Why Outsource to the Philippines?

A few years back, when you talk about outsourcing, Philippines was not the first destination that comes into mind. When foreign investors look for stable countries to build their call center, the Philippines was not the first choice either. But there were bold ones who tried outsourcing to the country and are now enjoying the success from the risk they have taken.

While India still remains as the top destination for IT outsourcing and business process outsourcing (BPO), Malaysia, Singapore and Thailand are also making big progress. But on top of all the popular Asian countries for outsourcing, the most headway has consistently been the Philippines.

Government Support

As the country continues to excel in BPO, the government of the Philippines has been helping foreign investors in order to attract more. Like what former Fidel V. Ramos did when he help improved the country’s power supply infrastructure and former president Gloria Macapagal-Arroyo who implemented a number of tax exemptions (CCAP, 2012).

The IT and Business Process Association of the Philippines (BIPAP) even created a 2011-2016 roadmap to promote the competitive advantages and the growth potential of the Philippines outsourcing industry and forecasted to generate a revenue of $25 billion in 2016 which is 10% of the global market share.

The Board of Investments (BOI) has developed incentive schemes which include an income tax holiday of 6 years for pioneer enterprises and 4 years for non-pioneers, and a deduction of 50% from taxable income of labour expenses.

While the Department of Education (DepEd) continuously develop new strategies to improve the education and training of students in order to produce qualified graduates for the labour market.

Technology and Culture Compatibility

Outsourcing in the Philippines also grants investors with employees who are culturally aware and updated with the latest technologies and trends. Filipinos are natural adopters of what’s new in the market and their environment not just for personal gain but also for career leverage.

Reduced Management Responsibilities

Because BPO companies in the country also compete with each other, more and more outsourcing firms in the Philippine are developing new and wider solutions for their clients like offering a free supervisor or manager to each of their clients. Plus, the administrative responsibilities fall under the care of the service provider allowing their clients to focus more on the core competencies of their business.

Language Barrier is Not an Issue

The Philippines has adapted English as its second language, including English as a subject as early as elementary. It even attracted other Asian counties like Korea, China and Japan to study English in the Philippines because of the quality of education. It even caught the attention of countries like Iran, Libya, Brazil and Russia because learning English in the Philippines is cheaper compared to the US, UK, Canada and Australia.

The Filipino’s fluent American accent may have been influenced by the US when they colonized the country, but it’s the country itself that dedicated its resources and attention to retain the English language after the Americans had left.

Highly Skilled and Readily Available Workforce

Outsourcing companies in the Philippines have developed specific training programs to help their countrymen qualify for job openings in the BPO industry and simultaneously supply manpower demands from their foreign clients. Colleges and Universities in the country also provide courses for jobs that are in demand today such as creative design, animation, multimedia arts and many more. It eliminates the time and money for training new employees.

Cost Savings

Due to conversion rates, dollar to peso, Philippines outsourcing has become more attractive to foreign investors. The internet infrastructure of the country may still need a lot of work but between salaries, benefits and operational overhead costs Filipino workers are still cheaper compared to their western counterparts. A business owner can easily build a team of call center agents or data entry specialists in the Philippines without having to invest a lot.