MANILA Philippines - The Business Processing Association of the Philippines (BPAP) on Monday welcomed the US Senate's rejection of the anti-outsourcing bill that could hobble the local BPO industry.
In a statement, the BPAP said it welcomed the US Senate's move as the bill, if passed, would have eliminated tax breaks for companies outsourcing services and manufacturing jobs to other countries.
This would also mean that the the US government could entice companies by giving a 20-percent tax deduction on costs associated with closing outsourced operations and transferring jobs to the US.
Orrin Hatch, R-Utah, had said that there is no tax break for outsourcing, saying that the “Bring Jobs Home Act” is devoid "of serious content because it is of political rather than economic priorities.”
US Senators vited 56-42, in favor of junking the Republican-led bill, which required 60 votes for it to be enacted into a law.
“Outsourcing business services to the Philippines helps make American companies more competitive and profitable. Profitable companies hire more workers, both here, and in the United States,” said Benedict Hernandez, BPAP president and chief executive.
Studies have shown that outsourcing has little impact on job losses and it can even free up resources to create more jobs at home.
BPAP cited Dartmouth’s Tuck School of Business economist Matthew Slaughter's study of hiring practices of 2,500 US multinationals, which found that for every job outsourced, nearly two new jobs are created in the US.
Slaughter's earlier study had shown American jobs created by subsidiaries of foreign multinationals almost doubled over a generation, employing 5.4 million US workers. This is almost 5 percent of private-sector employment and paid them 31 percent more than American competitors.
“Outsourcing is a win-win proposition, and we’re glad to see that both Philippine and American companies and our respective workers will continue to benefit from the opportunities it provides,” Hernandez said.
In 2011, the Philippines’ IT-BPO industry generated more than $11 billion in revenue and employed almost 640,000 Filipinos. The industry roadmap projects that by 2016, it would to grow to $25 billion in annual revenue and employ 1.3 million.
