Will the Philippines fight back?

I’m in Manila in the Philippines today as I am speaking at the 9th eServices conference here. The event is just getting underway – Senior Undersecretary for Trade, Thomas Quino, just opened the event and we are expecting President Gloria Arroyo to speak soon.

In his opening address, Mr Aquino said: “Economies around the world are seeing challenging times, but we see new areas of collaboration and business models here in the Philippines. We can manage the impact of the global recession.”

Mr Aquino and the entire business community here seem keen to position the Philippines as a viable alternative to India. Clearly there is not the same scale, but they do have some traction now and the industry is actually very well positioned to work with smaller and mid-sized companies – perhaps, better than many Indian tech firms who have focused on the bigger deals.

However, it seems a little early to pronounce that the recession sweeping Europe and the USA will not affect the Philippines. I’m going to be interested in the new industry figures for the Indian ITES industry when they are published by Nasscom this week, because I believe that if we see the hi-tech industry in India slowing then other regions competing for the same type of business will find it hard to not be affected.

Of course, we are talking about an export industry here (service exports) – so a recession in the places where the clients are located has to hurt. In many ways it is likely that the Philippines can avoid too much pain even if the recession goes global, but that has more to do with a lack of integration into the global capital machine. Possibly a good thing in the present climate.

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