Outsourcing in Philippines
How the Philippines Took the Lead as a Global Outsourcing Hub: Going from Strength to Strength
As technology rapidly evolves, organizations and enterprises find themselves with almost limitless opportunities and the potential to expand into new markets worldwide. Among the various technological innovations, one game-changing opportunity stands out: Outsourcing.
In the realm of Outsourcing, there’s one country that holds the esteemed title of being the BPO Capital of the World—The Philippines. This well-educated, English-fluent island nation has emerged as a leading strategic advantage that C-suite executives are leveraging in today’s hyper-competitive business environment. The remarkable growth in the Philippines’ IT-BPO industry can be attributed to its financial advantages, a world-class technical education system, proficient English skills, and numerous other factors, propelling the Philippines to a prominent position among the world’s top outsourcing destinations.
A Global Center of Excellence
As per the Information Technology and Business Process Association of the Philippines (IBPAP), the Information Technology-Business Process Outsourcing (IT-BPO) industry serves as a primary economic catalyst for the country and is poised to surpass remittances from Overseas Filipino Workers (OFW) as the leading source of income for the Philippine economy. In parallel, Global in-house centers (GICs) persist in delivering services to renowned Fortune 1,000 organizations globally, solidifying their position as one of the most significant job-generating sectors alongside the IT-BPO industry.
A noteworthy observation from the World Trade Organization (WTO) in its 2019 Report underscores the Philippine IT-BPO industry as a pivotal force driving economic transformation, growth, and development. Furthermore, the Department of Trade and Industry (DTI) acknowledges the proficiency of the Philippine IT service sector, encompassing software development, call center technical support, account management, and other critical back-office services. This thriving sector is recognized as a ‘vital economic lifeline’ for the Philippine economy.
What Makes the Philippines a Global Outsourcing Hotspot?
Here are ten advantages that position the Philippines as a premier global outsourcing destination:
English Proficiency: English is an official language in the Philippines and is spoken by Filipinos from birth in various aspects of their lives. The widespread use of English makes the Philippine workforce highly regarded for its excellent language skills, setting it apart as a top provider for voice services and a skilled IT & Computer Engineering workforce.
High Literacy Rate: The National Capital Region (NCR) boasts a 97% literacy rate, and over 95% of Filipinos working in outsourcing companies have at least an undergraduate college degree. This results in a diverse and well-educated talent pool with backgrounds in business administration, finance, communication, education, mathematics, engineering, and computer science.
Compatibility with Businesses of All Sizes: The Philippines caters to businesses of varying sizes, from startups to multimillion-dollar enterprises. It has become the preferred choice for global businesses seeking outsourcing partners capable of handling technically skilled tasks across diverse services, including accountancy, payroll, IT, digital marketing, web development, and SEO.
Cost Efficiency: Outsourcing to the Philippines can yield operational cost savings ranging from 60% to 80%. The lower cost of living in the Philippines, compared to Western counterparts, translates to significantly reduced employee compensation and benefits without compromising the quality of work.
Cultural Compatibility: With Western culture deeply integrated into everyday life, Filipinos exhibit a high level of adaptability to principles and ideologies embraced by Western companies. This cultural compatibility facilitates seamless communication and connection with clients and colleagues.
Strong Data Privacy Protection & Laws: The Philippines is proactive in strengthening data privacy regulations, avoiding the cybersecurity challenges faced by other countries. The Philippine Data Privacy Act of 2012 ensures the utmost protection and secure flow of personal information, positioning the country as one of the three ASEAN nations with existing data protection laws.
Government Support: The government actively supports the IT-BPO sector, offering incentives such as tax breaks, educational grants, and simplified import/export procedures. This support aims to attract global businesses to establish offshore operations in the Philippines while honing the relevant education and skills needed by the local workforce.
Proven Track Record: The BPO industry in the Philippines, established in 1992, has seen a ten-fold increase in total revenue. With a projected income of $55 billion by 2020 and over 850 registered companies providing employment opportunities to more than a million Filipinos, it demonstrates a robust and enduring track record.
Economic Stability: Despite impending reforms, Foreign Direct Investments (FDI) in the Information and Communication industry reached $3.6 billion in the third quarter of 2019 alone, marking a four-fold surge compared to the same period in 2018. This attests to the country’s economic stability and attractiveness to foreign investors.
Global Payment Technologies: The Philippines embraces advanced payment technologies to enhance customer satisfaction for foreign merchant clients. The provision of a cutting-edge payment platform and an expanded suite of related product offerings ensures superior technological and operational efficiencies for companies engaged in outsourcing in the Philippines.
For leaders of modern enterprises seeking to minimize expenses, boost sales revenues, and expand their global footprint, outsourcing operations in the Philippines offers a comprehensive solution. For more insights, check out our other outsourcing articles or reach out to us via email if you have further questions on navigating the thriving Philippine outsourcing landscape.