The Philippine off-shoring and outsourcing sector stands to benefit from the US economic slump, as tough times push American firms to look for ways to cut operating expenses, local executives said Thursday.

In a forum conducted by the Business Processing Association of the Philippines and Outsource2Philippines Inc., ICT Group Asia-Pacific President Karen Batungbacal said the global economic crisis itself is actually providing the local firms offering off-shoring and outsourcing services opportunities for further growth. She cited expectations that many firms in developed countries would curb production and labor costs and would likely turn to off-shoring and outsourcing.

Rainerio Borja, PeopleSupport Philippines president, said the country is well-positioned to attract investments in off-shoring and outsourcing.

He warned, though, that demand for those services at this time could slow down initially, as prospective investors first focus on “firefighting,” or dealing with their business crises, before doing anything else.

“But many opportunities are still out there,” Borja said, adding that, for instance, PeopleSupport would be meeting with potential investors a few weeks from now.

According to the association’s chief executive officer, Oscar Sañez, the US remains the local off-shoring and outsourcing sector’s biggest market, despite the current financial crisis on Wall Street.

Sañez noted that back-office services for US-based companies posted tremendous growth, attracting the most investments in the last six to nine months.

Many financial services, such as credit-card processing and financial reporting, and human-resources and engineering firms have been also been setting up offshore sites in the country, he said.

Japan and Middle-Eastern countries are also outsourcing animation work and game development, Sañez added.

Business process outsourcing still has the largest piece of the off-shoring and outsourcing pie, as voice and nonvoice services compose around 80 percent of the industry, he said. Information technology outsourcing, Sañez added, is growing with its 10-percent to 12-percent share of the sector.

He said he is confident that there would be no slowing down in the off-shoring and outsourcing. The business process out­sourcing (BPO) sector, according to him, is likely to hit its full-year projected revenue target of $6.8 billion.

The Business Processing Association of the Philippines and government representatives are set to meet with potential investors in the US, Europe and Australia in the last remaining months of this year, Sañez said.

“The Philippines remains a very appealing BPO location among emerging markets,” he said, citing such companies’ cost-efficiency measures and the competitive Filipino workforce among factors that draw in out­sourcing investments to the country.

Source: Ben Arnold O. De Vera