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Marawi City siege dampens BPO boom

The Business Process Outsourcing (BPO) industry said enabling conditions in the country make it a competitive destination for outsourcing services but the prolonged conflict in Marawi City between state forces and Filipino militants supporting the Islamic State (IS) is causing concerns.

The Information Technology and Business Process Association of the Philippines (IBPAP) said the Marawi crisis has put the brakes on the $10 billion outsourcing industry, one of its key growth drivers.

IBPAP Board of Trustees chairman Lito Tayag, however, said the IT-BPO sector continues to thrive in the country with the enabling conditions here such as the availability of talents, infrastructure ecosystem, and stable regulation and statutory requirements.

Tayag said these enabling conditions should be sustained by the stakeholders, which are the government, private sector, and the academe, to maintain the country’s competitiveness as outsourcing hub and to continue attracting investments and create jobs.

“As we move along, regardless whatever happens along the way, it is imperative for us to maintain these enabling conditions and ensure that they are there,” he said.

“Therefore, it is also important for us to continue to collaborate with all the sector stakeholders and our government in particular, in order for us to maintain these, in order for us to achieve and realize these aspirations for growth in the next six years,” he added.

IBPAP president Rey Untal mentioned that security concerns in the country, particularly in Mindanao, are contributing to the headwinds that the IT-BPO sector is currently dealing with.

Untal added the group hopes that these concerns will be addressed by government and that martial law in Mindanao be lifted soon.

Meanwhile, the IBPAP and the Contact Center Association of the Philippines (CCAP) will be holding the 9th International IT-BPM Summit on Nov. 7 at the Makati Shangri-La.

With the theme “PH DNA: Human Tech”, the conference aims to give insights on the future of jobs in the IT-BPO sector as the industry moves toward artificial intelligence.

More than 900 people have been killed in the city of Marawi, where pro-IS militants have defied a months-long US-backed military campaign to flush them out, while the southern third of the country has been placed under martial law to contain the violence.

Although the lucrative outsourcing industry is largely based in the northern and central regions, the bloody conflict has unnerved many potential investors, said officials of the Information Technology and Business Process Association of the Philippines (IBPAP).

“In the early part of the year, we had a lot of ‘wait-and-see’ attitude for the most part,” said Untal.

Approved investments in the information technology services sector, which includes the outsourcing industry, fell 31.3 percent from a year earlier in the three months to June, government data show.

“There is an element of (wait and see) still,” Untal told reporters, though there were now signs that new players were coming in.

The outsourcing industry includes call centres and offices that carry out such functions for overseas companies like accounting, medical and legal transcription, software design, animation and even architecture.

It has become a major pillar of growth of the Philippine economy, bringing in $23 billion in revenues last year and employing 1.15 million people according to industry officials.

When the Marawi violence broke out in May, the industry was bracing for the fallout of the protectionist threats issued by US President Donald Trump, who has vowed to bring back jobs outsourced abroad, Untal said.

“Then suddenly we had to deal with that (Marawi) also. In every conversation I had, that figured in,” said Untal.

Industry leaders had to assure investors that work would continue with “business as usual,” despite the fighting, he said.

Industry leaders also obtained government assurances that its employees would be exempt from martial law curfews in the south, IBPAP vice-chairwoman Cathy Ileto said.

Untal said that while the outsourcing industry employs almost 50,000 people in the southern Philippines, no one worked in Marawi or nearby areas.

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