The Philippine BPO and Its Impact on the Economy - Wandering Pinoy

Wandering Pinoy

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Friday, July 4, 2014

The Philippine BPO and Its Impact on the Economy

I joined the BPO industry in 2010 and, more often than not, I hear negative remarks about the nature of our job. People look down on call center workers because they think we do not have a “real job.” Some even say that our life is dull and routinary: we go to work, take calls and go home and, then go to work, take calls and go home. Such remarks are painful – especially if such remarks are coming from people who are obviously unaware of how BPO impacts the Philippine economy.

BPO consumption 
The BPO industry is considered as the fastest growing industry in the Philippines. In 2005, the Board of Investments (BOI) estimated that there were 69, 000 call center seats “with 75, 000 employee industry-wide” in the Philippines. This contributed to 70 percent growth rate in call centers in that year alone compared to previous years. Seven years later, 700,000 were reported to be employed in BPO, making it “one of the chief economic drivers in the country.” By 2016, the Philippine BPO is estimated to employ 1.3 million and 3.2 million Filipinos in direct and indirect employment respectively according to the Information Technology and Business Association of the Philippines (ITBAP). These figures are quite staggering and this has a significant contribution as to why the Philippines is now called “The Call Center Capital of the World.” A survey by Tholons conducted in 2013 also identified the Philippines as the “leading call center destination beating out India.”

Economic Bearing
The BPO industry plays a vital role in curbing the unemployment rate in the Philippines. Contact centers have consistently contributed the highest percentage of employment in IT-BPO services according to a survey conducted by the National Statistics Office (NSO). From roughly 65,000 employed in 2004, the contact center employed approximately 330, 000 in 2010. Current figures reveal that the Philippines has approximately 900, 000 call center employees.

“The call center industry is considered as the fastest escalating employment provider for Filipino college graduates who seek jobs that have better income generation, “says Roy Jonathan del Rosario, author of Philippine Call Center Industry Soars High.

On top of generating jobs and direct employment, the BPO industry has also a significant contribution to real consumption which “pump primes” an economy. Here are some of the interesting facts about the BPO industry’s consumption cited by De La Salle University professor Dr. Alvin Culaba on the 2nd FGD on BPO Innovation and Competitiveness:

• “Php 232.7 billion in VAT contribution for food purchases
• Php 73.7 billion in housing rental
• Php 45.4 billion in public transportation and mobile communications costs
• Php 22.5 billion in clothing costs
• Php 80 billion in savings/investments
• Php110 billion in taxes that could go to cover public services equivalent to 300,000 classrooms and 3.2 million families receiving maximum Conditional Cash Transfer (CCT) for a year.”

Revenue generated from the BPO industry also drives the economy. According to ITBAP, revenue generated from BPO is estimated to reach $25 billion which will account for approximately 10 percent of our Gross Domestic Product (GDP). To date, the BPO industry ranked next to our OFWs’ remittances in terms of foreign exchange source.

BPOs also attract investors - both local and foreign. Megaworld Corporation, the Philippine builder controlled by Andrew Tan, for example, intends to invest at least $5 billion in the next ten years “to develop properties” for the continuously growing BPO industry. Jericho Go, first vice president of Megaworld, said, “The Philippines is among the most competitive destinations for BPO. There are many US and European companies who are seriously considering setting up here.”

Significantly important is the tax collected from the BPO industry. To quote from Roberto R. Romulo’s article The Economic Footprint of BPO Industry, “…this [tax] translates to $33-billion revenue through 2016, translating to four percent percentage points in market share, giving the Philippines a solid 10-percent global market share in the BPO space. This means an incremental three billion in taxes on wages – $1.2-billion tax on wages from direct employment and $1.8-billion taxes on wages on indirect employment.”

As previously stated, the BPO industry is estimated to generate 1.3 million jobs for Filipinos in 2016 via direct employment. For jobseekers who have thought of building their career in a BPO, this is definitely a good news but what’s in it for us who are currently working in this industry? I have thought of some considerable impacts of the BPO expansion to current call center employees; however, I have decided to highlight only one aspect here to, at least, save some space. Out of many, I have chosen “career advancement.”

The expected demand for new call center employees would require additional support staff like Coaches and Operation Managers to manage day-to-day operations. Such need is definitely a great advantage for team members who want to be promoted and establish a robust career in the BPO industry.

An Eye-opener
Working in a call center industry does not only require the ability to speak English fluently. It also requires courage, passion and dedication. If you do not possess these “special qualities,” I am afraid you will not stay long in this industry. Courage is needed to face and combat the stress (well, there is no such thing as “stress-free” workplace) and the physical and mental risks that may arise from constant exposure to irate or abusive customers and graveyard shift. In a study conducted by P. Bhuyar, Associate Professor at the Department of Community Medicine at Patil Medical College in India, “the working hours of call center workers may cause sleep disturbances and disturbances in biological rhythm. Physical health may also be adversely affected due to irregular and sedentary work hours.” Passion and dedication, on the other hand, work together and both drive performance and customer-engagement. When people developed love for what they do, work becomes more than a job -- it becomes a unique calling.

Ignorance of how the call center industry operates and how we impact the economy should not be a lame excuse to degrade our job or make fun of us. If, for some reasons, this ignorance cannot be cured, try to observe and “make sense” first before uttering rude remarks about us.

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  1. Did anyone ever wonder where that $3 Billion in tax contributed by the BPO industry are being appropriated to? (Just one of the so many questions that I want to ask..)

    In the spirit of fair journalism, I could say that the author made his points clear w/o prejudice. Moreover, the article, in my honest opinion; deserves a spot in one of our national newspaper publication.

    While I get that BPO industry has become the prime employment provider of the country, I wish that the author also included in his discussion how underemployment may or may not be true in this trade.

    Overall, the author deserves 5 Stars ★★★★★.

  2. Good article, Mr. Wandering Pinoy! Indeed, people say that we do not have careers in the call center. They look down on the fact that we do not hire based on a specific degree that would make them consider our jobs as something that would require specialized skills.
    What people fail to realize is because of the fact that we do not discriminate based on diploma and degree, we create corporate gateways for people who could not afford to finish college or to people who could not land a job in their chosen fields.
    The BPO industry is nothing but a GOd send industry to the Philippines.
    5stars to you indeed!

  3. Theresa Grace BenitezJuly 14, 2014 at 7:37 PM

    I like the part about how the writer describes how is it like to work on a call center - eye opener. Often times, we are belittled not knowing how difficult it is to work in our industry. Adding the pressure of pacifying an aggravated customer plus the pressure of maintaining your stats. If not with the BPO industry, more people nowadays will still be unemployed.

  4. Nice article I am proud to be part of the bpo industry since 2009


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