BPO sector needs more college grads

MANILA, Philippines - The business process outsourcing (BPO) industry will need more college graduates for its expansion projects, Pasig City Rep. Roman Romulo said yesterday.

“We have to churn out more college graduates at a faster rate in the years ahead. Our college-educated English-speaking labor force is our biggest advantage. We have to work very hard on this asset if we want to capture a bigger chunk of the global outsourcing market, estimated to be worth some $280 billion by 2017,” he said.

As of now, only two in 100 Filipinos in the prime employable age bracket of 20 to 34 are college graduates, he said.

Citing Commission on Higher Education figures, Romulo pointed out that college graduates increased by only 2.9 percent to 481,862 in 2010, and comprised just two percent of those inside the best employable age range of 20 to 34.

The Pasig congressman has authored a bill seeking to enable the country to produce more college graduates via a bold new student loan program.

Under the program, an eligible student may obtain a low-cost bank loan to pay for the tuition. The money may also be used to pay for miscellaneous fees, books, food, transportation, and other necessities.

The loan would have an effective interest rate pegged to the benchmark 91-day Treasury bill rate.

The bank may apply an add-on three to five percent annual interest rate. However, instead of the borrower paying for the extra interest expense, the bank may claim the corresponding amount as tax credit. The lender may then use the credit to pay for or offset its tax obligations.

Romulo also said the strengthening peso poses “some risk” since some multinational BPO firms might be driven to branch out to other locations outside the Philippines.

“The risk of a rising peso is somewhat being heightened by the fact that the currency of our chief competitor in the global BPO market, India, is doing the opposite and falling against the dollar,” he said.

Like exporters, the Philippine operations of multinational BPO firms earn dollars, but spend for their operations here, such as the wages of their staff, in pesos, he said.