Sep

19

The financial storm in Wall Street earlier in the week changed the global business climate and gave pressure on countries, regional economies and their leaders to shelter themselves from the stock market stress.

Let us check on how two major offshore outsourcing destinations, India and the Philippines, stand up to the coming of the storm.

Though the US is the biggest market for Indian software technology and IT-enabled services, financial analysts and industry insiders say that India business, especially its off-shore outsourcing market, will not be affected… much.

This is due that most IT-eS/BPO/KPO companies in India were prudent early on to have a diverse clientele portfolio. Other than the US, Indian companies have been working for European as well as Asian markets.

This forecast is shared by NASSCOM that though there are concerns over the economic developments in the US, the impact will be short term and company specific.

This goes the same for the Philippines. According to the International Monetary Fund, the country is in a better position to face this crisis due to recent fiscal reforms, such as indexing tobacco and alcohol taxes to inflation in order to generate the revenues to finance poverty alleviation programs.

According to insiders, the Philippine banking system is very stable and insulated against external economic shocks, particularly commercial banks which are well capitalized and protected from developments in the US.

For the off-shore outsourcing industry leaders in the Philippines, the US economic slump could slow down the demand for services since investors are presently deal with the crisis however afterwards, ventures in to off-shoring and outsourcing will most likely become more appealing as US firms are further pressured to cut operating expenses and gain access into emerging markets for profit.

The signal has been raised and all eyes are on the US and the world economy, but for the Indian and Philippine business destinations, there is no cause for great alarm. These two tropical countries have suffered through real weather that produces typhoons and storms and flash floods on a near-daily basis, they’ve suffered and learned to survive, survive to succeed.

Outsourcing Solutions, Inc. – your outsourcing partner!

References:

  1. “Asia battles to shield markets from Wall Street crisis.” 18 September 2008. Reuters. Accessed 19 September 2008. Link here
  2. “Techies take IT on the chin.” 19 September 2008. The Economic Times. Accessed 19 September 2008. Link here
  3. “Short term impact on outsourcing industry: NASSCOM.” 18 September 2008. The Times of India. Accessed 19 September 2008. Link here
  4. De Vera, Ben. “Off-shoring, outsourcing stand to gain.” 19 September 2008. The Manila Times. Accessed 19 September 2008. Link here
  5. Ferriols, Des. “RP in better position to face meltdown – IMF.” 19 September 2008. The Philippine Star. Accessed 19 September 2008. Link here

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