Philippines Urges BPOs to Offer High-Value Services

The Business Process Outsourcing (BPO) industry is fighting competition from countries that offer cheaper rates. So it’s not surprising that the Business Processing Association of the Philippines (BPAP) has suggested measures to combat competition.

According to an economist, the BPO industry can combat competition effectively by venturing into more valued segments such as research, accounting and finance.

The only way to earn more revenue, according to economist Cid Terosa of the University of Asia and the Pacific (UA&P), is for the non-voice segment of the outsourcing industry to “have higher value-added so revenues can go up.”

To stay competitive on the global BPO radar, Terosa advised BPO companies to expand and find areas that have “low costs of doing business and enough telecommunications infrastructure.”

The economists have been studying the current scenarios for future of BPOs in Philippines as the industry is worried about competition. BPAP issued a statement suggesting that the strong local currency, Peso, in the international market, made outsourcing to the Philippines 30 percent more expensive than India.

Philippines is number one in providing voice services for the global market, but remains second in line in non-voice processes, with India leading the competition. To lead in the non-voice service industry, a country first needs to competent enough and needs to master skills that are required to develop a good foundation of industry.

BPO services in Philippines have yet to offer quality services in the area of high-value operations such as software development , healthcare management, engineering, financial analysis and animation.

"To ensure the continued success of the industry, we need to equip more of our people with skills in high-value operations," said Philippine senator Edgardo Angara. Angara is also the Chairperson of the Senate Committee on Science and Technology of the country. He urged the stakeholders in the IT-BPO (Information Technology and Business Process Outsourcing) industry to take more initiatives.

Angara sought improvements and support in human resource development and training so that the BPO industries can reach their goals of shifting toward excelling in non-voice, high-value services.

A new survey of BPAP members on the impact of the steadily appreciating Peso showed that 46.7 percent of the respondents were having tough times and felt difficulties in reaching their respective revenue targets.

However, the Peso, which is the currency of Philippines, has been performing strongly as of late. 

A weaker currency is beneficial. Other economists had called on the private sector earlier to push for government intervention so that they take measures to weaken the peso. A strong Peso hurts the interests of exporters and the BPO firms that largely benefit from a weaker currency. 

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