Overseas Filipino Workers Uneasy Over Outsourcing
Mike Banos
July 08, 2006
What better way could one wish for to end the celebration of ICT Month in Cagayan de Oro than with the launching of the city's "Official Website?" With that symbolic gesture, the efforts of a dedicated band of professionals in government, business and the academe have been given an exclamation point, as if to inform all and sundry, "We are H-E-R-E! THIS is CAGAYAN DE ORO!"
I tip my hat to the dedicated men and women of the Regional Information Technology & e-Commerce Committee (RITECC) who through sheer dint of foresight and determination, placed our city in quite unfamiliar position : at the head of the pack in ICT development in Mindanao! In the call center industry alone, Cagayan de Oro is expected to (pardon the comparison to the stock market) breach the psychological threshold of 1,000 seats this month!
But without detracting from this laudable accomplishment which truly deserves our accolades and more, I believe we should tread lightly at this stage lest we provide political ammunition for the advocacy of those in the United States and other wealthy G-7 countries to begin clamping down on outsourcing in a not dissimilar manner with which the US recently launched legal and other initiatives to curb the growing tidal wave of foreign immigration to their shores.
Already, Philstar columnist Boo Chanco cites an Economist magazine report that nine out of 10 Americans are worried about the impact of outsourcing jobs to countries like India and the Philippines.
Yet, in reality, Chanco said the Economist reports, "the number of American service jobs that have shifted offshore is small, some one million at the most. And most of those demand few skills, such as operating telephones." But since nine out 10 Americans worry about it, that fear may be enough to hold down the wages of college graduates in service industries.
The impact is starting to hit the U.S. middle class. People with college experience, but no degree, fared worse than high-school dropouts. Some figures suggest that the annual income of Americans with a college degree has fallen vis a vis high-school graduates for the first time in decades. So, where the 80s were hardest on the least skilled, the 90s and this decade have hit people in the middle.
This probably explains why recent economic data have given rise to so much uncertainty. It is difficult to see or feel if Americans today are more optimistic or more pessimistic about their future. Determining their mindset is important if we are to predict the direction of the consumer driven American economy - everything from interest rates to the strength or weakness of the American dollar.
That's why I believe business outsourcing will soon eclipse immigration in the list of economic issues which disturb Americans the most. On the other hand, it opens a new avenue in our country where workers can find relatively good paying jobs, with minimal costs to society and the environment.
CSLA Asia-Pacific Markets, provider of brokerage and investment banking services in the region, estimates the total annual disposable income from all call center agents in the country would increase four-fold to P18 billion this year from only P4.2 billion in 2003.
Although the BPO sector now accounts for only 10 percent of the total amount of dollars remitted by overseas Filipino workers annually, the National Economic and Development Authority (NEDA) is optimistic foreign exchange earnings from the BPO sector would eventually replace earnings from OFWs.
Sen. Pia Cayetano, who chairs the Senate committee on natural resources and environment, said investing in human skills, rather than altering natural resources through mining, should be the focus of the government's economic policies. A shining example of this thrust is the economic benefits of the BPO-contact center (CC) sector.
Industry insiders estimate another 300 call centers would come into the country in the next two years, because of the coparative advantages the Philippines has over other Asian countries, in terms of personalized customer service, impeccable work ethics, language, diction, and robust communication infrastructure.
The government targets 500,000 professionals working in the BPO and call center sector by 2010. To support this, the industry, academe and the government are implementing short-term solutions and long-term measures to address concerns of shortages in qualified manpower.
The business process outsourcing (BPO) sector is expected to grow 100 percent both in terms of revenues and employment this year as more call center firms shift and expand into more value-added lines with easier staffing requirements.
There are now over 100,000 seats in the industry but Borja said it's difficult to track how many seats have been allocated for BPO services and purely call center services since most call centers are now also expanding into BPO services.
With the advent of new low-cost technology, the 100,000 jobs in the BPO-CC sector is projected to grow 90 percent over the next three years, expanding the business by $10 billion. The IT industry is also looking up with IT spending to reach $ 1.56 billion this year or 10 percent higher than last year, largely driven by BPO services.
Rainerio Borja, chairman of Business Process Association of the Philippines (BPAP) and director of Call Center Association of the Philippines (CCAP), said growth in the BPO sector would surpass the maturing call center sector, whose growth is expected to taper to 70 percent this year.
Borja said call center operators have realized the benefits of shifting to BPOs because of time zone differentials with the US and Europe where operating hours are not optimized.
BPOs also offer greater employment opportunities especially for whose oral communication skills don't match the inflection and local idiom demanded by many call center clients. These include captioning, transcription and X-ray diagnostic services.
BPOs also have better acceptance rates compared to the below par 3-5 percent take up rates of call centers, often due to similar industry standards with the US whose accounting is similar to the Philippines.
I just hope and pray that the BPO boom would not boomerang on us since many Pinoys now make up the middle class work force in the US and Europe.
