BPO firms unfazed by Obama ‘jobs bill’

Published on Thursday, 08 November 2012 21:04

Written by Max V. de Leon | Reporter

Business-process outsourcing (BPO) firms in the country are not worried about the possible resurfacing in the US Congress of a bill penalizing outsourcing. The bill was pushed by re-elected President Barack Obama in his first term.

Jojo Uligan, executive director of the Contact Center Association of the Philippines (CCAP), said the BPO industry is confident the US Congress will again junk the measure as the American lawmakers are seen to give more weight to benefits that US firms are getting in outsourcing some of their tasks, particularly in the Philippines.

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“BPOs in the Philippines are very beneficial to American companies. We deliver quality service at lower cost. We are still confident that the bill would not pass like the last time,” Uligan told the BusinessMirror.

President Obama, who won himself another term over Republican Mitt Romney, had pushed the “Bring Jobs Home” bill in his initial four years in office. It is one of his administration’s answers to the crisis that left millions of Americans jobless. The bill was sponsored by re-electionist Democrat Sen. Debbie Stabenow of Michigan.

Washington has given indications that the bill would be revived in Obama’s second term.

“President Obama’s job is the same as President Aquino’s job, to provide jobs to Americans, just as President Aquino’s job is to provide jobs for Filipinos,” US Ambassador tothe Philippines Harry K. Thomas Jr. said when asked
to comment on the “Bring Jobs Home” bill.

But Uligan said it was more likely that a bill targeting only the return of manufacturing jobs like in automotive—and not in services—to America would get a more popular support.

This, he said, is because call-center jobs, in particular, are the types of work that Americans shy away from.

“But we will continue to monitor the moves of Obama and we will act accordingly,” Uligan said.

The Business Processing Association of the Philippines (BPAP), in a statement, congratulated Obama on his re-election to a second term despite speculation that his victory may resurrect talks on the passage of anti-outsourcing legislation in the US Senate.

“We congratulate President Barack Obama on his re-election. While there has been speculation that anti-outsourcing legislation may be revisited, the Philippine IT-BPO industry will continue to support the US economy and American businesses to help ensure they are among the most competitive in the world while freeing up resources to create more jobs in the US,” said BPAP President and CEO Benedict Hernandez.

He said, “Outsourcing business services to the Philippines helps make American companies more competitive and profitable. Profitable companies hire more workers, both here and in the United States.”

The “Bring Jobs Home Act” failed in the US Senate in July. It was intended to eliminate tax breaks for US companies outsourcing services and manufacturing jobs to other countries and provide a 20-percent tax deduction on costs associated with closing outsourced operations and transferring jobs to the US.

“Numerous studies have shown that outsourcing has little negative impact on job losses and, in fact, fosters job growth in companies that outsource business processes.

“Dartmouth’s Tuck School of Business economist Matthew Slaughter, in a study of the hiring practices of 2,500 US multinationals, found that for every job outsourced, nearly two new jobs are created in the US,” Hernandez  said.

From a $35-billion global IT-BPO market in 2009, the industry is expected to generate at least $220 billion in revenues this year, according to a report by the Everest Group. “Demand for global IT-BPO services is huge and continues to expand at a rapid rate,” he said. “Outsourcing is a win-win proposition, and we believe that both American and Philippine companies—and American and Filipino workers—will continue to benefit from the opportunities it provides,” said Hernandez.

In 2011 the Philippines’s IT-BPO industry generated more than $11 billion in revenue and employed almost 640,000 Filipinos. By 2016  it is expected to grow to $25 billion in annual revenue and employ 1.3 million, according to an industry road map.