More college grads needed for stronger BPO growth – solon
ONLY two out of every 100 Filipinos inside the prime employable age bracket of 20 to 34 is a college graduate, House Deputy Majority Leader Roman Romulo bared over the weekend.
“We have to churn out more college graduates at a faster rate in the years ahead,” Romulo said, citing the need to aggressively develop the country’s human resources to stay highly competitive in the labor-intensive outsourcing market.
“Our college-educated English-speaking labor force is our biggest advantage. We have to work very hard on this asset if we want to capture a bigger chunk of the global outsourcing market, estimated to be worth some $280 billion by 2017,” Romulo said.
Citing Commission on Higher Education figures, Romulo said the country’s college graduates increased by only 2.9 percent to 481,862 in 2010, and comprised just two percent of those inside the best employable age range of 20 to 34.
Romulo is a key backer of the business process outsourcing (BPO) industry and author of a bill seeking to enable the country to produce more college graduates via a bold new student loan program.
Under the program, an eligible student may obtain a low-cost bank loan to pay for the tuition of the college where the borrower has been accepted. The money may also be used to pay for miscellaneous school fees, books, food, transportation, and other necessities.
The loan would have an effective interest rate pegged to the benchmark 91-day Treasury bill rate, which last stood at 0.05 percent (one-half of one-tenth of one percent).
The bank may apply an add-on 3.0 to 5.0 percent annual interest rate. However, instead of the borrower paying for the extra interest expense, the bank may claim the corresponding amount as tax credits. The lender may then use the credits to pay for or offset its tax obligations.
Meanwhile, Romulo acknowledged the strengthening peso poses “some risk” multinational BPO firms might be driven to branch out to other locations outside the Philippines.
“The risk of a rising peso is somewhat being heightened by the fact that the currency of our chief competitor in the global BPO market, India, is doing the opposite and falling against the dollar,” Romulo said.
Like exporters, the Philippine operations of multinational BPO firms earn dollars, but spend for their operations here, such as the wages of their staff, in pesos.
A stronger local currency means BPO firms receive fewer pesos to spend here for every dollar they earn, just like overseas Filipino workers.
The peso advanced by 6.21 percent against the dollar in 2012. The peso-dollar rate stood at 41.19:1.00 at the end of 2012 versus 43.92:1.00 at the close of 2011.
Regardless of the peso-dollar rate, Romulo said the Philippines should reinforce its core competitiveness by producing more college graduates, building up public infrastructure, sustaining tax incentives, lessening red tape, and enabling foreign investors to easily do business here.
The country’s BPO and information technology-enabled services industry encompasses contact center services; back offices; medical, legal and other data transcription; animation; software development; engineering design; and digital content.
The industry is projected to generate $27 billion in revenues and fully employ some 1.3 million Filipinos by 2016.