The next U.S. president and Business Process Outsourcing and why we should care

American jobs have been pouring into the Philippines via Call Centers. With the election coming up, Filipinos should wonder if the next American President will allow this to continue. After all, its not just call center jobs that we have received.


BPO is an important issue for anyone investing in the Philippines. Its growth will carry some industries with it but if it weakens, it can pull others down as well.


Democrat position
Obama and Clinton claim to be opposed to outsourcing of American jobs. They both advocate the removal of tax cuts favoring companies that ship their jobs overseas.

Republican Position
Mccain's position on the matter is not as clear. Blogoshere opinion places him supporting outsourcing.

Importance of Business Process Outsourcing (BPO)
BPO, best known by the call center industry brought many new jobs and strengthened supporting industries. The real estate industry is one to have benefited. Call Center Companies are providing demand for office space and the employees are providing demand for residential space. Megaworld (MEG) for instance, is riding the wave and is reaping happy rewards by providing much needed office space to the BPO industry players. Beyond real estate, the list will go on and include even transportation and information and communications technology.

Peso and Dollar spending power
BPO places dollar revenues in the hands of the Philippine companies and more peso income in the hands of the employees. Relatively, the salaries of BPO workers are high. This is a significant contribution to the flourishing domestic demand.

Beyond Call Centers
BPO includes outsourcing of Human Resource Functions. An example of this would be IBM. A few years back, IBM took over P&G's human resource department and began outsourcing the hr work of P&G and other firms.
Accounting is also another popularly outsourced function. Companies like citibank perform accounting and related activities for foreign clients.

BPO in its Infancy
There is so much more ground to cover in this industry and tremendous growth potential. Legal and Medical transcription is another area where the Philippines can become a major player. However, we still need privacy laws to be in place before we can gain a major share of the U.S. and E.U. market.