The Ripple Effect: BPO and the Philippine Economy

Back in 2000, business process outsourcing (BPO) was a jargon to many Filipinos. Call centers were only start-ups, and many investors were not comfortable about the idea of moving their business to the Philippines.  Today, BPO has become a global trend and the Philippines is in the spotlight. Major companies from larger economies are lining up in its shores, looking to find ways to reduce operational costs while remaining competitive. In fact, Department of Budget and Management Secretary Florencio Abad reported that the industry generated $13 billion in revenues in 2012 alone and is expected to grow at least 16% higher in 2013.

BPO is a powerful force currently driving the Philippine economy. It has created a ripple effect in many aspects:

• Export growth: Philippine merchandise exports increased by 7.6%, amounting to $51.99 billion.
• Employment generation: As of 2012, there are 493,000 Filipinos employed in the contact industry.
• Telecommunication sector growth: In spite of reduced telephony spending worldwide due to recession, telecom business in the Philippines grew by $8 million last year.
• Real estate growth: Because of BPO, there is greater demand for office spaces and buildings. At the same time, there is also a bigger middle-class market that demands for more subdivisions, townhouses, and residential condominiums.
• Rise of small businesses: The huge demand for food outlets in BPO offices and buildings, especially for 24/7 stores that cater to nightshifters, has encouraged the rise of fastfood outlets, restaurants, and convenience stores.
• Transportation growth: With the rising employment population, there is a huge demand for transport services, especially those that go beyond regular office hours.

Through BPO, the Philippines has been placed at the forefront of economic development. With continued government support, this industry can strengthen the country and carve its niche in the global society.

Image courtesy of: Biyahero Snapshots