BPO sector told to shift to high-value services

CEBU, Philippines – An economist urged the Philippine business process outsourcing (BPO) industry to increase productivity by shifting to high-value outsourcing services.

Andrew James Masigan revealed in a recent economic forum in Cebu City that 66% of the industry is still concentrated in contact centers, deemed to be the lowest rung of the BPO sector in terms of revenue yield.

"The ugly secret that this government is not telling us is that the BPO industry is not as productive as they would like you to believe," Masigan said.

While the industry is considered as the country's third largest income generator (it earned $15.3 billion last year), Masigan noted contact centers, which have low productivity, absorb almost two-thirds of total BPO employment.

He said contact center workers are only paid $15 a day, lower than what high-value outsourcing services can provide.

Masigan, who is also a political analyst, said the Philippines should follow India whose BPO companies are offering software programming which earns $45 per day.

He said BPO workers in the Philippines earn an average $20 a day, which remained stagnant since 2008.

"That's not much. Is it something to be proud about? Yes, because it provides jobs. But are we strategically moving at the right direction? No," he noted.

The economist pointed out the Philippines has yet to develop its competency in high-paying outsourcing services such as software development, transcription and engineering process outsourcing.

He urged the BPO industry to go up its value chain to hike the income of its workers and eventually improve the sector's competitiveness.