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RP BPO facing incentives challenges

by: Carlo Abadilla

Thursday, January 21, 2010 |

Business Mirror reports that the Philippine outsourcing industry is going to have to step up its incentives game if it is going to contend with emerging offshoring/outsourcing destinations. A global study by PricewaterhouseCoopers shows that governments of rival outsourcing destinations are already integrating policies and aggressive programs to attract a bigger share of outsourcing investments.

Board of Investments (BOI) managing head, Elmer Hernandez says current laws limit the incentives that the Philippines can offer to outsourcing buyers:

“We can only provide incentives in terms of what is provided in the law. As for the other support, the National Competitiveness Council is working on streamlining business requirements and government red tape.”

Outsourcing destinations like China, Eastern Europe, and Latin America have reportedly already integrated government policies and support programs to supplement their respective IT services sectors.

The Philippines offers income-tax holidays, duty-free importation of capital equipment, and a lower 5 percent tax on gross revenues. It currently has an incentives-rationalization bill pending in Congress.

PWC chairman, Judith Lopez, states that investors are looking for relaxed regulations, cheap labor and low rent in addition to tax breaks. Lopez believes that government support “will definitely tilt the balance on which countries will become the preferred outsourcing destinations”.




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