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RP outsourcers: ‘Cautious optimism’

By PAlexander Villafania,
First Posted 16:09:00 12/02/2008
MANDALUYONG CITY, Philippines – Philippine-based outsourcing giants are now feeling effects of the US recession with some companies seeing a slowdown in demand for services, particularly on medical transcription and animation, industry executives said.

But some are reporting a surge in demand in contact center services, back office operations, software development and gaming.

Nevertheless, the local outsourcing firms are approaching 2009 with "cautious optimism," according to Philippine Software Industry Association (PSIA) President Beng Coronel.

Animation Council of the Philippines (ACPI) President Grace Dimaranan said some of their projects, which are mostly animation series, were postponed or on hold amid the US recession.

Similarly, Medical Transcription Industry Association of the Philippines (MTIAPI) President Myla Reyes said some of their services, mostly serving the US market, have slowed down.

The Philippine outsourcing industry is composed of contact center operators, business process outsourcing, animation, game development and transcription.

The Philippine outsourcing industry is expecting a 35 percent overall growth that is worth $12 billion to $13 billion by 2010.

But given the US recession, Business Process Association of the Philippines (BPAP) CEO Oscar Sañez said they might adjust these targets but assured that growth would remain in the double digits.

"We are not distracted by the US recession. Indeed there will be some effects but the recession situation is also an opportunity. With companies trying to streamline their operations outsourcing is a viable and cost effective solution," Sañez said.

There are, however, concerns on US President-elect Barack Obama's pronouncement to provide tax cuts for companies who will keep operations in the US.

Still, Philippine outsourcers are not threatened by Obama's statements, saying there are no details yet as to how these tax cuts will be implemented.

Philippine contact centers, who are servicing mostly US clients, are still optimistic.

Contact Center Association of the Philippines (CCAP) Benedict Hernandez said tax cuts will not deter US companies from outsourcing if the need arises.

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