Call center group studies dollar depreciation impact
By Lawrence Casiraya
INQUIRER.net
First Posted 13:02:00 05/14/2008
Filed Under: Economy, Business & Finance
MANILA, Philippines -- The Call Center Association of the Philippines (CCAP) is doing its own study on the impact of the dollar depreciation -- an indication that the dollar decline has now become a serious industry concern.
CCAP has created a "special concerns" committee to study the issue, according to Raffy David, who is a member of CCAP's new board of directors elected last week.
"The committee will set out to study the issue and paint a realistic picture of what we can do as a group to cushion the impact on the industry," David said in an interview with INQUIRER.net.
"Our goal is not to improve the exchange rate back to the P50 level, but find out what we can do as a group or find a collaborative solution," he stressed.
By David's estimates, the dollar has declined by as much as 26 percent. A number of call center operators have reported negative impact on Philippine revenues due to the decline.
"Not too many companies are making more than 26 percent in profit margins," said David, adding that on the average, call centers that are "being run properly" should be making anywhere between 26 and 32 percent profit margins.
CCAP is composed of 34 member-companies, including major global players like Convergys, People Support and e-Telecare. To become a member, an operator must have a capacity of 50 seats or more.
Call centers that are smaller or are newly established may even be making less, David said.
"If companies are not able to curtail expenses or improve margins by way of renegotiating for better contracts or pushing better performance, some of the members could be just breaking even or barely making money at all," he said.
A recent third-party survey of top executives in the overall business process outsourcing (BPO) industry noted that the Philippines will lose its competitive advantages if the dollar declines further to $37 to the peso.
"The issue is something that needs to be looked into by all CCAP members," said David.
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