The Philippines was dubbed “the BPO Capital of the World” in 2010. The country’s global BPO market share has quadrupled, rising from 4% in 2004 to 10–15% in 2021. In 2022, the Philippines ranked second to India as the top player for outsourcing services globally, due to the Filipinos’ soft skills, English language proficiency, and cultural affinity for serviced countries.
This movement started in 1992, when Frank Holz founded the Accenture Global Resource Center in the Philippines. It was the first contact center in the country and marked the beginning of the BPO industry. Today, the Philippines is home to over 851 registered BPO firms and 429 call centers, according to the latest data from the Philippine Statistics Authority (PSA), accounting for 7% of the country’s GDP and employing more than 1.44 million employees.
Why Outsource in the Philippines
Companies from the Americas, Europe, Australia, and other countries in Asia are outsourcing their workforce to the Philippines for valid reasons.
-
Large and highly skilled workforce
Every year, the country has 850,000 high-education fresh graduates, according to IT and Business Process Association of the Philippines (IBPAP) The Philippine IT-BPM Industry Roadmap 2028: Executive Summary, who are candidates for various industries, including the BPO sector. The educational system of the Philippines is also competitive and is on par with the skill requirements of most roles being outsourced by international companies.
-
Strong English language proficiency
According to IBPAP, the Philippines is among the most English-proficient countries in Asia and has a 96% literacy rate. Also, Filipinos are notably customer-centric and have an English mastery and accent that are comprehensible in most of the serviced countries. This is due to the fact that the Philippines employs Tagalog and English as its official languages.
-
Cost effectiveness
In comparison with the local operations of companies from the Americas, Europe, Australia, and other Asian countries, the cost of manpower, workspaces, and other operational expenses in the Philippines is more cost-effective. According to IBPAP, the cost savings are about 70% over the US and Europe. This enables investing companies to hire in volume, scale in operations, and spend more on workforce training, benefits, and others.
-
Strong government support and a robust ecosystem for global businesses
Three years after the establishment of the first contact center in the Philippines, the Congress passed the Special Economic Zone Act, which aims to transform selected areas into highly developed ecozones and promote the flow of investors, both foreign and local. This also paved the way for the establishment of the Philippine Economic Zone Authority (PEZA), a Philippine government agency tasked with promoting investments, extending assistance, registering, granting incentives to, and facilitating the business operations of investors in export-oriented manufacturing and service facilities inside selected areas throughout the country.
Since then, operations of BPO and contact centers in the Philippines have not only grown in the country’s capital and main island of Luzon, but also expanded to Visayas and Mindanao. This allowed businesses to reach other islands of the archipelago, harnessing the country’s workforce capability.
Summary
Despite the COVID-19 pandemic’s impact worldwide, the BPO and contact center industry in the Philippines quickly accelerated digitally. Because of work-from-home arrangements, the industry quickly pivoted to cloud-based, remote desktop technology. The pandemic has served as a catalyst for this sector to explore remote and hybrid work, which has led to a fast-paced growth in offshoring services in the country.
The Philippines remains a top choice for outsourcing technical and skill-based roles, which helps investing companies with their three selection parameters: regulation, costs, and labor, which are significant for the long-term competitiveness and sustainability of these organizations. The Philippines has checked all the boxes. The government, its agencies, and private associations work towards building the outsourcing sector. It both benefits the country and the international service providers with growth financially, globally, and economically.
Viventis Search Asia is a Human Capital Management company specializing in Talent Attraction, Talent Development and Career Technology. Viventis Search Asia has assisted international organizations in volume hiring, recruitment process outsourcing, offshoring, executive search, interim management, and employer branding.
