non-core, business support activities, Romulo said.

Taguig City-based BA Continuum Philippines Inc. “provides back-office operations and transactions, customer support and service functions, technology support and services, general human resource functions, business planning and general financial services.”

Romulo also cited the rise of two new IT parks in his congressional district of Pasig City which he said would provide the extra infrastructure and connectivity required to buttress the BPO sector’s solid growth.

BPO firms are the primary locators in tax-sheltered IT parks registered with the Philippine Economic Zone Authority, he noted.

The PSMT IT Building and Reliance IT Center in Pasig are among the 22 new IT parks being developed throughout the National Capital Region, he said.

Romulo is the author of the Data Privacy Act of 2012 which is expected to further encourage global corporations to either establish new GICs in Manila or relegate their business support activities to independent BPO firms operating here.

He said the law puts the country’s personal data protection at par with global standards. It mandates all entities, including GICs and BPO firms to safeguard the confidentiality of personal information collected from clients.

The country’s IT-enabled services industry includes contact centers; back offices; medical, legal and other data transcription; animation; software development; engineering design; and digital content.