BPOs welcome US Senate rejection of anti-outsourcing bill

Posted at 07/30/12 6:17 PM

MANILA, Philippines - The Philippine business process outsourcing industry breathed a sigh of relief as the US Senate rejected the so-called "Bring Jobs Home Act."

The bill, which would have elimated existing tax breaks for US firms that ship jobs to other countries, was blocked by Republicans at the US Senate. This despite President Barack Obama's earlier push for legislation that would encourage companies to bring back jobs to the US.

"Outsourcing business services to the Philippines helps make American companies more competitive and profitable. Profitable companies hire more workers, both here, and in the United States," Benedict Hernandez, Business Processing Association of the Philippines (BPAP)  president and CEO, said, in a statement.

BPAP cited a study showing that outsourcing does not have an impact on job losses in the US.

"Dartmouth’s Tuck School of Business economist Matthew Slaughter, in a study of the hiring practices of 2,500 US multinationals, found that for every job outsourced, nearly two new jobs are created in the US," Hernandez said.

As the US unemployment rate remains high and its economy continues to sputter, some sectors have blamed American companies for outsourcing jobs to countries like the Philippines.

Many American firms have outsourced call center services to the Philippines and India in recent years, since wages here are much lower than in the US.

However, Slaughter's study showed that American jobs created by subsidiaries of foreign multinationals almost doubled over a generation, employing 5.4 million US workers.

"Outsourcing is a win-win proposition, and we’re glad to see that both Philippine and American companies and our respective workers will continue to benefit from the opportunities it provides," Hernandez said.

The Philippines' IT-BPO industry generated more than $11 billion in revenue and employed almost 640,000 Filipinos in 2011. The industry is expected to grow to $25 billion in annual revenue and employ 1.3 million by 2016.