BPOs prefer stable peso

The business process outsourcing (BPO) industry prefers a stable peso although a weak one will make it more competitive.

BPOs are the second biggest dollar revenue generator ($21 billion a year) after the remittances ( $25 billion) sent home by overseas workers.

Benedict Hernandez, chairman of the executive committee of the Information Technology Business Processing Association of the Philippines (IBPAP), said the weakening of the peso is making the Philippines more attractive but noted stability of the currency and the quality of Filipino service are more important considerations in choosing the country for BPO operations.

Hernandez said it is business as usual for the industry even if clients have started asking questions about the implication of the declaration of state of national emergency.

He said IBPAP is set to meet with the Philippine National Police for a dialogue on the reported Operation Tokhang (frisking of drug dependents) on the BPO industry.

In a press conference on the sidelines of the 11th International Contact Center Conference & Expo (ICCCE)at the Marriott Manila yesterday, Hernandez said the BPO industry, being export-oriented, benefits from a weak peso in terms of cost.

About 70 percent of cost, such as labor and telco, is in local currency and revenue is denominated in US dollars.

“But (BPO firms) are not basing their decision on that; what they want is a more stable currency which what the peso has been over the years,” Hernandez said.

A weak peso enables outsourcing companies to price their services competitively against the country’s biggest rival in this space, India.

But Hernandez said from almost parity exchange rates of the Indian rupee and the Philippine peso in 2010 to 2012, the former has weakened significantly to about 66 to the dollar compared with 48 for the peso.

“Despite the currency difference, we maintained our growth year over year; the unique Filipino service has always been our strength. Clients prefer our professionals regardless of currency,” Hernandez said.

According to Hernandez, the group has been receiving questions on the state of national emergency and how it would affect policies on the industry.

This prompted IBPAP to issue two communiqués to assure clients there are no changes in the policy environment nor on the travels and movements of personnel and expatriates.

IBPAP is set to release a roadmap of the industry in October. Initial findings of the roadmap being drafted by Frost & Sullivan said up to a million additional jobs are expected to be created within the next six years or until 2022, mostly for mid- to high-skills.

Source: https://goo.gl/y9G9Te