‘Outsourcing to rise 42%, is way forward’

OUTSOURCING is the way forward for the Philippines, and employment, revenues and investments from the sector are expected to rise by at least 42 percent this year, Socioeconomic Planning Secretary Romulo Neri said Monday.

Neri amplified the remarks made last week by Neda’s director for policy planning, Dennis Arroyo, who spoke to answer an Asian Development Bank exhortation that the Arroyo administration should not rely solely on OFW remittances to keep the country’s economy afloat.

Call centers are now at the forefront, Neri said. But other big-business process outsourcing firms are expanding their operations beyond call centers, Neri said in a statement.

He cited a study jointly sponsored by the trade department’s Board of Investments and the industry groups’ Business Process Association of the Philippines, and the Commission on Information, Communication and Technology that forecast outsourcing jobs rising by 44 percent this year over the 2005 figure.

Outsourcing revenues and investments will grow

The study also projected out­sourcing revenues growing by 52 percent, and investments surging by 42 percent in 2006, Neri said.

He said the study forecasts that investments would be around P12 billion ($234.83 million) this year and that by 2010 up to 1.2 million people would be employed in the sector, increasing from 233,000 people employed at present.

“Outsourcing is a sector with much dynamism. Companies are also getting more creative to respond to industry demand. For example, some firms are buying warehouses for lack of office space,” Neri said.

He cited industry estimates that business process outsour­cing will bring $3.8 billion in revenues to the Philippines this year, close to four times higher than the 2001 figure of $1 billion.

In 2001 Philippine revenues from business process outsourcing amounted to $349 million, Neri said.

Global consultancy McKinsey has reported that at least 120 outsourcing companies operate in the Philippines, predicting that revenues from the sector would reach $10 billion by 2010, he said.

Market for medical transcription

Neri said the Philippines should aim to get 10 percent of the market for medical transcription, which comes amid a massive exodus of Filipino doctors, nurses and other medical workers for higher-paying jobs abroad.

“Think of all the high-paying jobs that will provide our medical professionals,” Neri said, citing reports that the United States lacks about 80,000 medical transcriptionists.

Medical transcription outsourcing in the Philippines occupies just a one-percent share of the US market of $12 billion, he added.

Neri said the outsourcing boom should also be a boon for other industries.

“This is clearly a market for the telecom companies offering landline connectivity. Real estate is also benefiting from the surging demand for office space, while restaurants open 24 hours a day to cater to the food and leisure needs of call-center agents,” he added.
--The Manila Times staff and AFP