US bill on BPOs won’t prosper, say biz leaders

Posted on January 9, 2012

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There should be one group not tied to the national government that should lobby against the passage of House Bill 3596 or “Call Center and Consumers Protection Bill” in the US Congress.

Joel Mari Yu, Cebu Investments and Promotions Center managing director and outsourcing specialist of Cebu, said this amid a call from Congress to the Aquino administration to lobby against the bill pushed by US President Barack Obama.

Yu made the proposal even as top Cebu business leaders questioned whether the bill will be passed since it will be disadvantageous to US firms that outsource their operations due to lower production costs.

“In my own opinion, I don’t think these companies will just agree right away and not fight back. I’m sure mosukol jun ni sila (they will fight this) and all we need to do is just let them know that we have their backs. We’ll support them,” Yu said.

Yu said outsourcing is practical and a product of market forces that have raised the bar for global competition.
Without outsourcing, Yu said some companies cannot stay competitive and may eventually shut down.

“Like Citibank, which is competing with HSBC (Hong Kong Shanghai Banking Corp.) and other companies, which are outsourcing. It’s good if Citibank is only competing with other American banks hiring American labors,” he said.

If these companies cannot stay competitive and shut down, Yu said this will only result to more job losses to the Americans.

Yu said the Department of Labor and Employment (DOLE) should take the lead in the campaign against the US bill.

“What we can do and should do now is sit down with these companies and talk to them on how we can support them. What they need for us to do to fight this,” he said.

Yu admitted that the US bill will not only affect call centers but may also impact on higher-skilled outsourced jobs in the Knowledge Process Outsourcing (KPO) and Information Technology Outsourcing (ITO) sectors.

Yu said based on the Call Center Directory, there are 500 American companies with outsourcing operations in the country with Cebu having 75 call center and VOIP (Voice-Over Internet Protocol) companies.

Jerry Rapes, Information Communication Technology (ICT) committee chairperson of the Cebu Chamber of Commerce and Industry, said more than half a million people are employed in outsourcing companies in the country.

Majority of them work in call centers and in Cebu, the number of people working in outsourcing companies is pegged at 60,000.

Rapes said at present, the BPO sector is a fast-growing industry that earned P9 billion in 2010.

“This year the target is P11 billion. By 2016, we shall be going at the level of the OFW (overseas Filipino workers) remittances of $25 billion. With that huge potential for revenue, the industry should be given due recognition,” he said.

Even if the US House bill is still pending Jun Sa-a, Cebu Educational Development for Information Technology Foundation (CEDF-IT) executive director, said this should serve as a challenge to the Cebu BPO sector to remain competitive.

“As long as we continue to deliver the right quality and cost, we will continue to be a preferred location,” Sa-a said. Gordon Allan Joseph, Cebu Business Club president, agreed.

“We therefore need to act and to act now to evolve the quality of our education to allow training of students and graduates in the competencies needed to evolve our BPO industry into sophisticated knowledge process outsourcing,” said Joseph.

Mandaue Chamber of Commerce and Industry president Eric Ng Mendoza is optimistic that the bill will not be passed into law.

But if passed, it may cause a temporary slowdown in the BPO sector.

“It’s a lot more expensive to operate call centers in the US and they cannot afford not to be competitive; otherwise, they will lose and close shop,” Mendoza said.
Cebu City Mayor Michael Rama said if the bill is approved, it will hurt the local BPO industry.

He said he will write President Benigno Aquino III to support a plan to create a lobby group that would lobby against passage of the bill.

He said the City Council should pass a resolution for the same purpose.

Vice Mayor Joy Augustus Young said he will still consult with the council on the issue.

Young said the national government to determine who will be part of the lobby group.

He said it will be wise if the government coordinates with the BPO firms instead of sending their own lobby group.

At the Capitol, Provincial Board (PB) Members Arleigh Sitoy and Rimobapil Holganza said they will sponsor a resolution calling on Congress to lobby against the passage of the US bill.

Cebu Vice Gov. Agnes Magpale said the bill may affect 50,000 BPO employees, a lot of whom came from neighboring towns to work in Metro Cebu.

Cebu Gov. Gwendolyn Garcia said the bill should serve as a challenge to the BPO sector.

“We should believe that the Filipino has the talent and the industry to meet all challenges head on and continue our quest for excellence especially in the BPO industry, bill or no bill. Barack or no Barack,” she said. Aileen Garcia-Yap, Reporter with Chief of Reporters Doris C. Bongcac and Correspondent Carmel Loise Matus

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