Sluggish US economy may see US banks shedding another 150,000 jobs this year
Likely to accelerate transfer of more support jobs to lower-cost locations such as the Philippines
A FRESH wave of downsizing at large US financial holding companies is expected to benefit Manila’s booming business process outsourcing (BPO) sector, a member of Congress said over the weekend.
“American banks will likely accelerate the transfer of more back-office and business support jobs to lower-cost locations such as the Philippines in the months ahead,” said Pasig City representative Roman Romulo (pic).
“It appears they are still under a lot of pressure to slash costs to stay profitable. Amid a sluggish US economy, there are estimates American banks may shed another 150,000 jobs this year,” Romulo said.
Romulo’s remarks came shortly after Bank America Corp (BA), the second-largest US financial holding company with global assets of US$2.2 trillion, bared plans to shed another 16,000 US jobs by year’s end.
The job cuts would see Charlotte, North Carolina-based BA giving up its title as the US banking industry’s largest employer.
Founded in 1904, BA operates in more than 40 countries and has over 282,000 employees, mostly in the United States.
Like its three biggest rivals — JPMorgan Chase & Co, Citigroup Inc and Wells Fargo & Co — BA already has a global in-house center (GIC) in Manila that provides a wide range of non-core, business support activities.
Taguig City-based BA Continuum Philippines Inc “provides back-office operations and transactions, customer support and service functions, technology support and services, general human resource functions, business planning and general financial services.”
Meanwhile, Romulo cited the rise of two new IT parks in his congressional district of Pasig City, which he said would provide the extra infrastructure and connectivity required to buttress the BPO sector’s solid growth.
BPO firms are the primary locators in tax-sheltered IT parks registered with the Philippine Economic Zone Authority.
The PSMT IT Building and Reliance IT Center in Pasig are among the 22 new IT parks being developed throughout the National Capital Region, according to Romulo, also vice chairman of the House information and communications technology committee.
He named the 20 other emerging IT parks in Metro Manila as follows:
Quezon City has eight: Aurora Tower, EDSA Grand Residences, Gateway Tower, Harvester Corporate Center, Manila COD IT Building, NUVO CITY, Sunnymede IT Center and V-Tech Tower.
Mandaluyong City has four: Filinvest EDSA, SM Megamall IT Center, Starmall EDSA-Shaw and The Facilities Center.
Makati City has three: Cash and Carry Mall, Libran House IT Center and Zuellig Building.
Muntinlupa City has two: Metropolis Star and Paragon Corporate Center.
The cities of San Juan, Pasay, and Paranaque have one each: Connecticut Arcade, Metropolitan Technological Complex and Aseana One.
Romulo is author of the Data Privacy Act of 2012, which is expected to further encourage global corporations to either establish new GICs in Manila, or relegate their business support activities to independent BPO firms operating here.
Republic Act 10173 puts the country’s personal data protection at par with global standards. It mandates all entities, including GICs and BPO firms, to safeguard the confidentiality of personal information collected from clients.
The country’s IT-enabled services industry includes contact centers; back offices; medical, legal and other data transcription; animation; software development; engineering design; and digital content.
The industry is projected to produce up to US$27 billion in revenues and directly engage some 1.3 million Filipino workers by 2016.
This year, the Business Processing Association of the Philippines sees the industry generating US$13 billion in revenues on a labor force of 764,000. – Newsbytes.ph
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