Philippine BPO exports rise but lack value

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The export of commercial services from the Philippines, which are predominantly Business Process Outsourcing (BPO) services for which the country has built up a worldwide reputation, has grown in the first quarter 2012, data released last week by the World Trade Organisation and the UN Conference on Trade and Development shows.

Exports from the sector grew by 8.9 per cent in the period, outpacing average global rates of about 3 per cent. The value of commercial services exports stood at $4.14 billion in the first quarter, compared to $3.8 billion in the same period 2011.

Eighty-two per cent of the commercial services exported from the Philippines are BPO services — the rest fall under financial services and commercial services related to tourism, transport, shipping and telecommunications.

However, though the Philippines is earning its stripes as a major BPO exporter, it still lags behind ASEAN neighbours in terms of value.

The increase in export sales of commercial services was trumped by Singapore, who led the way in the region with $28.16 billion, as well as Thailand with $11.9 billion, Malaysia with $9.1 billion and Indonesia with $5.6 billion, the report says.

A reason for the sag in sales value is that the Philippine’s commercial services sector is largely seen as lacking high-value non-voice services, such as financial, accounting and engineering tasks.

“The BPO sector is a star performer, making the country a global destination, but it can’t remain with voice-based services and has to move up to higher-value services,” said Norio Usui, senior country economist of the Asian Development Bank at a business gathering in Cebu on July 5, as reported by Business World Online, a Manila-based news portal.

The challenge here lies in generating more human capital to plug into these more lucrative value-added services.

“Less skilled workers cannot be absorbed by the service sector. It needs staff with college degrees and skills,” Usui said.

Cebu is recognised by local experts as having a tangible foundation for IT and high-value BPO services and, unlike Manila, is attractive to foreign companies because of its favourable location that meshes well with a business environment.

Data from the Business Processing Association of the Philippines (BPAP) shows that the BPO sector’s revenue  increased by 24 per cent in 2011 from 2010 to $11 billion in revenue, providing jobs to 638,000 people. According to the BPAP, the industry will bring in $25 billion a year by 2016, making up 9 per cent of the Philippine GDP, 10 per cent of the sector’s global market share and employing 1.3 million Filipinos.

 

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Reading Time: 2 minutes

Call center in Manila

The export of commercial services from the Philippines, which are predominantly Business Process Outsourcing (BPO) services for which the country has built up a worldwide reputation, has grown in the first quarter 2012, data released last week by the World Trade Organisation and the UN Conference on Trade and Development shows.

Reading Time: 2 minutes

Call center in Manila

The export of commercial services from the Philippines, which are predominantly Business Process Outsourcing (BPO) services for which the country has built up a worldwide reputation, has grown in the first quarter 2012, data released last week by the World Trade Organisation and the UN Conference on Trade and Development shows.

Exports from the sector grew by 8.9 per cent in the period, outpacing average global rates of about 3 per cent. The value of commercial services exports stood at $4.14 billion in the first quarter, compared to $3.8 billion in the same period 2011.

Eighty-two per cent of the commercial services exported from the Philippines are BPO services — the rest fall under financial services and commercial services related to tourism, transport, shipping and telecommunications.

However, though the Philippines is earning its stripes as a major BPO exporter, it still lags behind ASEAN neighbours in terms of value.

The increase in export sales of commercial services was trumped by Singapore, who led the way in the region with $28.16 billion, as well as Thailand with $11.9 billion, Malaysia with $9.1 billion and Indonesia with $5.6 billion, the report says.

A reason for the sag in sales value is that the Philippine’s commercial services sector is largely seen as lacking high-value non-voice services, such as financial, accounting and engineering tasks.

“The BPO sector is a star performer, making the country a global destination, but it can’t remain with voice-based services and has to move up to higher-value services,” said Norio Usui, senior country economist of the Asian Development Bank at a business gathering in Cebu on July 5, as reported by Business World Online, a Manila-based news portal.

The challenge here lies in generating more human capital to plug into these more lucrative value-added services.

“Less skilled workers cannot be absorbed by the service sector. It needs staff with college degrees and skills,” Usui said.

Cebu is recognised by local experts as having a tangible foundation for IT and high-value BPO services and, unlike Manila, is attractive to foreign companies because of its favourable location that meshes well with a business environment.

Data from the Business Processing Association of the Philippines (BPAP) shows that the BPO sector’s revenue  increased by 24 per cent in 2011 from 2010 to $11 billion in revenue, providing jobs to 638,000 people. According to the BPAP, the industry will bring in $25 billion a year by 2016, making up 9 per cent of the Philippine GDP, 10 per cent of the sector’s global market share and employing 1.3 million Filipinos.

 

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