Solons seek inquiry on HSBC outsourcing of bank functions

A group of party-list lawmakers is urging Congress to conduct an investigation into the series of outsourcing activities of Hongkong and Shanghai Banking Corporation (Philippines) Ltd.

In House Resolution 2574, Reps. Fernando L. Hicap (Party-list, Anakpawis), Neri J. Colmenares (Party-list, Bayan Muna), Carlos Isagani T. Zarate (Party-list, Bayan Muna), Luzviminda C. Ilagan (Party-list, Gabriela), Emmi A. De Jesus (Party-list, Gabriela), Antonio L. Tinio (Party-list, ACT Teachers) and Terry L. Ridon (Party-list, Kabataan) said the outsourcing activities of the Hongkong and Shanghai Banking Corporation (HSBC) Philippines had resulted in the decrease of local employment in the bank.

Hicap said the HSBC Ltd, considered as the second largest bank in the world, has been doing business in the Philippines since 1875.

“But in October 2008, HSBC closed its Customer Service Inbound functions for third party service handling, resulting in the termination of 36 rank and file employees,’ Hicap said.

He said in 2009, HSBC effected the ‘migration’ or the outsourcing of about 450 banking functions, which had erstwhile been handled by some 400 regular employees to third party agency Global Service Center-HDPP (HSBC Data Processing Philippines).

“Likewise, in 2013, HSBC further contracted bank functions to third party service providers through the outsourcing of Payment Investigation to HSBC Data Processing Malaysia and the ‘migration’ of Corporate Real Estate to Jones Lang La Salle,” Hicap said.

The party-list solon further said that in January 2015, HSBC completed the “migration” of certain collection functions to the Global Service Center (GSC-HDPP), which had previously been handled by 54 local regular employees.

Rep. Neri J. Colmenares (Party-list, Bayan Muna) said members of the Hongkong Bank Independent Labor Union (HBILL) have condemned such outsourcing trend which has, in the last five years, meant the continuous decrease of local employment at HSBC by the hundreds, citing the fact that since December 2009, membership of the employees bargaining unit drastically dwindled by 70 percent or from 770 members to 215.

Colmenares said the HSBC invoked the Bangko Sentral ng Pilipinas (BSP) Circular No. 268 of December 5, 2000, which allowed the outsourcing of bank functions.

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FEB 12, 2016

Under the said circular, bank functions that can be outsourced include IT System/Processing, Data Imaging, Storage and Retrieval, Clearing and Processing of Checks, Printing Bank Deposit Statements, Credit Card Services, Printing of Bank Loan Statements, Credit Investigation and Collection, Processing of Export, Import and other Trading Transactions, Messengerial, Courier and Postal Services, Security Guard Services and Vehicle Service Contracts.

Ilagan and De Jesus, together with Tinio and Ridon, have raised concern and expressed alarm that the BSP has issued other such circulars which have widened the scope of banking functions that maybe outsourced, further endangering thus the job security of thousands of regular bank and financial institution employees.

They said Section 55.1 (e) of Republic Act No. 8791 or the General Banking Act which was cited by the BSP as the basis for issuing these circulars, does not however state anything that allows contractualization of the aforesaid banking functions.

The group has directed the House Committees on Banks and Financial Institutions and on Labor and Employment to conduct and probe into the outsourcing activities of the HSBC and its impact on the security of tenure of bank employees. (30) mvip