Growing Insecurity Deals Another Blow to BPO In The Philippines

The Philippine BPO industry is once again in turmoil, with several countries issuing travel warnings amid widening street battles between government forces and militants linked to the Islamic State (ISIS) in the country’s southern city of Marawi.

In a its warning to citizens, the U.S. embassy says it has credible information that terrorist groups may attempt to conduct kidnappings in Central Visayas, which includes both Bohol and Cebu provinces.

Cebu has more than 120,000 BPO workers, with Tholons describing Cebu City as one of the best seven outsourcing destinations in the world.

The looming threat of insecurity has caused jitters among foreign outsourcing firms with significant operations in the Southeast Asian country. The BPO industry is the second-largest source of income for the Philippines, employing 1.2 million people and generating $22 billion in annual revenue.

American firms account for nearly 70% of the outsourced jobs handled by Filipinos, with Teleperformance, Qualfon, and Convergys being major players.

For the Philippine sourcing industry, the travel warnings come just as it had successfully calmed the tension caused by the country’s president Rodrigo Duterte, who in October last year threatened to cut ties with the U.S. in exchange for a cozy relationship with China.

Philippines call centers have been in decline, with reports last year that several trade delegations deferred visits to the country, with dozens of potential foreign investors attempting to buy more time to wrap up deals.

Investment pledges registered with the Philippine Economic Zone Authority (PEZA) also fell 26% in 2016.