HSBC is to hire 500 people in the Philippines

The bank will initially hire 500 people for the operation, to be based on the outskirts of Manila.

HSBC said last year that it was cutting 4,000 jobs at its UK call centres over the next three years.

"The jobs in Manila are included in that amount," an HSBC spokeswoman told BBC News Online.

'Dangerous location'

The bank already has operations in the Philippines.

"Quality telecommunications... and English-language skills... are freely available in the Philippines," said HSBC executive Warner Manning.

The Philippines is rated among the world's top 10 most dangerous countries to do business, according to statistics published this week by insurance broker Aon.

As we get comfortable, we should see unlimited potential in financial services Rafael Buenaventura, Central bank

Philippine President Gloria Arroyo is currently struggling with separatist militant groups in the south which include the radical Islamist group Abu Sayyaf which is widely thought to have links to al-Qaeda.

Central bank governor Rafael Buenaventura acknowledged the risks as he admitted that "political uncertainties" had delayed the completion of negotiations with HSBC.

But he hoped other banks would follow the British firm's move.

"As we get comfortable, we should see unlimited potential in financial services," he said.

HSBC intends to pump "several million" dollars into the project which will be located at the Northgate Cyberzone, in Alabang, south of Manila, the firm's officials told correspondents.