• Philippines: The new call center capital of the world

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    BECAUSE of their excellent communication skills and because they possess a good command of English, Filipino workers are considered very good business processing outsource (BPO) assets for the Philippines.

    Recently, Transcom Philippines declared the Philippines as the “Call Center Capital of the World.”

    According to Transcom Country Manager Sive Subramaniam, the country has overtaken India as top destination hub for the call center industry.

    In a statement from the Associated Chamber of Commerce and Industry in India, the Philippines was cited for having a good supply of workers to fill job vacancies in call center companies.

    The Information Technology-Business Processing Association of the Philippines (iBPAP) said that Filipinos are excellent in communication and possess a good command of English that is the reasons why country is attracting more investors to put their call center hubs here.

    Also, another factor is that the Philippines has excellent training facilities, good support from the government and is exerting efforts to improve infrastructure programs to better provide investors with even more reasons to do business in the country and expand whenever necessary.

    “The Philippines is now No.1 in the world when it comes to providing voice services, which make up most of the BPO industry,” said Genny Marcial, external affairs executive director of IT-BPAP.

    Although the country is No.1 in the voice sector, the top provider of technical support is still India because of its cheaper labor.

    BPO companies remain optimistic that with the country being the new call center capital of the world, Filipino workers will continue to be hardworking and globally competitive.

    Peso against rupee
    Early this year, the strengthening Philippine peso eroded the cost competitiveness of the Philippine IT-BPO industry, according to the Business Processing Association of the Philippines (BPAP).

    Citing analysis by Everest Group and Outsource2Philippines, former BPAP president and chief executive officer Benedict Hernandez said the combination of an appreciating peso and a depreciating Indian rupee provided India with a meaningful cost advantage.

    Hernandez is concurrently serves as president of Contact Center Association of the Philippines (CCAP). He was replace by Jose Mari Mercado as the new president and chief executive officer of BPAP.

    “With the 30 percent difference in peso and Indian rupee exchange rate with the US dollar, the cost differential has substantially widened,” Hernandez said. “And that is much more difficult to manage.”

    Association of Southeast Asian Nations has become a preferred destination for global portfolio investors as a result of sustained weakness in developed economies.

    Investment inflows resulted in increased demand for these currencies, including the Philippine peso, creating strong upward pressure on their value. Some economists expect a near-term correction in the value of the peso, citing the high price to earnings ratio (P/E ratio) of approximately 17, following months of record-setting gains on the Philippine Stock Exchange.

    A BPAP member survey conducted in January 2013 on the impact of the strengthening peso revealed that 46.7 percent of respondent executives say it has been difficult to hit revenue targets. Respondents also said that they have lost some business to other destinations (40 percent) or cancelled expansion plans (40 percent).

    Quality of service and productivity
    BPAP said that while cost is an important factor for clients outsourcing work to the Philippines, the Philippine IT-BPO industry has traditionally competed for business on the basis of quality of service and productivity.

    “Quality of service and productivity continue to be at the core of our value proposition. But our industry must also be able to operate within acceptable market prices. That’s becoming increasingly difficult as the peso continues to appreciate.”

    Acknowledging that government has limited options to deal with the appreciating peso, Hernandez nevertheless said that, “We have enjoyed strong support by and collaboration with government and its agencies, including the Bangko Sentral ng Pilipinas.

    “As in the past, we are confident that government will work with us in this area to maintain competitiveness of our IT-BPO industry.” He also said that the industry is taking steps to address the issue.

    Ideal location
    In March this year, Talent2, the leading HR BPO organization in Asia Pacific, expanded on its extensive experience in the Philippines by opening a new, 500-seat, state-of-the-art Shared Service Centre (SSC) that will be the central hub for its Asia Pacific operations.

    “Our experience in the Philippines reinforced that this was the ideal location from which to support our growth and our clients’ growth in the region,” said John Rawlinson, group chief executive officer, Talent2.

    The new center in Manila cements Talent2 as the leading HR BPO provider, establishing a core center in Asia Pacific for Asia Pacific clients.

    The SSC provides next generation facilities to allow the top talent working in the new center to deliver exceptional service and support to local and global clients.

    The center reinforces Talent2’s ongoing development of innovative, market leading HR BPO technology and service delivery, as well as supporting its expansion and focus on the fast-growing Asia Pacific region.

    The center will immediately deliver quality service and support for Talent2’s clients due to the maturity of the workforce.

    Talent2 has a wide range of clients in the Asia Pacific region, from small-scale businesses through to global banks and leading telecommunications organizations.

    The SSC acts as a central hub for all of Talent2’s Asia Pacific operations, allowing the organization to boost front- and back-end service levels for clients in recruitment, learning, HR and payroll.

    “The large number of highly educated professionals with unique cross-cultural knowledge is one of the Philippines’ strengths, and we believe this talent will play a critical role 1as we look to build on our number one standing in the Asia Pacific region,” Rawlinson

    BPAP forecasts 2012 IT-BPO industry revenues of $13 billion and employment of 772,000 full-time knowledge workers.

    In 2013, it expects to generate $16 billion and employ 926,000. By 2016, the industry forecasts $25 billion in revenues and 1.3 million employees.

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