Status Quo on Perks Sought for BPOs

The Contact Center Association of the Philippines (CCAP), whose members currently account for close to 70 percent of the information technology-business process outsourcing (IT-BPO) business in the Philippines, wants status quo on the incentives granted to the industry to ensure the country’s reputation as the preferred outsourcing destination.

CCAP wants clear direction from government as it hopes to attract some 100 companies – a combination of clients, outsourcing firms with global presence – to come to the Philippines and explore business opportunities when the group holds next month the 11th International Contact Center Conference and Expo (ICCCE).

Benedict Hernandez, president of CCAP and chairman of the Information Technology and Business Processing Association of the Philippines (IBPAP), told reporters the planned revamp in the corporate income tax and the consequent review of the current incentive regime would impact on the industry, which now enjoys a preferential tax rate of 5 percent on gross income earned if a firm is registered with the Philippine Economic Zone Authority (PEZA).

Hernandez said CCAP and IBPAP want to have closer dialogues with government officials such as the Department of Finance, whichintendsto find additional revenues in exchange for lowering both corporate and income tax rates.

At the same time, Hernandez sees the need for a comparative study on a lower corporate income tax rate, say at 25 percent on net income against what PEZA-registered BPOs enjoy at present.

Hernandez said taxation is a key cost consideration by global companies in their choice of sites, which is an advantage that the Philippines currently has.

He added the Philippines’ incentive package for the IT-BPM sector is even less attractive than Malaysia, which in recent years has been beefing up its own outsourcing sector. To make up for the higher cost in Malaysia, its government also provides free space to outsourcing firms.

Hernandez noted the contact center industry has in recent years been less dependent on the United States as a source of investments and clients. Whereas before the market of the call centers was 100 percent for the US, this has shrunk to 70 percent.

He said Australia has been the fastest growing market for the Philippine call center industry since it started doing business five years ago. Europe is also a strong market.

More recently, even Singapore and Hong Kong companies outsource some of their jobs in the Philippines.

The industry targets to hit $16 billion revenues this year.

All told, CCAP employs about 800,000 out of the 1.2 million workers in the IT-BPO sector.

Themed as “Contact Islands: Opportunities in the Ultimate Customer Experience Paradise”, the 11th ICCCEwill give prospective clients and investors a chance to get firsthand learning experience from industry experts and leaders on how to do business in the country, meet with prospect business partners and enablers, connect with industry peers and see live operations with business tours.

Source: http://goo.gl/A1iTF4