The Philippine peso-US Dollar exchange rate closed at P48.25: $1 last Monday, September 26, 2016. This is the lowest it has been in the last seven years. However Bangko Sentral ng Pilipinas not to worry since this has little effect on the BPO industry. In fact, the peso is more stable than ever.
According to Manita Times, Finance Undersecretary and concurrent Chief Economist Karl Kendrick Chua said the Philippine peso is expected to remain “broadly stable” over the medium term as it is propped up by solid macroeconomic fundamentals along with the steady stream of remittances from overseas Filipino workers (OFWs) and dollar receipts from the business process outsourcing (BPO) sector.
The BPO sector becomes more competitive when the currency is weak but benefits more from a more stable one since this is a big factor in choosing an outsourcing destination.
According to Malaya.com, in a press conference on the sidelines of the 11th International Contact Center Conference & Expo (ICCCE) at the Marriott Manila last September 28, Benedict Hernandez, chairman of the executive committee of the Information Technology Business Processing Association of the Philippines (IBPAP) said the BPO industry, being export-oriented, benefits from a weak peso in terms of cost.
However, there is only a slight weakening of the country’s currency that is it considered very much stable compared to the Philippines’ biggest outsourcing competitor: India. India’s Rupee is significantly weak at ₹66: $1 compared to the Philippines’ Php. 48:$1. This is the biggest advantage the Philippines has as it still continues to expand its BPO sector.
Financial experts are not overly worried about this change in the exchange rate and can confirm that business will remain as usual for the coming years in the Philippines.
Check out PhilStar’s article about the peso’s stability. Read it here.
Malaya.com also has an article about that. Check it out here.
Manilatimes.com also discusses this change in the power of the Philippine currency. Read it here.
BusinessWorldOnline.com has an article about the Peso. Read it here.