Business-process outsourcing (BPO) companies in the Philippines see a strong potential in increasing its presence in the Australian market owing to the increase of labor cost, growing skills shortage and strong currency there.

The Business Process Outsourcing Association in the Philippines (BPAP) led a delegation of local companies to Australia last week to explore opportunities in catering to the demands of Australian market.

“Overall, we were very pleased with the mission that we did to Australia,” said BPAP chief executive officer Oscar Sanez in an interview with reporters over the weekend.

The business-process outsourcing companies in the Philippines have employed around 250,000 people with total investments worth $3.45 billion in 2006, according to Department of Foreign Affairs undersecretary for international economic affairs Edsel Custodio. He said the BPO investment is expected to increase to a total of $12 billion in 2010.

Sanez said the delegation has already agreed to forge partnerships with its counterpart Australia Information Industry Association (AIIA) that represents 500 companies engaged in information-technology services.

Sanez said next to the US, the Philippines considered tapping the Australian market because of the increasing demands of its companies owing to the increase in the cost of labor and skills shortage there.

He said the average cost of labor for call center agents in Australia is at Aus$33,000 per year but there is a big gap because the demand is high and there is limited supply. US companies spend $24,000 a year for a call-center agent.

Sanez said the Philippines is currently looking at doubling its current 3-percent share of the outsourcing industry in Australia, citing huge potential in the market. India has the largest chunk of the Australian outsourcing industry at 7 percent to 8 percent.

“Australia is like a frontier to us, outsourcing as a concept is clearly understood and developed in there, but we have not done a lot of offshoring, out of what can potentially be outsourced in Australia,” he said, adding less than 12 percent has been outsourced based on a local consultancy firm in Australia.

He said the partnership with AIIA set to be implemented within the next two years focuses on joint sharing of best practices for the industry and the second, joint exploration of mutual business investment opportunities.

A delegation of AIIA representatives along with some Australian outsourcing companies will visit the Philippines in the next four weeks to look at the facilities and services available.

Sanez said attracting Australian investors is easy  “as soon as we make them aware, invite them to come over that changes their perspective, once they arrive here and see it’s a developed market, it convinces them to invest here.“

The Philippine delegation visited 35 companies, 15 of them in Melbourne and 20 in Sydney.

Two Australian companies that have set up last year in the country, namely, Stellar and Admirex, have agreed to expand its operations in call-center, back-office and credit-processing services as “they are pleased with their experience in the Philippines.”

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Business-process outsourcing (BPO) companies in the Philippines see a strong potential in increasing its presence in the Australian market owing to the increase of labor cost, growing skills shortage and strong currency there.