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Higher Incentives Needed to Attract BPO Locators

by: Sarah Joson

Friday, March 16, 2012 | Outsourcing News |

Increasing the Peso incentive was cited by outsourcing organizations in the Philippines as the solution to attract more business process outsourcing (BPO) locators to set up operations in the country. This is due to the fact that costs of doing business in the Philippines are higher compared to other outsourcing locations.

Furthermore, Department of Science and Technology-Information and Communications Technology Office’s (DOST-ICTO) Deputy Executive Director Alejandro Melchor III said the country is equipped with talented candidates, but prices of real estate and power remain high. He added that in other outsourcing destinations, costs of electricity are lower and real estate is usually provided free of charge to BPO locators.  

Melchor noted during a conference with Business Processing Association of the Philippines (BPA/P) members that if the low incentive rate at 5% will be further reduced, it will affect the country’s position as an ideal outsourcing destination. He added that BPO locators are more inclined to put up operations in Tier 2 and Tier 3 countries.

On the local employment side, it is expected that 400,000 to 800,000 jobs will be added by the BPO sector in the next five years.

The BPA/P Next Wave Cities (NWCs) Report (2010-2011) shows vast opportunities for the sector in New Wave Cities. Davao, Sta. Rosa, Bacolod, Iloilo, Metro Cavite, Lipa, Cagayan de Oro, Malolos, Baguio, and Dumaguete are the top 10 NWC in 2010-2011.


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