Golez: This is an analysis by an outsider. It is very objective and raised very good points. The Philippine BPO sector is a high growth sector that is projected to generate $25 Billion cold cash for the Philippines and employment for 1.3 million Pinoys. Around 80% of that is from the US. It is projected to grow by 17% per annum reaching $50 Billion by 2020. The economy is a major, major determinant of foreign policy. Major, major Mr. President. China cannot match that annual cash flow.
Duterte's curses are a blessing for Indian BPO companies
Over the past few months the Philippines president has lashed out at critics of his war of drugs in his country. The crackdown and the condemnation that followed are beginning to fray ties with the US, the country's largest trading partner.
Over a million Filipinos work in the call centre industry, which has managed to attract a large chunk of the voice-based customer service business from India. But the recent spat means that India has a chance to take some work back. "We have seen some American companies become more hesitant about the Philippines. They have centres there and in other geographies but now they are coming back and looking at India for their investments. That would not have been on the table before," Christopher Caldwell, CEO of US-headquartered BPO company Concentrix, told ET.
Concentrix paid $420 million to buy Indian BPO Minacs earlier this year and spent $505 million to buy IBM Daksh three years ago.
Other BPO executives also said that they have begun to see a shift in interest.
"At least three customers who have over 1,000 full-time equivalents in our centres in the Philippines have started discussions about whether they could move incremental work here. It's a question of hedging their bets," a top executive at a large Indian BPO company said. He declined to be identified because the company has a presence in the Philippines.
In October, the senior advisor to the American Chamber of Commerce in the Philippines told media that several trade missions and BPO investment plans in the country had been cancelled. A second BPO CEO said even a 10% shift could see 100,000 jobs become available for India to grab. The CEO added that given the expected rise in the minimum wage in the US it was likely that there would be another wave of call centre work to be offshored and that India could position itself to benefit.
India had already started taking work from the Philippines as a stronger focus on email, social media and chat-based customer service meant that the lack of an American accent in voice is no longer as big a drawback. But experts say that though Indian companies may win the contracts, there is no guarantee that all the incremental jobs will be created in India.
"We have already seen high-value work come to India but clients may ask Indian companies to help them relocate some of the premium voice work to countries like South Africa," KS Viswanathan, vice-president at industry body Nasscom, said.
Indian BPO executives also hope that the government will work with the industry to attract the business to India.
"My company will get the revenue whether we do the work here or there or in any other geography. But if the jobs have to be created here, then the work has to be done here. For that the government has to help out," one of the CEOs quoted above said.
The BPO sector has asked that the government make it easier for them to do business and use some of its heft in attracting the customers even suggesting that there could be some kind of 'offset-like' requirement for companies which do business with the Indian government.