Lost in Translation

By Marites Vitug (from this site)

Poor English skills threaten the Philippines' dreams of becoming a new call-center magnet in Asia.

With one out of 10 citizens unemployed, many of the country's best and brightest gone off to work elsewhere in Asia and the Middle East, and millions still living in poverty, the Philippines can boast few economic bright spots. One that the government has touted for years is outsourcing: officially at least half of all Filipinos speak English, and low labor costs have given a boost to the so-called business-process-outsourcing (BPO) industry. Five years ago there were 10 call centers in the Philippines; today there are 108 employing 200,000 Filipinos, mostly in their mid-20s. Last year the industry generated $2.3 billion in revenues—up about $1 billion over 2004—and analysts expect an additional $1 billion jump in sales this year. Call centers account for about 80 percent of the players in the BPO industry.

In a recent speech while inaugurating a Dell call center in Manila, President Gloria Macapagal Arroyo predicted that up to 2 million Filipinos will be employed in such places by 2010. That bullish projection—a tenfold increase over current numbers and some 2 percent of the entire population—struck even industry advocates as breathtaking in its ambition. "We have proven that fiber optics not only transmit data or voice, but also Filipino hospitality," Arroyo said, harping on the country's oft-quoted advantage over India, its technologically advanced rival. "Because it's not yet possible to download a handshake or e-mail a hug, the next best substitute is a Filipino call-center employee."

What Arroyo didn't mention is that down in the trenches, the burgeoning BPO industry is already encountering growing pains—serious ones. The problem: many call centers can't keep up with demand because they can't find enough employees who speak "proper" English. "For every 100 people that apply in the call centers, only three to five are accepted," says Mitch Locsin, executive director of the Business Processing Association of the Philippines. Most are rejected because of poor English communication skills—a sad situation for a country that was an American colony for 50 years and is a bastion of English in Asia. "Almost all Filipinos understand English, but when we test the applicants with simulated phone calls, they take a while to reply because they translate the words into Tagalog [the local language] in their minds first," Locsin says. Weak English is an issue for even the largest call centers, which traditionally attract the most promising talent from the country's best schools.

Rainerio Borja, who heads PeopleSupport, one of the country's largest and most profitable call-center operations, points to a burst of nationalism 20 years ago as the cause of the problem. "There was a push to institutionalize Tagalog as the medium of learning in all schools," he says. "Rightly or wrongly, I believe our leaders were doing this to get away from our long colonial past and establish our country's own identity."

Now, to become more globally competitive, the government is scrambling to promote English to young people as the ticket to a good career. Three years ago the Department of Education reinstated English as the primary language of instruction in schools. Various business groups, including both the U.S. and European chambers of commerce, are sponsoring public-relations programs lauding the career benefits of English; one of the campaigns is called "English is cool" and is designed to break young people of their habit of speaking "Taglish"—a mix of English and Tagalog. In addition, Arroyo has promised to set aside $9.6 million to help put so-called near hires—an industry euphemism for applicants rejected due to a weak command of English—through a 100-hour English refresher course. The grant was made after an aggressive campaign by the industry lobby group, which was getting worried about call centers' losing business to countries like India.

The government well understands the critical importance of the industry—one of the few high-value sectors in which the country can compete with its bigger Asian neighbors. Manila has granted the outsourcing companies various concessions, ranging from tax breaks to zoning changes that allow fast-food restaurants, for instance, to operate in office buildings to serve call-center employees.

One enterprising Filipino has also started a private school catering to near hires. Based in the city of Cebu, the company, called ExcelAsia, is opening a sec-ond branch in the Manila financial district of Makati, where many call centers are located. The goal is to help the locals not only understand common American expressions and idioms, but also to speak with an American twang. "Just imagine the problem we get when an American says to one of our call-center employees, 'Get outta here'," Locsin jokes. "And the call-center employee responds, 'Sir, you want me to put down the phone already?' " For a country desperately in need of an economic-success story, such gaffes are no laughing matter.