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CALL CENTER INVESTMENTS

:
Spurring Economic Growth and Social Development

Raffy David and Cesar Tolentino 19 August 2005

INCREASES EMPLOYMENT
NUMBER OF AGENTS (in '000)

Generates approximately 30,000 new jobs per year (agents and call center personnel). This trend is projected to continue in the next 2 to 3 years

100 90 80 70 60 50 40 30 20 10 0

92.0

60.0

4.8

8.0

14.0

19.5

2000 2001 2002 2003E2004F2005F

YEAR
E – Estimate; F – Forecast Source: XMG Asia-Pacific, 2004

ELEVATES PROFESSIONAL COMPETENCE OF FILIPINO WORKERS
Call center jobs provide exposure to quality-intensive training, new work management methods, results-driven team/group-work environments, and international customer interaction experiences

IMPROVES THE RECOGNITION OF THE PHILIPPINES IN THE GLOBAL ECONOMY
Allows the Philippines to establish a name as a premiere offshore destination for outsourced professional services (which
includes other BPO services aside from call centers).

OPPORTUNITY TO DEVELOP A STRONG COUNTRY BRAND NAME IMAGE
As a premiere offshore destination for outsourced professional and business services, the Philippines can develop a strong brand name image in the concept of “Philippines, Inc.”

GENERATES NEW SOURCES OF INTERNAL REVENUE
The entry of new locators (who would otherwise have not located in the Philippines) provides the Philippine government with access to new sources of internal revenue in the form of:
1. New corporate taxpayers in terms of the locators themselves 2. More personal income tax payers with higher income levels

New Corporate Taxpayers
Each new call center locator has the potential to generate $3Million in Revenues per year (assuming 200 active seats), corresponding to
$0.15Million in VAT revenues (net of credits) $0.15Million in Corporate Income Tax revenues (if there is no Income Tax Holiday or if the ITH has expired)
$0.15M in VAT $0.15M in Income Taxes

$3 Million in Revenues

Or $0.30Million in total Internal Revenues per new call center per year

More Affluent Taxpayers
Each new call center locator, on the average, can employ as many as 300 agents (assuming 200 active seats), with the capacity to generate
$0.015Million more in personal income tax revenues per year
Agents pay an additional P500 per month

Most entrylevel staff pay P1,200 of Gross Salary to taxes per month

LOCAL INDUSTRIES ELEVATE THEIR COMPETITIVENESS TO WORLD-CLASS LEVELS
The need to provide world-class services pressures local companies to elevate their service quality to globally competitive levels, ex.: those engaged in
Real estate development, Engineering services, IT services, Food service provisioning, Healthcare services, Manpower services, Training services, and Accounting and financial services

LOCAL GOVERNMENTS AND COMMUNITY LEADERS BECOME MORE BUSINESSCENTERED AND SERVICE-ORIENTED

Call centers’ ability to offer employment to large numbers of constituents enamor them to local governments and local community leaders. This sentiment compels these leaders to adopt mindsets and orientations that are more responsive to business needs – further attracting more investments into the sector.

CATALYZES SME GROWTH AND SOCIAL DEVELOPMENT

The huge requirements of call centers for auxiliary services (public transport, safety and security, healthcare services, food service provisioning, among others) offer opportunities for:
Business growth among SMEs providing such auxiliary services, and In turn, offer greater employment opportunities among expanding SMEs.

BUSINESS GROWTH AMONG SMEs
It is estimated that for every $1 in revenue generated by a call center, approximately
$0.15 goes to domestic consumption of products and services ($0.45Million additional domestic consumption per call center per year), $0.05 of this consumption is served by SMEs, generating approximately $0.15Million in incremental GDP per year per call center.
Other Domestic Spending ($0.15)

Domestic Spending to SMEs ($0.05)

Other Uses ($0.80)

GREATER EMPLOYMENT OPPORTUNITIES AMONG SMEs

The additional $0.15Million incremental GDP per year per call center from SME revenues drives employment growth in terms of
SMEs employing more personnel to serve the additional consumption demand, and Support businesses (banks, transportation, utilities, government services), requiring more personnel to support SME growth.

GREATER EMPLOYMENT OPPORTUNITIES AMONG SMEs

Every call center agent employed is estimated to generate an average of two new hires among the SME sector.

SUMMARY OF CALL CENTER BENEFITS
Increases Employment Elevates Professional Competence of the ordinary Filipino worker to world-class level Improves the recognition of the Philippines in the world market Creates an opportunity to create a strong brand name for the Country Local companies elevate their competitiveness to world-class levels Catalyzes SME growth Greater Employment opportunities among SMEs

THANK YOU

CCAP