Thursday, 4 June 2009

What recession? Philippine Central bank sees $6-B BPO earnings this year

Manila Bulletin

The Bangko Sentral ng Pilipinas (BSP) has raised its earnings forecast for the business process outsourcing (BPO) sector to $6 billion this year from $3-$4 billion.

BSP monitors all foreign exchange (FX) flows into the country including remittances from overseas Filipinos, foreign direct investments, dollar reserves, among other FX indicators.

BSP deputy governor Diwa C. Guinigundo said the BPOs remain one of the growth drivers of the economy because of its impact on the services sector.

The central bank’ $6 billion projection, although higher than previous forecast, is lower than industry projection of $7.5-$8 billion for this year.

The Business Processing Association of the Philippines (BPAP) said revenues will likely grow by 30 percent from 2008’s $6.06 billion. BPAP’s original forecast was 40 percent but with the global economic slump and its impact on BPO demand, growth projections were reduced.

Guinigundo said the continued shift to high-value services such as back office services, IT outsourcing and engineering/design process delivery, along with the increasing need to outsource non-core business activities of firms operating in advance economies, are expected to propel the growth of the BPO industry in 2009.

The BSP has its own BPO survey called “Benchmark Survey of IT-Enabled Services” to monitor the FDI inflows. Since 2006, the BSP has been coordinating with various government agencies and private sector groups to institutionalize the regular conduct of the survey. Besides the trade department, the National Statistics Office and the National Statistical Coordination Board will also work with the BSP to consolidate numbers and definition of terms.

The first BSP-led BPO survey was released in June 2007, but there is a two-year lag since the review only covered the period 2004 and 2005.

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