Carlo's Think Pieces

Reflections of a Filipino in the Netherlands

BPO contributes to national development

Posted by butalidnl on 6 January 2010

Some people have expressed the belief  that the BPO sector is not really contributing to national development of the Philippines; that it is just another way in which foreigners exploit Filipinos.

I think that those who take this view have a concept of national development, which for want of a better term, is “classical”.  By this, I mean that they hold that the Philippines should develop agriculture and industry as prerequisites to “real” development. And that factors as overseas work and BPO companies are distorting the economy, and will only bring about short-term benefits.

While I agree that the Philippines needs to develop its agriculture to the point of self-sufficiency, I believe that the country is not in a good position to develop all kinds of industry, particularly heavy industry. We should develop our biggest asset, which is our highly educated (by third world standards, that is) labor force.  And that in the future, our country’s main (export) products will be things of an “immaterial” nature – film making, education, design, music, etc. And in this list of our service exports we would include BPO services and other services which can be done at a distance with the use of modern ICT.

BPO companies employ many Filipinos. The salaries that the personnel receive, while certainly benefitting the worker,  also helps to stimulate the national economy.  This is the “multiplyer effect” – the salaries they earn are used to pay for food, rent, clothing, and other needs, which in turn generate employment for others, and so on..

Thus it is important, from this point of view, for BPO salaries to keep increasing, faster than inflation. The idea that our BPO industry is due to the low salaries of Philippine workers is only partly true. True, salaries need to be kept lower than that of the US, but beyond that, they could be raised quite a bit before they reach the US’ level.

Development of IT Infrastructure
Partially as a result of the proliferation of BPO companies, the country is pushing faster with the development of its IT infrastructure.  BPO companies want to base in more of the country’s cities, and high speed links are needed to make this happen.  And the prospect of getting BPO agents to even work from their homes, which will further increase the worker base, demands broadband connections within cities. Also, many IT experts are employed by the BPO industry, keeping them in the country instead of getting jobs abroad.

The present face of the BPO is call centers. But this will not remain this way in the future.  Already, BPO companies are offering non-voice services e.g. back-office functions, animation, software, etc. In a sense, the BPO industry is just taking off – telepresence in all its facets will lead to all kinds of services from more and more Filipinos. Think of radiologists analyzing CT and MRI scans of US patients, or architects helping in the design of buildings abroad. These things are already starting to happen, and there will be more and more fields that will be open to telepresence.

The nice thing about telepresence is that we are able to deliver services internationally, while staying at home.  At the same time, we will be collecting salaries that are high in terms of Philippine wage scales.  Thus, it will be like Overseas work, without having to go overseas.


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