Top 9 Reasons to Outsource to the Philippines

This post originally appeared on the ICMI Callcentre blog on February 22, 2013.

The global offshore services market is growing at a healthy pace and will more than double by 2016 (BPAP, 2012). In the current economic climate where competition is widespread, companies are looking to cut down on costs, while maintaining impeccable levels of customer service and accessing workforces that are commercially sophisticated. New markets for business process outsourcing (BPO) are opening up, and companies are looking to maximize efficiencies by starting to spread their services across different locations.

Up until two years ago, India had been the world’s biggest BPO provider. However, since the very first calls were taken there in 1997, there has been an extraordinary rise in popularity of the Philippines as a BPO destination (Economist, 2012). It has become one of the country’s most dynamic industries and is now the Philippines’ second largest contributor to GDP after overseas foreign workers and their remittance. Centered in Metro Manila, the Philippines employ approximately 640,000 people in the BPO space and it’s projected to reach 860,000 by 2016. This makes the Philippines the number one global destination for voice-related services (BPAP, 2012).

Already serving companies in North America, Canada, Asia-Pacific and the EU, the Philippines is rapidly becoming the BPO destination of choice. Here are nine reasons to outsource to the Philippines:

1. Economic growth

According to a recent report in the Wall Street Journal (2012), “the Philippine economy will keep accelerating despite global headwinds”. Its economic stability has enabled investment in technology, talent and infrastructure, providing companies with assurance that they can access top-of-the-range services.

2. Talent

In anticipation of sustained industry growth, the Philippine government has implemented a series of initiatives to support talent development in BPO. For example, as part of the government’s Industry Public-Private Partnership Initiative, universities in the Philippines have now begun creating BPO specific curriculum.
Philippines now generate 450,000 tertiary graduates annually, and working in a call center has come to be considered a middle-class job (Economist, 2012). This has created the third-largest talent pool among the world’s greatest BPO service centers, after India and China (BPAP, 2012).

3. Cost savings

The Philippines presents significant cost savings for BPO operations. It is estimated that the salary of a contact center agent in Philippines is between 14-20% of their Western counterparts (Outsourcing Malaysia, 2011). On top of dramatic labor-related cost savings, commercial property and infrastructure is significantly cheaper and subsidies and tax breaks further reduce costs.

4. Policy environment

The Philippines has an enabling policy environment with impressive government investment incentives. A number of leaders have aided the rapid growth of BPO in the country, including President Fidel Ramos, who helped initiate the industry by deregulating telecoms and improving the country’s power supply infrastructure, and former President Gloria Macapagal Arroyo who implemented a number of tax exemptions (CCAP, 2012). This enables outsourcers to pass along cost-savings and efficiencies to their customers.

5. Infrastructure

Transportation, educational and utility infrastructure in the Philippines is world-class and constantly improving. Modern highways link many of the country’s BPO centers, and there is an extensive commuter rail network allowing access between the main hubs. A report conducted in conjunction with the development of the IT-BPO Road Map 2011 – 2016, found that the Philippines offers both superior infrastructure and more generous incentives in the sector compared to its competitors.

6. Neutral English accents

One of the major draws for multinational businesses is that the Philippines is the third largest English-speaking country in the world and that Filipinos speak English with a neutral accent (Department of Tourism, Philippines).  The country has been ranked number one globally in terms of quality of English and Western cultural affinity, according to the Talent Index generated by O2P and the Everest Group.

7. Technology

Contact centers in the Philippines are some of the most innovative in the industry, and have been early adopters of a range of technologies such as IP telephony and social media, in order to communicate with their customers. For example, according to socialbakers, who track social activity, the Philippines is now Facebook’s eighth-largest market. The Philippines now ranks second in non-voice complex services globally (BPAP, 2012).

8. Cross-sector experience

As it has grown, the BPO industry in the Philippines has diversified significantly in breadth and scale. It now delivers services in a wide range of sectors and industries, including engineering, health care, legal, financial, creative, and software services, as well as for the energy, banking, investment, insurance and shipping industries. By vertical, banking and financial services, communications, government, technology, retail, and travel and transportation continue to be the largest consumers of BPO services in the Asia/Pacific region (Gartner).

9. Quality of life

Quality of life in the Philippines has drastically improved in recent years, with the country’s sustained economic growth and political stability. The current president, Aquino, has been aggressively working on anti-corruption campaigns and has improved the investment grade of the Philippines this past year. As suggested in the Huffington Post (2012): “The new Aquino administration is laying down the foundation of perhaps the next tiger economy in Asia”.

It not only hosts widespread transport, telecommunications and educational infrastructure, but also offers vibrant night life, world-class entertainment and a diverse natural environment. In a quality of life survey conducted by HSBC (2011), the Philippines ranked eighth globally.