Too early to speculate on the future of American BPOs in the Philippines: Malacañang

This comes amid public concerns that American BPO companies might pull out in the country following threats of ‘retribution’ by U.S. President-elect Donald Trump.

By Adrian M. Reodique
Dec. 16, 2016

The Malacañang Palace on Monday (12 December 2016) said it is too early to speculate on the future of American business process outsourcing (BPO) companies in the Philippines. This is response to public concerns that they might pull out in the country following threats of 'retribution' by U.S. President-elect Donald Trump.

In a report by The Wall Street Journal, Trump said during his speech on 1 December 2016 at Carrier plant in Indianapolis that "companies are not going to leave the United States anymore without consequences."

On 4 December 2016, Trump said in a series of tweets that "the U.S. is going to substantially reduce taxes and regulations on businesses, but any business that leaves our country for another country, fires its employees, builds a new factory or plant in the other country, and then thinks it will sell its products back into the U.S. without retribution or consequence, is WRONG! There will be a tax on our soon to be strong border of 35 percent for these companies wanting to sell their product, cars, A.C. units etc., back across the border. This tax will make leaving financially difficult, but these companies are able to move between all 50 states, with no tax or tariff being charged. Please be forewarned prior to making a very expensive mistake! THE UNITED STATES IS OPEN FOR BUSINESS."

However, Presidential Communications Office (PCO) Secretary Martin Andanar said Trump's statement is "not a policy set in stone."

"We cannot speculate on the future of American BPOs in the Philippines until President-elect Trump takes his oath of office and spells out his policies," Andanar explained in a report by the Philippine News Agency.

Andanar also cited that incumbent President Barack Obama had similarly appealed to American BPOs to return their operations in the U.S. but it "fell on deaf ears."

In line, he noted that BPO companies stay in the Philippines because it is more cost efficient. "They would have less operating expenses. In the U.S., workers are paid per hour. In the Philippines, workers are paid per day."

Besides that, Andanar underscored the shift in the types of work in the BPO sector in the country. "It is expected that the sector will cater to more complicated requirements as the industry plans to climb the value chain from the traditional voice and IT services to animation, game development and healthcare information. We hope we can capitalise on this, where the Philippines has a competitive advantage."

"It is for this reason that the Duterte Administration included in its 10-Point Agenda; one, investment in human capital development, including match skills and training, and two, promotion of science, technology and the creative arts to enhance innovation and creative capacity," he added.