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US Leadership change impacts PH outsourcing

Posted on December 1, 2016

Due to the upcoming leadership change in the United States, the possibility of having changes in trade and investment policies of the country must be considered.

This event will have a great impact in the Philippines especially for the overseas Filipino workers (OFWs) and the business process outsourcing (BPO) industry.

The next president might consider onshoring or the repatriation of jobs at overseas-based suppliers back to the US.

Since others claim that the job losses in the US is caused by the trade openness of the US, changes in domestic production is also possible.

On November 8, the US will elect its new president. Running for the president position are Hillary Clinton and Donald Trump.

On the issue of illegal immigrants, Trump vows to send illegal immigrants home and enforce immigration laws strictly. Hillary aims to naturalize eligible immigrants.

However, on the issue of outsourcing which has been deemed as a cause for the damage of the US economy, both candidates promised to get tough on companies who send jobs abroad.

Philippines and India are among the top outsourcing destinations in the world due to the large English-speaking population and cheap labor costs. Evidently, these countries will be the most affected if the US will have higher taxes or have tighter rules on outsourcing.

In the Philippines, the BPO industry employed 1 million and had brought $22 billion in revenues last year. During the same duration, OFWs US remittances were nearly $8 billion out of the $26 billion total remittances.

Since the government has no power to change the US policies, the government is preparing for any shock that the leadership change may cause.

The preparation includes training people beyond the BPO industry such as in manufacturing and tourism industries, and enticing investors to invest in the Philippines.

According to Bangko Sentral ng Pilipinas (BSP) Governor Diwa Guinigundo, policy changes like those would just do more harm than good for the US economy.



US elections bring risks for overseas workers, call centers; CNN Philippines