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BPO sector to prop up foreign investments, says BSP
(The Manila Times Via Acquire Media NewsEdge) Mar. 28--The Bangko Sentral ng Pilipinas (BSP) said the continued expansion of the business process outsourcing (BPO) sector would support foreign direct investment (FDI) growth this year.
"BPO would be one good destination [this year]," BSP Deputy Governor Diwa Guinigundo said.
The BPO sector expects to hit $9 billion in revenues this year from $7 billion last year, according to the Business Process Association of the Philippines (BPAP). In 2010, BPAP expects revenues to reach $13 billion. It, however, admitted the industry is likely to miss its one million employment generation target given the 410,000 jobs created so far.
JP Morgan earlier said the BPO sector is expected to sustain its growth at 20 percent to 30 percent, driven by the country's competitive cost and expansion of captive firms. BPO firms that locate here enjoy cost savings of 75 percent to 80 percent compared with those in the US and the United Kingdom.
The investment bank said the slowdown in BPO jobs generation as against the robust revenue was largely due to the increase in average revenue per seat as the industry sold more high value-added services.
The BSP is reviewing its assumptions for the country's capital and financial account for this year.
Guinigundo earlier said that FDI would post flat growth this year amid the global economic slowdown.
FDI inflows fell by 47.9 percent to $1.520 billion in 2008 from $2.916 billion the year before, as investment decisions were stalled by foreign investors' concerns over the developments in financial markets, particularly in the weeks following the unfolding of the global financial crisis in September.
The major sources of equity capital flows last year were the US, Japan, Singapore, South Korea, Germany, Malaysia, Taiwan, Hong Kong, United Kingdom and the Netherlands.
Besides the BPO sector, Guinigundo said the BSP is also considering the stable exchange rate and sustained growth in the economy to support investment growth amid the global financial crisis.
To see more of The Manila Times, or to subscribe to the newspaper, go to http://www.manilatimes.net.
Copyright (c) 2009, The Manila Times, Philippines
Distributed by McClatchy-Tribune Information Services.
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