Tightening of US labor outsourcing rule risky for PHL, India – Moody’s

By , on February 8, 2017


Credit rater Moody’s Investors Service said business process outsourcing (BPO) sectors of the Philippines and India will be greatly disadvantaged if the US tightens rules on outsourcing. (Photo by TitanOne at English Wikipedia [CC BY-SA 3.0 (http://creativecommons.org/licenses/by-sa/3.0) or GFDL)
Credit rater Moody’s Investors Service said business process outsourcing (BPO) sectors of the Philippines and India will be greatly disadvantaged if the US tightens rules on outsourcing. (Photo by TitanOne at English Wikipedia [CC BY-SA 3.0)
MANILA—Credit rater Moody’s Investors Service said business process outsourcing (BPO) sectors of the Philippines and India will be greatly disadvantaged if the US tightens rules on outsourcing.

This, as US president Donald Trump vowed to bring back jobs in the US to further lift growth of the world’s largest economy.

Moody’s in its report: Asia Credit – 2017 Outlook Challenging Global Environment to Test Asia’s Robust Credit Fundamentals” issued Feb. 8 , 2017 said Trump’s trade policies was a turnaround from that of former US president Barack Obama’s moves.

It said the new policies “could pose downside risks to the US’ major trade and investment partners.”

“Such a policy shift, if implemented, could pose greater risks to high-value manufacturing exporters in the region, particularly Korea , Malaysia and Taiwan,” it said.

“India and the Philippines would be the most vulnerable if the US were to tighten rules on service Outsourcing,” it added.

The BPO industry is now among the solid fuel of Philippines’ domestic growth and is seen to surpass the contribution of remittances of Filipino workers overseas on gross domestic product (GDP), which is currently around 10 percent.

In 2015, the Information Technology and Business Process Management (IT-BPM) generated some 1.2 million direct jobs and registered revenues amounting to about USD22 billion.

On the other hand, remittances grew by four percent in 2015,the target growth of the central bank, with total cash remittances amounting to USD 25.61 billion.

As of end-November 2016, cash remittances reached USD 24.34 billion, 5.2 percent up year-on-year.