The Philippines, Outsourcing Capital of the World

Posted by John Russel Alba - May 6, 2019 • 5-minute read

The Philippines Outsourcing Capital of the World

The Philippines has earned the reputation as a travel destination for natural wonders, mouth-watering food, and hospitable people. In the last few decades, the country has pivoted towards a more service-oriented market. Investors have turned to the archipelago as one of the top destinations for outsourcing their businesses. In addition to being a popular vacation spot, the Philippines has grown into a global competitor in business process outsourcing (BPO). This industry, in fact, is one of the top contributor in raising the country's gross domestic product (GDP) in 2018.

Outsourcing in the Philippines

In the early ’90s, companies started outsourcing work to cut costs and gain more efficiency in their processes. It has since developed from the simple acquisition of simple tasks to the execution of more complex processes. Even to this day, outsourcing is still changing, evolving, and innovating business processes around the world. The Information Technology and Business Process Management (IT-BPM) sector benefits heavily from outsourcing, and has grown to a multi-billion dollar market in the span of 30 years, where one-sixth of the global IT-BPM sector is outsourced.

As a new player in an emerging market, it took a few years before the Philippines was recognized in the industry. Thanks to proper training, willing investors, and government support, the Philippines became a front runner of the industry in the mid ’90s and has since climbed the global ladder. In 2015, the country was considered the reigning leader in BPO with India following closely behind.

Today, the Philippines supports a wide range of services, with Banking, Financial Services, and Insurance (BFSI), High-Tech and Telecoms, Manufacturing, and Healthcare as the top four industries outsourced. Investors around the world have flocked to the archipelago, prompting local business expansions and raising the total number of employees in the BPO industry to skyrocket to over half a million as of 2016. And it still continues to grow to this day.

Business Process Outsourcing (BPO) Industry in the Philippines(original photo courtesy of Business World)

Let’s dive into the details as to why the Philippines is the go-to outsourcing destination for investors.

A preferred destination

You might ask, “how did the Philippines manage to become a household name in the BPO industry?” It all started when the government saw the opportunity that business process outsourcing presented as a potential source for steady income and employment for its people. As a result, they established ecozones or special economic zones and passed a law to lower the taxes of businesses operating out of those areas.

This created a great environment for budding BPO businesses to compete and thrive. This naturally caught the attention of investors and future stakeholders who were looking for growth and a new foothold in Asia.

Since its arrival in the Philippines, outsourcing has opened doors for 851 registered establishments in the local BPO industry—extending services in healthcare, telecommunication, banking and finance, legal, and so much more—making the country the BPO capital of the world in 2010.

Today, among approximately 42.5 million Filipinos in the workforce, about 575,600 of employees work in the BPO industry. The Filipino’s inherent skill for quality service, respect of values, and sense of integrity, as well as an affinity towards a friendly work environment, sums up the marketability of the Philippines in the global BPO scene.

Here are some of the top skill-based factors that influence investors to  choose the Philippines as their preferred outsourcing destination:

  • High English proficiency
  • Neutral accent
  • 95% literacy rate
  • Close cultural affinity with the US and other western countries

In addition to the above, Filipinos have also shown great aptitude in IT, technical support, and customer service. Thanks to the ingrained culture of hospitality, Filipinos are known to be compassionate and accommodating, making them a perfect fit for businesses looking for customer service representatives (CSR).

Thanks to years in the BPO industry, the Filipino workforce has learned to adjust to their clients’ time zones and geolocations, taking night shifts and even working during holidays. This flexibility offers an edge above other service providers—and earns points in the eyes of potential investors.

The Philippines is also home to some of the most creative people in the world. Filipinos put this to good use in delivering their services, giving way to the rise of the creative process outsourcing (CPO). By outsourcing their marketing and branding, businesses were able to focus more on their actual work all while ushering in industry growth.

Overall, the Philippines has proven itself to be the outsourcing capital of the world for various reasons. There have been many changes since its arrival, and it continues to grow in new frontiers and industries. What remains is the unwavering heart of the Filipino people—committed to their work and the pride of being top service providers in the world.

Are your day-to-day marketing tasks lacking a definite process, making work more tedious than it needs to be? Are your in-house design and web development team finding themselves undermanned while their workload piles up? Are you looking for a more cost-efficient and time-efficient way to streamline and automate your workflows? If your answer is yes to any of these questions, then outsourcing some of your tasks may be the solution you need.

Click on the button below and see how much you can save with outsourcing creative work.

New call-to-action

Topics: Creative Process Outsourcing, outsourcing calculator

Written By

John Russel Alba

John Russel Alba

is a Content Specialist at StraightArrow. He’s also the father of two unbelievable adorable kids and the husband of a gorgeous, independent, and incredibly smart woman. He loves basketball (although he thinks he’s not very good at it) and he rides his bicycle to work - that’s 20 km to-and-fro, every day! (He’s crazy.)

Leave a Comment

Recent Posts