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MANILA – The Philippines’ business process outsourcing industry on Monday said it expects to grow by a fifth this year despite rising costs brought about by the peso’s appreciation.
In a presentation during the Philippine Economic Briefing, Benedict Hernandez, president of the Business Processing Association of the Philippines, said the industry will likely grow by 20 percent this year, exceeding its forecast of 15 percent.
Leading growth this year would be the non-voice back-office services, the expansion of which would likely match last year’s 41 percent, he said.
He said the industry is diversifying its service offerings as well as markets to sustain growth as well as mitigate the impact of a strong peso.
The BPO industry is also ramping up human resource development, through scholarships and partnerships with academic institutions, as only one out of every 10 applicants can land a job in the sector, Hernandez said.
He said the government should continue to provide incentives to the BPO industry given erosion caused by the peso’s strength, and also put in place disaster prevention and mitigation measures, in order to maintain the country's edge.
While the industry is bullish of sustaining growth, the strong peso is jacking up costs and diminishing the Philippines’ competitiveness vis-a-vis BPO giant India, Hernandez said.
He said BPO operations in the Philippines are 20 percent more expensive than in India, higher than the 6-10 percent cost differential last year.
The peso last week hit four-year highs vis-à-vis the US dollar, alarming exporters who lose competitiveness whenever the local currency appreciates.
Still, the peso's strength would only “minimally impact” on the growth of the BPO sector this year, Hernandez said.
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