Thursday, August 23, 2007 MT companies face closure
SMALL-SCALE medical transcription companies in Cebu may be forced to either close shop or consolidate with bigger players in the next two years as the fate of the country’s medical transcription industry hang loosely on the strengthening of the peso against the dollar.
International School for Medical Transcription (ISMT) chief marketing officer Mawit Go said the continuous appreciation of the local currency led to the closure of two local medical transcription companies this year.
She declined to identify the two companies and their location, however.
Cebu-based ISMT is the training arm of Northern Transcription-Works Inc. (NTWI), an 80-seater medical transcription company serving 40 clinics and over 900 doctors worldwide since 2003.
“The (rising value of the) peso is really hurting the industry. If this continues, many more will decide to cease operations, will be discouraged to (invest) or will have to merge with bigger companies,” she said.
With the local currency’s appreciation, dollar revenues of medical transcription companies in the Philippines will translate into fewer pesos for salaries and operation expenses.
The peso stands at the P45 to P46 level against the dollar this month. It hit a seven-year high of P44.80 last July 20, boosted by foreign inflows and remittances from the overseas Filipino workers market.
Go expressed fears that the situation will cause medical transcription companies to downsize their workforce in the next few months as profit margins diminish.
She echoed the earlier call of the Medical Transcription Industry Association of the Philippines Inc. for government and the Bangko Sentral ng Pilipinas to intervene in foreign exchange market.
“They (government) have to understand really that at P44 to a dollar, I can see a lot of people crying,” Go said.
To protect itself against the negative effects of the peso’s appreciation, NTWI, like some export companies, is planning to venture into instruments that prevent investment losses like hedging.
For those intending to keep their heads above the water, Go advised small scale medical transcription companies, and those “who are not doing pure medical transcription works” to merge with bigger players, a growing trend in India.
“India also suffered currency issues in 1999 and eventually smaller companies closed. Those who remained decided to consolidate,” she told Sun.Star Cebu in a phone interview.
Go said, however, that the medical transcription industry continues to show a strong demand worldwide, particularly in the United States, Australia, Canada and the United Kingdom.
To maintain the industry’s competitiveness, she urged companies to continue pushing for efficiency.
“This is a reputation-based industry, we have to continually improve and innovate our services to have a good reputation abroad,” she said. (MMM)
