There is a vast potential for growth of economic ties between the Philippines and India in the services sector, particularly in the areas of information technology and business process outsourcing (IT-BPO). "This partnership will serve well the forthcoming Asean Economic Community and the larger Asean-India markets for services,” said a policy note published by the Philippine Institute for Development Studies (PIDS) obtained by The Daily Tribune. The paper noted that both countries can use the putative Asean-India Trade in Services and Investment Agreement to exploit greater synergies in their respective IT-BPO services where they have developed world-class capabilities. "Both countries can exploit their demographic advantages, high proficiency in English, expertise in IT-BPO services and their relative cost competitiveness vis-Ã -vis other countries in Asia to create economies of scale and scope in the services sector,” the note added. The paper considered the agreement timely as it will position both Asean and India to take advantage of global value chains in which high quality services such as banking, telecommunication and logistics serve as critical infrastructure for regional trading and regional production networks. The anticipated signing of the agreement can be a second pathway for stronger economic relations and cooperation after negotiations were completed two years ago. It said the Philippines is a viable investment destination for growing operations such as IT-BPO business services. "In particular, India can tap the Philippines as a hub for expanding toward the Asean IT-BPO services chains. Meanwhile, the Philippines may benefit from the transfer of technology and expertise from higher-end Indian services,” it added. Further, the paper underscored the rationale for increased cooperation between India and the Philippines in the IT-BPO services sector, noting the two countries are the most cost-competitive destinations for IT-BPO services. "Both countries also have the technical and managerial expertise for providing IT-BPO services. They are both lower-cost and competitive destinations for such services,” the paper further said.
