Local BPOs aim for growth as US Senate rejects anti-outsourcing bill

The local business process outsourcing industry is eyeing continued growth after the US Senate rejected an anti-outsourcing bill. “Outsourcing is a win-win proposition, and we’re glad to see that both Philippine and American companies and our respective workers will continue to benefit from the opportunities it provides,” Benedict Hernandez, Business Processing Association of the Philippines president and chief executive, said on Monday. The US bill, if passed, would have eliminated tax breaks for American companies  outsourcing core and non-core businesses and manufacturing jobs to other countries. It would also provide a 20-percent tax deduction on costs associated with closing outsourced operations and transferring jobs to the US. The bill failed to muster the minimum number of 60 votes required to end a Republican-led filibuster and bring it to a final vote. The vote was 56-42. Hernandez said numerous studies have shown that outsourcing has little impact on job losses; instead, outsourcing can free up resources to create more jobs at home. “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. “Outsourcing business services to the Philippines helps make American companies more competitive and profitable,” he added. “Profitable companies hire more workers, both here and in the United States." In an earlier study, Slaughter had found that American jobs created by subsidiaries of foreign multinationals almost doubled over a generation, employing 5.4 million US workers, almost 5 percent of private-sector employment, and paid them 31 percent more than American competitors. In 2011, the Philippines’ 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. — BM/VS, GMA News