By Michelle Remo
Philippine Daily Inquirer
THE PHILIPPINES will continue to reap bounties from its burgeoning business process outsourcing industry, which has grown by leaps and bounds over the past few years, according to the World Bank.
In its latest quarterly report on the Philippines, the World Bank pointed out that growing income of the BPO sector had more than made up for the decline in tourism revenue.
“The rapidly rising BPO sector is building on the natural comparative advantage of the Philippines,” the World Bank said in a chapter of the report, titled “Exports of Services: Lessons from the BPO and Tourism Sectors.”
“Exports of services have been growing rapidly in the Philippines as fast as the growth of the BPO sector more than offset declining tourism receipts,” the report stated.
The World Bank also said factors like low cost, availability of human capital, tax incentives, and active promotion of the country’s capability to provide BPO services would allow the industry to post sharper growth in the years ahead.
Also, US-based companies that chose to outsource their services to the Philippines spent 80 percent less on operations compared to firms that had not, the World Bank added.
On human resources, hundreds of thousands of Filipino graduates join the country’s labor force every year. Most have skills that fit the requirements of the BPO sector. In 2008 alone, the report said, 444,810 graduates joined the labor pool and could be tapped by the BPO industry.
On tax incentives, a BPO firm in the country may enjoy an income tax holiday for up to eight years. Thereafter, it may be levied a minimal 5-percent gross income tax in lieu of all other taxes.
Last year, the Philippines outstripped India as the world’s “call center capital” in terms of manpower and growth in BPO receipts.
Industry data showed that at the start of 2010, revenue generated by the BPO sector in the Philippines stood at $5.5 billion compared with India’s $5.3 billion.
Also, there were over 500,000 Filipinos working in the BPO sector compared with around 330,00 Indians.
Saturday, 5 March 2011
By Michelle Remo