Proposed US Outsourcing Bill Endangers RP BPO Industry

Empty Workstations: With fewer foreign companies outsourcing their business processes and operations to countries like the Philippines, the unemployment rate will consequently be on the rise.

There is a looming danger that the Philippines’ business process outsourcing (BPO) industry might have to deal with in the near future if the US Congress decides to favor a proposal against the outsourcing of call center operations.

In the proposed bill, American companies are discouraged from fielding out their call center operations to offshore locations.  To make it less appealing for these American companies to take their call center operations outside their home country, the bill proposes that those companies with overseas call center operations to be ineligible for federal financial grants and federal guaranteed loans.  A daily fine of $10,000 is also proposed as a penalty for companies who fail to disclose offshore relocations within 60 days.  Additionally, companies with call center operations will be required to disclose their location to their customers.  Customers who are serviced by these call centers will also be allowed to choose whether they wish to speak to a call center operator who is located in the US or not.

If and when this proposed bill is approved by the US Congress, the Philippine BPO industry will no doubt be negatively impacted.  Palace deputy spokesperson Abigail Valte said that “obviously, magkakaroon ng impact ‘yan sa atin because BPO is one of the major industries now in the Philippines, and we have a large part of companies coming from not just in other countries but mainly from the United States.”  Even with the bill still pending in congress, the government is already set to discuss possible implications and to draw up an action plan in order to mitigate the effects of the bill’s approval.    

At present, the Philippines’ BPO industry is among the largest in the world, second only to India.  Over half a million people are employed in this $10 billion industry.  Among the fields that are served by the country’s BPO industry include financial services, human resources, information technology, software development, business management services, engineering design, and animation among others.  Economic experts have projected the country’s BPO industry to have an average annual growth of 20% for the next five years.  An economist from the Asian Development Bank (ADB), however, warns the government against relying on the BPO industry too much for economic growth.  These projections and assumptions will have to be tweaked again, taking into consideration the impact of the possible passage of the BPO bill in the US Congress.

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