The historic US credit downgrade is unlikely to impact heavily on local investments, according to President Aquino. He also said that the value of investments in this country will not change with what is transpiring in America and if it’s profitable to do business here, it will remain to be profitable.
Noynoy, in turn, was immediately in the news supposedly “scrambling” his economic officials to prepare for the impact of the credit downgrade. S&P’s downgrade, while unprecedented, has been a long time in coming. The US economy appears to have yet to rise from the 2007 financial turmoil and its consequent effect of a global crisis that hit most of the big European economies. But the worried question is how does this affect the outsourcing industry of the country?
For an industry where the peso-dollar exchange rate plays a huge role, business process outsourcing (BPO) players will definitely see the effect of the US downgrade. Western companies may be a little bit more cautious when it comes to spending due to the current global economic situation. Since the US is the largest market of the Philippines business process outsourcing industry, this downgrade will surely be felt in one way or the other. However, the industry remains confident and optimistic and growth is still projected in the next few years.
For one of the poorest economies in the region, the Philippines’ strength remains in its labor force, something that Noynoy, like his predecessor, had failed to recognize in terms of policies to stimulate employment. It had taken the recognition of other countries for Filipinos to find dignity in work, be it on commercial sea vessels of the world that are manned mostly by Filipinos to business process outsource (BPO) businesses that mostly now value Filipino skills over any other nationalities.