The business process outsourcing (BPO) companies of Cebu have overcome another major hurdle in the outsourcing industry. Investors, business partners, and other stakeholders in the city’s industry have heaved a sigh of relief upon confirming that a US anti-outsourcing bill has been dismissed.
The bill, which was proposed to the United States House of Congress, sought to discourage US-based companies from availing business process outsourcing services. Apparently, the bill came as a threat to the whole BPO industry of the Philippines, which has been one of the main drivers of the country’s economic growth.
The anti-outsourcing bill had been supported by US President Barack Obama; fortunately, it was not approved by the Senate, as it failed to come up with the required 60 votes. Fifty-six senators voted against the bill.
Had the bill been approved, it would have eliminated tax breaks for US businesses and companies outsourcing their services or manufacturing jobs to other countries. Also, the bill entitles a company to a 20 percent tax deduction upon closing outsourced operations and housing the jobs in the United States instead.
The United States of America refers to this anti-outsourcing bill as the Bring Jobs Home Act, which aims to provide an incentive for American businesses to bring jobs back to their country. Utah Senator Orrin Hatch pointed out that the bill “is devoid of serious content because it is of political rather than economic priorities.”
Cebu, which houses several leading BPO service providers in the country, has expressed its relief and continues to deliver business process outsourcing services. The managing director of CIPC (Cebu Investment Promotions Center), Joel Mari Yu, shares, “The decision is a relief to the industry, given the fact that it was a high-ranking official of the US who proposed it. At least we now have closure to any proposition to stop outsourcing.”
Yu said that it was “not surprising” for the bill to be junked since outsourcing, which greatly achieves the goal of cost-effectiveness for every business function, is vital for companies to uphold global competitiveness. He pointed out that BPO services are a means of “economic survival.”
Yu’s statement was supported by Jun Sa-a, the executive director of the Cebu Educational Development Foundation for Information Technology (CEDF-IT), saying that “outsourcing remains the logical decision in a global economy.”
It is worth noting that foreign investors and companies had remained interested in the business process outsourcing services in Cebu prior to reports confirming the bill’s provisional death. The Cebu outsourcing industry is left unscathed and thankful that the threat of the anti-outsourcing bill failed to materialize.