A competitive peso is vital to grow the information technology-business process outsourcing industry, the Business Processing Association of the Philippines said Wednesday.
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Citing an analysis by Everest Group and Outsource2Philippines, BPAP president Benedict Hernandez said the impact of a strong peso and in the face of a depreciating Indian rupee has provided India a meaningful cost advantage.
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?With the 30-percent difference in peso and Indian rupee exchange rate with the US dollar, the cost differential has substantially widened,? Hernandez noted, saying the situation is "... much more difficult to manage.?
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In a statement, the industry group said the appreciation of the Philippine peso is eroding the cost competitiveness of the Philippine IT-BPO industry.
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While cost is an important factor for clients outsourcing work to the Philippines, the Philippine IT-BPO industry has traditionally competed for business on the basis of quality of service and productivity, BPAP noted.
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?Quality of service and productivity continue to be at the core of our value proposition. But our industry must also be able to operate within acceptable market prices. That?s becoming increasingly difficult as the peso continues to appreciate," said Hernandez.
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A recent survey of BPAP member companies on the impact of a strong peso showed that 46.7 percent of respondent executives said it has been difficult to hit revenue targets. Respondents also said they had lost some business to other destinations (40 percent) or canceled expansion plans (40 percent). ? VS, GMA News
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