Tuesday, 10 March 2009

Philippine BPOs still hiring

Outside the Box
John Mangun
Business Mirror

A Bloomberg article on March 6 reads: “Tina Gutierrez, a Filipina, lost her job as a telemarketer in Dubai last month. ‘Everybody seems on edge, worrying whether one day they’ll just lose their jobs,’ said Gutierrez, 30, who was sending money back to her four-year-old son in the Philippines. ‘You can really feel the tension, especially among foreign workers like the Filipinos who have to send money home or their families won’t eat.’”

The thrust of this Bloomberg article is that a story like that of Ms. Gutierrez is why all the experts believe the peso is going to depreciate this year. I will speak to that in a moment, but will first deal on the reality of this unemployed overseas worker.

The salary of a call agent in Dubai ranges from P26,500 to P100,000, with a very good salary being about P65,000. Seems like big money, isn’t it? Housing in Dubai costs about P25,000 a month, with transportation adding another P10,000 expense. Some companies provide housing and transportation, but not all.

So Tina is netting on the high side of about P40,000 before personal expenses, if she is very experienced. But let’s assume Tina is of the entry level, with housing and transportation being provided. Before personal expenses, she makes about P30,000 a month.

The best thing that could happen to her is getting fired from the job in Dubai.

As an entry-level call-center agent in Manila, you can start working tomorrow for an absolute minimum of P15,000 a month. With bonuses and differentials, that goes to P18,000 to P20,000. But Tina has experience. She can easily start at a minimum of P25,000 plus bonus. If she has the ability to be a manager, she can earn P40,000 to P50,000. Higher management makes P60,000 to P80,000.

I am willing to bet that working at a Filipino call center in Manila, Tina will have just as much money to support her child as if she was working abroad. At the worst case, this question must be answered: Is the social cost of Tina’s son being raised without a mother worth, perhaps, P5,000 a month? Only Tina can answer that question for herself.

But after the salary comes the worry that the Dubai job is not stable. All the more reason one has to be in the Philippines. Local call centers are desperate for new employees to fill all the positions available. Companies are offering a P20,000 “signing bonus.” Currently working in a call center? One firm will give you a P15,000 bonus for recruiting a new call-center agent.

There is not and will not be any shortage of jobs in the Philippines for a long time to come. Consider these: “Telus International Philippines, the local arm of Telus Corp., has added another 900 people to its employee base.” “Apac Customer Services Inc. Leyte has 225 employees. The number of employees will be about 600 in April, and before the end of the year, the number will reach the 1,000 marker.” “After the inauguration of the TeleTech Iloilo Delivery Center at SM City Iloilo, they announced that they will be hiring additional 2,000 call- center agents this year.”

Stories like these are in the papers almost every day.

In 2008, 8 million overseas Filipinos remitted some $16.5 billion, true heroes of the Republic. The “experts” are worried this money number will fall in 2009 by as much as 10 percent and that fact will severely hurt the economy. These “experts” do not know what they are talking about. Even if that number is true, the Philippines will not suffer because call-center growth will take up the slack.

Each overseas worker sends back about $2,000 a year ($16.5 billion divided by 8 million workers). However, the economic impact of each call-center employee is eight times as great as an overseas Filipino worker (OFW). In other words, each worker at a call center is worth eight OFWs in terms of financial impact through remitted funds.

There are as many as 500,000 directly employed in business-process outsourcing (BPO), including agents, guards, janitors, messengers, drivers and other personnel. That number is perhaps even on the high side. Virtually every centavo spent to pay for these local operations comes from clients and parent-companies remitting dollars to the Philippines. Call centers brought in about $8 billion in 2008 to pay for operations in the Philippines. That $8 billion divided by 500,000 employees means that each of these BPO workers generated $16,000 against $2,000 for each OFW.

Even if the worst-case scenario of OFW-remittance decrease and the worst-case scenario in the increase in BPO employment come true, the Philippines will drop only $200 million in remitted money in 2009 versus 2008. That will have negligible impact on the economy or on the value of the peso. However, if OFW remittances show no growth, and the BPOs grow even at a low of 20 percent, the net remittance effect will be an additional $1.6 billion, and that will have a positive impact on the Philippines.

So Ms. Gutierrez, I know working in Dubai must be exotic, but your family needs you. You are more important and valuable to your family and to your country working right here.

To the foreign economic “experts,” why don’t you try learning about what the Philippine economy is all about in 2009? No, never mind. Stay ignorant and wrong. I am looking forward to an anticipated enjoyment and pleasure to say “I told you so” in about nine months.

PSE stock-market information and technical-analysis tools were provided by CitisecOnline.com Inc. E-mail comments to mangun@email.comThis e-mail address is being protected from spambots. You need JavaScript enabled to view it .

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