Originally posted by the Voice of America.
Voice of America content is produced by the Voice of America,
a United States federal government-sponsored entity, and is in
the public domain.


Trump, 'Trump East' Unnerve Philippine Outsourcing Firms

by Reuters

   MANILA, PHILIPPINES --

   When Philippines President Rodrigo Duterte, the man dubbed "Trump of
   the East," told U.S. businesses to pack their bags if they didn't like
   his anti-American rhetoric, the huge and growing outsourcing industry
   got a little nervous.

   It's now the real Donald Trump who has businesses worried here, after
   the U.S. president-elect vowed to bring offshored jobs home from places
   such as the Philippines, a big provider of back-office services for
   corporate America.

   The Southeast Asian country accounts for 12.6 percent of the global
   market for business-process outsourcing (BPO), which has been growing
   10 percent a year for the past decade, according to the IT & Business
   Process Association of the Philippines.

   The industry body predicts the BPO industry could be adding 100,000
   jobs annually, earning revenues of $38.9 billion, by 2022, although
   global outsourcing consultants believe that could even reach $48
   billion within four years.

   Three-quarters of the $23 billion sector services U.S. firms.

   "It's a U.S.-centric business," said Manuel Pangilinan, president of
   PLDT, which provides telecoms for the sector. "To the extent that Trump
   compels, persuades or incentivizes the BPO businesses to return ... it
   will impact our business or the industry as a whole.

   "It's going to be a tough one, not only for us, but for the economy as
   a whole," he added.

   Trump tweets

   In a string of tweets Sunday, Trump threatened "retribution or
   consequences" for companies that moved operations out of the country,
   as well as a 35 percent tariff on their goods sold back to the United
   States.

   That could leave the Philippines exposed, with companies such as
   Citibank, JPMorgan, Verizon, Convergys, Genpact and Sutherland Global
   Services key to jobs that were forecast to increase to 1.8 million
   full-time Filipinos by 2022.

   It's not just companies in the Philippines that are worried.

   Anticipating a more protectionist U.S. technology visa program under a
   Trump administration, India's $150 billion IT services sector will
   speed up acquisitions in the United States, industry sources there say.

   Companies also plan to recruit more heavily from college campuses,
   expecting the Trump administration to tighten up on temporary visas for
   India's high-tech workers.

   Some firms rattled

   Philippine businesses and BPO firms that spoke to Reuters said some
   trade delegations had deferred visits and potential foreign investors
   in the industry were taking longer with their due-diligence procedures.

   And they were doing so even before Trump won the U.S. presidential
   election on November 9.

   Duterte's volatility has drawn comparisons to Trump and his hostility
   toward Manila's longtime ally the United States has shocked investors
   and even his own cabinet.

   He told President Barack Obama to "go to hell" over the U.S.
   president's concern about Duterte's war on drugs, threatened to scrap
   U.S.-Philippines defense pacts, and in October announced before China's
   political elite his "separation" from the United States.

   FILE - Call center agents work overnight daily to cater to U.S. clients
   in Manila's Makati financial district, Feb. 6, 2012.

   That remark rattled some U.S. firms, said Juan Victor Hernandez, an
   IBPAP trustee, who told Reuters that four companies put their decisions
   on hold immediately. He declined to name them.

   Hernandez said uncertainties over Trump's policies affected potential
   investors rather than existing ones, such as JPMorgan, which is staying
   put.

   "So far, they are still hell-bent on the Philippines, number one," he
   added.

   Duterte defiant

   Philip Goldberg, who until recently was the U.S. ambassador in Manila,
   said he took more calls from investors in his last three months than
   during his whole tenure. All were about Duterte's anti-American
   vitriol.

   "They are very nervous," Goldberg told news channel ANC. "They don't
   know what it means."

   While aware of those concerns about him, Duterte was defiant: "Go
   ahead. Pack your bags," he told reporters before flying to Japan in
   October. "We will sacrifice. We will recover."

   Julius Guevara, head of research at Colliers Philippines, said while
   U.S. investors were concerned about Duterte and Trump, firms already in
   the Philippines were unlikely to leave.

   "If it's more profitable for them to continue having operations here in
   the Philippines, I don't think Trump can do anything about it," he
   said.

   Charito Plaza, an ally of the president and director general of the
   Philippine Economic Zone Authority, said Duterte would ask Trump to be
   kind to U.S. firms looking at the Philippines.

   But it wasn't clear whether Duterte did that when the two spoke last
   Friday. Duterte said he felt a rapport with Trump and "assured him of
   our ties."

   But the only policy issue Duterte mentioned afterward was his drug
   crackdown, which he said Trump understood.

   Challenge of automation

   Policymakers have been banking on BPO overtaking remittances as the
   mainstay of one of the world's fastest-growing economies.

   The BPO sector's recent growth plan said it wasn't Trump or Duterte
   that posed the biggest challenge to the industry but automation.

   The plan aims to boost mid- to high-skilled labor from 53 percent of
   the workforce to 73 percent by 2022 to meet that challenge. That would
   push annual incomes from $19,100 to $21,600 with jobs that diversify
   beyond voice services and focus on higher-value IT support.

   The economic planning minister, Ernesto Pernia, told Reuters he was
   optimistic the Philippines' competitive costs and services would
   insulate its BPO sector from Trump, and the BPO jobs that Filipinos do
   might not appeal to Americans.

   Duterte's talk shouldn't be taken too seriously, either, Pernia said.

   "I think investors should listen to the economic planners and not the
   president," he said.