Thought Leadership

Philippine – U.S. BPO Relationships Will Endure, Despite President Duterte’s Tough Talk

Nervous leaders of the Philippine business process outsourcing (BPO) industry requested a meeting with President Rodrigo Duterte to discuss his controversial announcement of a “separation” from the United States.

Duterte made the statement during a state visit to China in late October.

According to ABS-CBN News, officials from the Information Technology and Business Process Association of the Philippines (IBPAP) expressed their concern with Duterte’s combative rhetoric, worried about its effect on an industry that employs 1.2 million people and generates $22.9 billion annually—revenue delivered by mostly U.S.-based clients.

IBPAP “formally reached out to the Office of the President to secure an audience with him and directly discuss our industry’s (concerns) from government,” the group said in a statement.

However, Secretary Rodolfo Salalima of the Philippine Department of Information and Communication Technology was quick to reassure the industry that its IT and BPO client relationships would be protected by Duterte’s government.

“Contracts that have been enforced and still existing shall be respected and will continue in their full implementation,” Salalima said in an ABS-CBN News report.

Duterte later clarified his statement, explaining that he did not intend to sever ties with U.S., but only meant that he sought to strengthen his country’s relationship with China through a more independent foreign policy.

During a press conference in his home city of Davao, he told reporters, “It is not severance of ties. When you say severance of ties, you cut diplomatic relations. I cannot do that. It’s in the best interest of my countrymen to maintain that relationship (with the U.S.).”

Duterte’s change of tone bodes well for IBPAP, which is pursuing an aggressive goal of expanding the IT-BPO industry in the Philippines. The country, home to many English speakers who have neutral accents, is a top destination for outsourced contact center services. In a roadmap for the future presented at a recent IBPAP summit, the group believes industry revenues can grow to $38.9 billion by 2022.

IPBAP seeks to grow its share of the global BPO market from 12.6 percent today to 15.5 percent in 2022. At the summit, the group presented a strategy of expanding services outside the capital city of Manila and hiring highly educated workers, with the aim of growing outsourcing services unrelated to contact centers.

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