It would be the supreme irony to have our kababayans come back home because their high-earning positions overseas have been outsourced to the land where they couldn't find a job in the first place, and to where they would soon returning as empty handed as when they first left.
INDNJC -
I tip my hat to the dedicated men and women of the Regional Information Technology & e-Commerce Committee (RITECC) who through sheer dint of foresight and determination, placed our city in quite unfamiliar position : at the head of the pack in ICT development in Mindanao! In the call center industry alone, Cagayan de Oro is expected to (pardon the comparison to the stock market) breach the psychological threshold of 1,000 seats this month!
But without detracting from this laudable accomplishment which truly deserves our accolades and more, I believe we should tread lightly at this stage lest we provide political ammunition for the advocacy of those in the United States and other wealthy G-7 countries to begin clamping down on outsourcing in a not dissimilar manner with which the US recently launched legal and other initiatives to curb the growing tidal wave of foreign immigration to their shores.
Already, Philstar columnist Boo Chanco cites an Economist magazine report that nine out of 10 Americans are worried about the impact of outsourcing jobs to countries like India and the Philippines.
Yet, in reality, Chanco said the Economist reports, "the number of American service jobs that have shifted offshore is small, some one million at the most. And most of those demand few skills, such as operating telephones." But since nine out 10 Americans worry about it, that fear may be enough to hold down the wages of college graduates in service industries.
The impact is starting to hit the U.S. middle class. People with college experience, but no degree, fared worse than high-school dropouts. Some figures suggest that the annual income of Americans with a college degree has fallen vis a vis high-school graduates for the first time in decades. So, where the 80s were hardest on the least skilled, the 90s and this decade have hit people in the middle.
This probably explains why recent economic data have given rise to so much uncertainty. It is difficult to see or feel if Americans today are more optimistic or more pessimistic about their future. Determining their mindset is important if we are to predict the direction of the consumer driven American economy - everything from interest rates to the strength or weakness of the American dollar.
That's why I believe business outsourcing will soon eclipse immigration in the list of economic issues which disturb Americans the most. On the other hand, it opens a new avenue in our country where workers can find relatively good paying jobs, with minimal costs to society and the environment.
CSLA Asia-Pacific Markets, provider of brokerage and investment banking services in the region, estimates the total annual disposable income from all call center agents in the country would increase four-fold to P18 billion this year from only P4.2 billion in 2003.
Although the BPO sector now accounts for only 10 percent of the total amount of dollars remitted by overseas Filipino workers annually, the National Economic and Development Authority (NEDA) is optimistic foreign exchange earnings from the BPO sector would eventually replace earnings from OFWs.
Sen. Pia Cayetano, who chairs the Senate committee on natural resources and environment, said investing in human skills, rather than altering natural resources through mining, should be the focus of the government's economic policies. A shining example of this thrust is the economic benefits of the BPO-contact center (CC) sector.
Industry insiders estimate another 300 call centers would come into the country in the next two years, because of the coparative advantages the Philippines has over other Asian countries, in terms of personalized customer service, impeccable work ethics, language, diction, and robust communication infrastructure.
The government targets 500,000 professionals working in the BPO and call center sector by 2010. To support this, the industry, academe and the government are implementing short-term solutions and long-term measures to address concerns of shortages in qualified manpower.
The business process outsourcing (BPO) sector is expected to grow 100 percent both in terms of revenues and employment this year as more call center firms shift and expand into more value-added lines with easier staffing requirements.
There are now over 100,000 seats in the industry but Borja said it's difficult to track how many seats have been allocated for BPO services and purely call center services since most call centers are now also expanding into BPO services.
With the advent of new low-cost technology, the 100,000 jobs in the BPO-CC sector is projected to grow 90 percent over the next three years, expanding the business by $10 billion. The IT industry is also looking up with IT spending to reach $ 1.56 billion this year or 10 percent higher than last year, largely driven by BPO services.
Rainerio Borja, chairman of Business Process Association of the Philippines (BPAP) and director of Call Center Association of the Philippines (CCAP), said growth in the BPO sector would surpass the maturing call center sector, whose growth is expected to taper to 70 percent this year.
Borja said call center operators have realized the benefits of shifting to BPOs because of time zone differentials with the US and Europe where operating hours are not optimized.
BPOs also offer greater employment opportunities especially for whose oral communication skills don't match the inflection and local idiom demanded by many call center clients. These include captioning, transcription and X-ray diagnostic services.
BPOs also have better acceptance rates compared to the below par 3-5 percent take up rates of call centers, often due to similar industry standards with the US whose accounting is similar to the Philippines.
I just hope and pray that the BPO boom would not boomerang on us since many Pinoys now make up the middle class work force in the US and Europe.
It would be the supreme irony to have our kababayans come back home because their high-earning positions overseas have been outsourced to the land where they couldn't find a job in the first place, and to where they would soon returning as empty handed as when they first left.
INDNJC -
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