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Philippines Outsourcing   by Peter

Business process outsourcing (BPO) in the Philippines is one of the country's fastest growing industries. The country boasts one of the fastest growing outsourcing industries in the world. From a handful of employees and business providers when the industry began to expand in 2000, the BPO sector continues to grow annually as a result of several major factors that affect growth such as: the country's lower labor costs, competent pool of human resources and affinity with western culture.

The Philippines is the third largest BPO location in the world, next to India and Canada. To date, Philippines outsourcing accounts for about 21% of the global BPO market, and is now being considered as the prime outsourcing destination in Southeast Asia. Many prominent international companies have already outsourced operations in the Philippines; among these are computer giants such as Dell and IBM. HSBC, CitiGroup, Bank of America, and JP Morgan Chase Bank have also set up contact service centers in the Philippines.

Some of the reasons why the Philippines became Asia's ideal outsourcing hub are:

1. Competent Human Resources.

Filipino workforce has superior education qualification. English is part of the school curriculum; hence Filipinos can speak English with ease and confidence.

2. Strategic Location

The country is located at the crossroad of Eastern and Western businesses which is a critical entry point to more than 500 million people in the ASEAN marketplace and also a gateway of international shipping and air lanes which is good for European and American businesses.

3. Culture and Lifestyle

The Philippines was governed by the United States from 1899 to 1946 making Filipinos more familiar with American jargon and culture.

4. Low-cost Production

The country's employee salary is less than a fifth of that in the US since US dollar rate is high.

5. Business Friendly Economy.

The country like other Asian countries has an open economy that allows 100% foreign ownership in almost all sectors and supports a Build-Operate-Transfer (BOT) investment scheme.

6. Business Opportunities

The Philippine nation has improved various areas for investors and tenders a dynamic consumer market accustomed to an array of products and services.

7. Infrastructure Development

Different cities and regions in the Philippines are now investing in infrastructures that are attracting investors

Three major islands known as Luzon, Visayas and Mindanao comprise most of the Philippine archipelago. These three islands and 15 key cities were assessed by Commission on Information and Communications Technology (CICT) as ideal locations for outsourcing businesses. Human resources, peace and order, power and telecom infrastructures were the factors considered in the assessment.

Metro Manila, the Philippines capital is the most popular choice for BPO operations during the onset of outsourcing. In a study conducted by the Institute for Development and Economic Analysis Inc. or IDEA, it showed that Philippines outsourcing is earning over P3 billion annually, with most of the players situated in Metro Manila.

The country's major BPO hubs are located in cities of Makati, Ortigas, Alabang, Eastwood and Quezon City. As the BPO industry continues to grow and develop, investors are now establishing operations in other cities outside Metro Manila.

Aside from those in Metro Manila, the initial list of cities includes Cebu and Davao in the South that already have a considerable number of BPO providers. Other places like Bacolod in Negros Occidental and Sta. Rosa Laguna are now investing in infrastructure to jump start outsourcing business. Other cities identified by CICT include General Santos, Dagupan (Pangasinan), Cabanatuan (Nueva Ecija), Bacoor (Cavite) and Lipa (Batangas).

The steady increase in the annual revenue of the country's BPO sector shows the growing interest of foreign investors in the Philippines outsourcing market. Projected increase of 27% is also expected by Business Processing Association of the Philippines (BPAP) for 2011, bringing the estimated income to USD10.7 billion.

As the Philippine BPO Industry continues to expand, more and more foreign companies are now outsourcing operations to the country, creating job opportunities for the country's workforce.

About the Author

Online Marketing Manager @ Sourcefit Phils. Inc.

Negros Occidental Capitol Lagoon fountain


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