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By Darwin G. Amojelar, Reporter
A POLL of companies in the business process
outsourcing industry and related sectors revealed that further
increases in the value of the peso against the dollar could lessen
the Philippines’ competitiveness and cut back firms’ expansion
plans.
The survey, conducted by Outsource2Philippines
(O2P) in partnership with the Business Processing Association of the
Philippines (BPAP), showed that 51 percent of the companies believed
their competitive advantage will be severely impacted at an exchange
rate below P37 per dollar.
Twenty percent of the respondent companies said
that an exchange rate in the range of P39 to P42 for every greenback
would be the break point, while 13 percent indicted this point would
be at P37 to P38.
The remaining 16 percent of companies failed to
indicate a rate.
The survey was conducted from February 4 to 20
this year, with 62 respondents out of the 276 polled, for a
22.5-percent response rate. Response rate was representative of the
industry, including contact centers, BPO providers, software and
transcription service firms, engineering services firms, and service
providers to these sectors.
The survey also showed that 66 percent, or a
total of 46 companies, said a stronger peso has resulted in a
slowdown of expansion, ranging from temporary shelving to
significantly scaling back.
“A significant minority of respondent
companies [18 percent] have relocated their operations to lower-cost
locations in the country and a small number [5 percent] have moved
operations from the Philippines to other countries,” the survey
said.
The survey added that respondents’ reactions
to the peso’s appreciation have been focused on the reduction of
overhead costs and higher billing rates.
“There has also been some moderation of salary
and benefit increases. A number of companies focused on increasing
operational efficiencies and increasing productivity of their staff
to counteract the negative impact of the peso’s rise,” the
survey said.
The survey said 61 percent of the respondents
said they were reducing overhead costs (71 percent of the larger
companies), 33 percent were moderating salary and benefit increases,
and 38 percent have increased billing rates to their clients.
The survey, however, said that overall 60
percent of the respondent companies indicated that there was no
impact or some impact related to the increase in value of the peso.
Nineteen percent indicated moderate impact, and 21 percent said that
there was significant or very significant impact.
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