For more than a decade, business process outsourcing (BPO) has been the goose laying the golden eggs for the Philippines. Now the fairy tale is threatened by three things: the arrival of Chinese online gambling firms, a government programme that stops new call centres being built in Manila, and the rapid improvement of artificial intelligence (AI).
Twenty-five years ago, BPO was a tiny mote in the economy – now, it’s a multibillion-dollar industry. Jonathan Ravelas, the chief market strategist at BDO Unibank, the largest bank, estimates BPO earnings at about 10 per cent of gross domestic product – close to the US$26 billion sent home yearly by overseas Filipino workers (OFWs). This makes it the second-largest earner of US dollars in the country. In its 2015 annual report, the Philippine Statistics Authority said the income came mainly from the United States, Netherlands, Australia, Britain, and Canada.
Although most of the BPO sector’s activity involves call centres, outsourced jobs also include computer programming, medical transcription and animation, and cartoon production.
Reveals pointed out to This Week In Asia that unlike OFWs, BPO agents can work for foreign companies without having to go abroad – and families can remain intact because opportunities are available at home.
But those employees are now seeing unexpected competition: a deluge of tens of thousands of Chinese flown in to staff online gambling companies catering to China. Gambling is illegal on the Chinese mainland, so the companies – collectively called Philippines offshore gaming operators, or Pogos – nest their online casinos in Manila. A few Filipinos, usually women dressed in low-cut clothing to entice gamers via video to join, work in Pogos, but the vast majority of employees are from mainland China.