WITH the recent victory of Donald J. Trump in the United States (US) presidential election, several American-owned business process outsourcing (BPO) based in Davao City are projected to decrease thus, would be a threat to the city’s economic development, according to a political science analyst-professor from one of the universities in Davao City.
In an exclusive interview with VoxPop Davao, Prof. Lindsey Espino, former chairperson of the Political Science department of the University of Mindanao-Davao said the historic comeback of Trump in the White House after securing the 2024 US Presidential elections last November 6 will have major implications for some countries, particularly between the Philippine and US bilateral relationship and their economic change policies due to his “American nationalism” ideology and “diplomatic independence” doctrine.
“Si Trump, gibuhian man gud niya ang istroya niya [about] American nationalism na kuhaon na to niya ang mga trabaho na gi-outsource niya sa ubang nasod. So meaning, kung seryoso siya, balik sa mga Americans ang trabaho or pwede niya i-withdraw ang mga na-outsource niya kaning mga BPO nga naa diria sa Davao karon. But of course, dako pud kaayo ang magastos sa America tungod sa labor (Trump released a statement before [about] American nationalism that he would take the jobs that he outsourced to other countries. So meaning, if he is serious about this, these jobs be returned to the Americans or he can withdraw the jobs he outsourced such as BPOs that are here in Davao now. But of course, it costs a lot for the American government because of labor),” Espino said.
Since the start of his leadership, the 45th and 47th US president identifies himself as a nationalist and has made it known that his policy is "America First". Trump believes that the civic, ethnic, cultural, or economic influences indicate the aspects that characterize and distinguish the United States as an autonomous political community. This phrase is frequently used to describe initiatives to strengthen national identity and self-determination in both domestic and foreign affairs.
Espino added that although he is uncertain about the other effects of the Trump presidency on the Davao business community, he projected that the US-based BPOs in the region will possibly be significantly diminished and that only 30 to 40 percent of offshore outsourcing markets remain or will be actively operating. And this will be mostly coming from other international call center companies such as Australia, Canada, and from other European nations.
“Hopefully, ma-consider niya nga dili i-withdraw ang investments not just in the Philippines but in entire Southeast Asia, specifically in Davao City (Hopefully, he will consider not withdrawing investments not just in the Philippines but in entire Southeast Asia, specifically in Davao City),” Espino said, noting his apprehension after the Amazon, a US-based e-commerce titan recently expanded its branch in Davao City and is expected to generate 500 jobs among Dabawenyos.
In 2016, when Trump was elected as the 45th US president, political analysts in the Philippines also noted that the BPO industry, a vital pillar of the country's economy would experience a significant drop as the Republican Party member supported US job protectionism, which could affect remittances and exports in general.
“For the Philippines, we think a material risk from a Trump presidency may be US job protectionism, which could weigh on global outsourcing/offshoring activities from which Philippines (and other emerging markets) benefit,” iCiti Philippines economist Jun Trinidad said in a media interview last 2016.
Meanwhile, earlier this year, following Trump’s win against former US Vice President Kamala Harris, Nomura, a Japanese investment bank said that the Philippines will be among the most vulnerable countries in Southeast Asia under a second Trump 2.0.
“For one, it said a potential tightening of immigration policies in the US, a major host country of Filipino expats, could temper the growth in remittances,” the firm said.
Nomura stated that although Trump has not made any clear statements about "bringing back jobs to America," the possibility of a similar strategy in the future could have an impact on BPO profits, which are a significant source of funding for the Philippine economy.
Nearly $30 billion is contributed to the Philippine economy annually by the BPO sector. An estimated 1.3 million Filipinos worked for more than 1000 BPO companies in 2019, and that number is expected to increase by 8 to 10 percent annually.
The country is thought to control 10 to 15 percent of the world's BPO business. In addition to serving Europe and its closer neighbors, including Japan, New Zealand, and Australia, its services are focused on the USA, its former colonial power.
Strengthened bilateral ties
Meanwhile, Davao City Councilor Al-Ryan Alejandre, chairperson of the committee on international relations and the committee on tourism and beautification, told VoxPop Davao that with Trump’s presidency, he hopes that this would bring more opportunities to strengthen the ties between the Philippines and the US.
“I hope magdala og opportunities para mapalawig ang ties between the Philippines and the US and Davao City ilabi na sa ekonomiya na makahatag para sa trade and investment para sa mga Dabawenyo (I hope that this would bring opportunities and strengthen the ties between the Philippines and the US and Davao City especially the economy that would provide trade and investment for Dabawenyos),” he said.
Espino also reiterated the same sentiment, saying the healthy bilateral relations of the US and the Philippines will remain. He said that his basis is the mutual defense treaty and the military bases agreement.
“It will always be favorable to the Philippines either of the two [Trump or Kamala Harris],” he said.
He then highlighted the hard approach of Trump towards China, citing that it was him who started the digital, trade, and currency war against the Chinese Communist Party. Espino also said that the Enhanced Defense Cooperation Agreement (Edca) of the US and the Philippines would continue since it is very strategic for both sides.
Former President Rodrigo Duterte, in a message, congratulated Trump for winning the US presidential election. He hopes that Trump's new mandate will have new optimism and strength for the American people, especially during the challenging times.
“I look forward to the success of your administration and to our shared aspirations for greater peace and prosperity for our countries and peoples,” he said. DEF, RGP
