MANILA – The strengthening of the peso may diminish the competitiveness of the Philippine brightest industry, business process outsourcing (BPO), Malaya Philippine daily reported Monday. Economists have warned this that especially that the rupee, the currency of its fiercest competitor India has been depreciating, providing cost competitiveness for BPO firms. While quality of service remains the Philippines' best asset, gap between the cost of India and the Philippines has become wide for every dollar. Raul Fabella, professor of economics at the University of the Philippines, said at the Competitive Currency Forum last Friday. Philippine BPO firms may not be able to hit its targets in the future as it gets squeezed by the appreciation of the peso. Indian rupee has devalued by 25 percent since July 2011 from 43.96 to 55.62 as of Aug. 16 and the trajectory is still downwards. Meanwhile, the local currency went down to below 42 in previous weeks before stabilizing to 42. Data from the Business Process Association of the Philippine as of 2010, the Philippines is currently among the most cost-competitive destinations for IT-BPO services. A survey done on the operating cost of IT/BPO firms in key locations worldwide shows operating cost India's capital Delhi was already cheaper than in Metro Manila in at least three areas of the business. BPAP said direct operating cost per full-time employee for English voice work – where we have edged out in India – as of 2010 was$15,000 to $16,000 per annum in Metro Manila compared with $14,000 to $15,000 in Delhi. But this is still cheaper compared with the cost in other locations which are competitive in the same work: Cairo, $16,000 to $17,000; Kuala Lumpur, $19,000 to $20,000; Krakow (Poland), $24,000 to $26,000; Mexico City, $29,000 to $32,000 and just 20 percent of the cost had it been done in a tier-2 city in the United States where the cost is $70,000 to $72,000. In non-voice BPO work such as finance and accounting, direct operating cost in Metro Manila is also second to the lowest among six key locations at $18,000 to $20,000 per employee per year. But Delhi's cost is still lower at $15,000 to $17,000. In information technology, cost in Metro Manila for applications development and maintenance, is also second to the lowest at $20,000 to $22,000 per employee per year. – Agencies
