India, a favorite destination for the business process outsourcing (BPO) sector, is outsourcing its operations.
Go to Cebu or Clark in Pampanga, or check out certain operations in Metro Manila. You will discover some of India’s largest companies operating call centers where Filipinos are fielding questions for major American firms including an airline.
It’s not that Filipino labor is cheaper; India is one of the few countries in the world that can compete with China in offering investors bargain-basement labor costs.
The Indians are coming here because Filipinos speak the kind of English that Americans understand, and because Filipinos have more patience and empathy in dealing with people.
This is not according to the rah-rah folks of Malacañang but India’s ambassador to Manila, Rajeet Mitter, who believes the Philippines can weather the global downturn better than several other countries.
Mitter observes that working in a call center is no easy job. Many of the workers toil while the rest of the country is asleep. Fielding calls from, say, harried airline passengers who have lost their luggage requires special “people skills” – something that Indians often lack but which most Filipinos have, according to Mitter.
Those natural people skills have given Filipino nurses, nannies, cooks and other workers in the service sector a competitive edge in the global job market.
Those skills have also helped make the BPO sector one of the brightest spots in the Philippine economy for some time now.
And those skills, coupled with other capabilities as well as labor and operating costs that are still lower compared to rates in the United States, could help Filipinos keep their jobs as the US recession deepens and the contagion spreads.
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This, of course, is a best-case scenario. It’s the season of hope and we should set aside pessimism.
But it’s always good to keep in mind the admonition to prepare for the worst even as we hope for the best.
The Indians and other investors are coming here, with job opportunities for Filipinos, but the BPOs are running out of workers with the required skills.
Ambassador Mitter told me before Christmas that the lack of qualified workers has become such a problem that some firms have started pirating employees.
The nation has received ample warning about this problem, which stems from the poor quality of Philippine education. For several years now, educators and investors alike have warned that the quality of education has deteriorated so much that the country has lost its competitive edge and key industries cannot find enough qualified workers. All international surveys on national competitiveness in recent years have shown the Philippines on a steady slide.
That competitive edge includes English proficiency – a key requirement for those who want to work in call centers, where currently thousands of jobs cannot be filled.
Those call centers could absorb a number of workers who are now being laid off both in the Philippines and overseas amid the downturn.
Already semiconductor giant Texas Instruments, one of the most durable investors in the Philippines, is cutting 400 jobs in its Baguio plant by January.
The collapse of the US auto industry will be felt around the world. And while motorists are rejoicing over the plunge in fuel prices amid low energy demand, the downturn is sure to affect the jobs of a hefty percentage of Filipinos working in the Middle East and in possibly every commercial ship around the world.
In Dubai, where there are 250,000 citizens and about a million foreign workers, the construction boom has halted, prices of gold and real estate are down, and thousands of workers are expected to be sent home at the start of the year.
The best that we can hope for is that Filipinos’ special skills will help them sit out the economic typhoon and keep their jobs in Dubai and other countries. By the most optimistic prediction, recovery will start only in late 2009.
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The full impact of rising unemployment and a substantial drop in the remittances of overseas workers will be felt by the country next year.
Poverty is likely to worsen. A foreign government that keeps close tabs of Philippine poverty figures calculates that over three years, the percentage of the population suffering from food poverty rose by three percent, to 33. But in the past year alone, food poverty went up by three percent as a result of the spike in prices of food, mainly rice.
Rice prices have softened and inflation has settled back to single-digit level, though it was pulled down largely by the plunge in fuel prices.
The government is targeting a growth rate of about 4 percent next year. For any economy to grow at all in this downturn is accomplishment enough. But how much of that growth will trickle down to the masses?
It may help that as the ranks of the unemployed swell next year, the campaign for the 2010 elections will also start in earnest, though unofficially. From past experience, we know that elections help spread the wealth around. Money flowing from political war chests could augment government subsidies to the poor.
Where that money to spread around will come from is another story. The buzz is that jueteng is back with a vengeance. A prominent character notorious for dirty tricks is said to be in charge of the jueteng fund raising, and authorities are looking the other way.
The last time the government launched a serious crackdown on jueteng, workers in the illegal industry came out in the open to lament the loss of their jobs.
We wouldn’t want more unemployment at this time, now, would we?
The jueteng operators and collectors will keep their jobs, so that’s one less sector to worry about in this downturn.
Other workers who lose their jobs may have to learn new skills or improve on existing ones as they wait for the global economy to improve.
Our edge in natural people skills, prized by investors including Indians, will help but won’t be enough. We need a renewed focus on education. We need to retool.