• By quade
• 4 September 2024

Trump Presidency Means Trouble for Philippine BPO Industry

Many members of the Philippine BPO industry are raising concerns, saying the Philippines will be among the most vulnerable Southeast Asia under a Trump presidency. This is due to his protectionist policies that will affect remittances, exports, and, outsourcing services.

Experts and investors believe that if Trump wins the election, the Philippine BPO industry will grow by 0.2% less. This could be the beginning of a serious issue that will carry on for the coming years.

Philippine BPO Industry Vs. Trump’s Policies

Among the experts discussing this issue, the Japanese Investment Bank projects that the BPOs in the country will grow by 6.1%. But if Trump wins the election, the market will only grow by 5.9%

Trump has made his economic policies very clear with his intent of bringing back jobs to America. This includes many policies that can negatively affect Philippine workers such as restricting immigration which can affect remittances. 

This can affect the Philippine BPO Industry, a critical source of dollars for the national economy. Among his policies also include restricting the use of outsourcing to allow local employees to get jobs which will affect how many contracts the Philippines gets from the US.

Lastly, Trump plans on enacting 10% tariffs to deal with inflation. This can affect the Philippines by forcing the Bank Sentral ng Pilipinas to change its financial plans, forcing BPOs to also adjust their strategy. In turn, these tariffs will also affect Philippine exports.

How Will Southeast Asia Be Affected By Trump’s Policies?

The Philippines isn’t the only country that will be affected by the economic policies of Donald Trump. Due to the close trading relations between the US and the Philippines and their heavy use of the Philippine BPO industry, they will be the most badly affected.

Alongside them, Singapore is also heavily exposed as many of their businesses have close ties with the US. They will be just as badly affected as the Philippines.

In contrast, countries will weaker relations with the US like Indonesia and Thailand are less affected as they are somewhat isolated from the economy. Meanwhile, Malaysia which has almost no trading deals with the US will not be affected and may even see some benefits as their neighbors struggle. 

“Singapore and the Philippines are most exposed to Trump policies while Malaysia could gain some indirect benefits. Indonesia and Thailand are insulated but not completely. We believe the impact of Trump 2.0 will be negative for the region from a growth perspective, albeit to varying degrees.”

-Nomura

How Can the Philippine BPO Industry Learn From This?

Although Kamala Hariss is now expected to win the election, it is still important for the Philippine BPO industry to be prepared. There are several steps they can take to ensure that the damage of a Trump presidency is minimized.

The important thing is diversification for both clients and investors. With the US not being as reliable a partner as it normally is, finding other investors to place their money in the industry is critical. The same is true with clients if outsourcing is reduced in the US, then it’s important to begin approaching clients outside of the United States now.

It is also critical now for the Philippine BPO industry to tighten its belts and prepare for lean times as the inflation and exchange rate may be affected and affect the spending power of the BPOs. Lastly, it’s important to observe the success of Malaysia and see how they managed to the worst of it.