The global economic meltdown forced Asian outsourcing firms to rethink their investment and company strategies, as their respective government and financial institutions try to shield them from any adverse impact. Asian countries like the Philippines had all made the necessary precautions to help markets stay afloat in these uncertain times.

According to IMF Resident Representative Reza Baqir, “The Philippines is in a better position to face this crisis because of fiscal reforms undertaken by the government in 2005-2006. The impact on domestic financial markets of ongoing global financial stress would have been greater if these reforms had not been in place.”

Outsourcing is the Philippines largest market and revenue contributor, so the government’s support is crucial in the industry’s survival. Despite a possible slowdown in revenues following the US financial services turmoil, the local outsourcing industry is still on track in meeting its annual revenue growth target of over 30% to $12 to $13 billion by 2010 from just around $5 billion last year.

Business Processing Association of the Philippines (BPAP) CEO Oscar Sanez said “Despite the slowdown, there will still be growth though maybe not as fast as the annual 30-35% initially projected. Most growth can be expected from firms offering financial, engineering and software outsourcing services.”

Additionally, the US economic slump offers a window of opportunity for Philippine outsourcing providers as harsh times force US firms to look for ways to cut costs. “In a forum conducted by the Business Processing Association of the Philippines and Outsource2Philippines Inc., ICT Group Asia-Pacific President Karen Batungbacal said the global economic crisis itself is actually providing the local firms offering off-shoring and outsourcing services opportunities for further growth. She cited expectations that many firms in developed countries would curb production and labor costs and would likely turn to off-shoring and outsourcing,” reports the Manila Times.

PeopleSupport Philippines President Rainerio Borja believes the country is well-positioned to attract outsourcing investments, but warns that demand for outsourcing services at this time could slowdown initially as prospective investors are still focused on dealing with their business crises. BPAP CEO Oscar Sanez supports Borja’s statement while reiterating that the Business Processing Association of the Philippines along with the Philippine government are working hand-in-hand to attract more investors. In fact, BPAP and government representatives are set to meet with potential investors in the US, Europe, and Australia in the last quarter of this year. “The Philippines remains a very appealing BPO location among emerging markets”, says Sanez. The Philippines competitive workforce and outsourcing providers’ cost-efficiency measures are among the factors that encourage investments into the country.