A Change in US outsourcing policy

“Challenging Global Environment to Test Asia’s Robust Credit Fundamentals,” a report by Moody’s Investors Service stated the following:

• Scaled down engagement in global trade under the Trump administration would seem risky to trade and investment partners of the US.
• If the US tightened its rules on global outsourcing, high-value manufacturing exporters such as Korea, Taiwan, India, Malaysia, and the Philippines would become liable to enormous risks.
• Asian countries lost their opportunity to export their goods and services to major markets because of the withdrawal of US from the Trans-Pacific Partnership (TPP). The earnings of business process outsourcing companies are a major source of foreign exchange for the Philippines.
• Tightening of US Federal Reserve policy, China’s trilemma, increasing advantages in Asian economies and political developments in Europe are other risks which can affect the Philippines.
• The Philippines is one of the 10 countries in Asia to have a stable outlook on the banking system. They also got a Baa2 rating for sovereign debt.

On a brighter note, the Philippines got a BBB rating from S&P Global Rating which the minimum investment grade. This could have a positive effect on BPO services.