Batuhan: BPO phenomenon (Part 2)

Allan Batuhan

Foreign exchange

FIRST of all, may I wish all our readers a very Happy New Year! May this year be much better than the last.

On the other side of the new year, we were talking about the nascent Philippine business process outsourcing (BPO) industry, and how this has helped the Philippines sort out its economic difficulties in a significant way, the ineptness of our current economic and political leaders, notwithstanding.

If there ever was an industry that the Philippines can and should lay claim to, it has to be that of business process outsourcing. Much more than Japan and South Korea can monopolize manufacturing technology as their own, there are a lot of advantages that can make the Philippines the king of BPO, if it chooses to be.

First, we are by far, still much cheaper than the developed countries, in terms of our labor rates.

Where our newly hired employee in a BPO company—fresh out of college—would pick up a starting salary of about P15,000, this person’s equivalent in the United States and Europe would easily be making over P100,000, for doing exactly the same kind of work.

Second, our relative command of the English language is almost second to none in the developing world. As it happens, most BPO work today comes from the English-speaking economies in North America and Europe, so the trend suits us nicely from this perspective.

None of our neighbors in the Association of Southeast Asian Nations, and certainly not the Chinese, have our expertise in terms of speaking and working in the English language, so from that standpoint, we have a virtual monopoly of the market.

Of course, India—our most significant competitor for BPO business—is also very strong in English language skills.

But between them and us, there is enough of a market to go around.

The attractive promise of the BPO industry notwithstanding, there is still much that we have not done in order to maximize the country’s opportunity to attract more locators to come in.

Plenty, in fact, to make the next president aspirant already start having sleepless nights thinking what he could do to change the situation.

For starters, we need to be more investor-friendly.

It is easy enough to claim that we make it easy for companies to come in and do business in the Philippines, but another thing to actually make it happen. Talk is cheap, as they say, but actions speak louder than words.

Take the issue of investment incentives, for example.

The Philippine Economic Zone Authority (Peza), among all the government agencies, has to be the friendliest and the easiest to deal with, among all the other regulators that BPO companies come across. This is the good news. The bad news is that everybody else is the opposite, and riddled with all sorts of graft and other corrupt activities.

Take the case of an unnamed BPO company that wanted to locate in one of the areas where these types of companies are normally clustered. To complete its Peza registration, it had to have some clearances from the municipality of the place where it was wanting to locate. One would have thought that the city council would pull out all the stops to make sure that the clearances were issued on time, so the company could commence with its business posthaste.

But did it do this?

No, sir. Upon learning that this company’s headquarters is in Houston, Texas, it had the nerve to ask the company for some fighting cocks, in exchange for the release

of its clearances. More next week…

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