The growth of business process outsourcing (BPO) in the Philippines has undoubtedly developed so fast. The Philippines continues to be the call center capital of the world and is still the choice destination for customer relations management. It employs over a million workers and is anticipated to hit $25 billion in revenues in 2016.
Almost all major global IT/BPO vendors have a presence in the Philippines. They consider the country as their derivative business hub. The reason why these top-earning firms are outsourcing in the Philippines is because of its people. With the influx of talented workforce, the cost of production here is minimal and the produced outputs are greatly outsized.
Many back-office services such as accounting, business-to-business IT support and human resources have started to be outsourced in the Philippines by other countries. A call center, for example, can get different partners from different locations as it will allow them to afford seats better. A Philippine call center, for example, plans to have Australian, UK and US accounts. Australia will occupy the day schedule, UK will have a midshift schedule (around 2-3pm to 12 midnight) and US will take up the overnight schedule.
Countries Outsourcing Services to the Philippines and Why
The call center & BPO industry is indeed growing fast and the Philippine BPO sector is serving these countries for the much-needed investment, revenues and contracts:
From a cultural perspective, the United States and Philippines have a strong bond dating back to the 1800s. As a result, Filipinos have a cultural affinity for the United States. A former colony of the United States, the country’s proud of its excellent English skills that attract English-speaking call center businesses.
The Philippines’ linkage with the United States has been dynamic, robust and imperative. This relationship is fostered by a shared history and loyalty to mutual values, especially a commitment to freedom, democracy and a market economy. In 2009, when most of the world’s economies was staggering from the crisis, the United States invested $1.4 billion in the Philippine’s BPO industry, increasing from $986 million a year earlier, central bank data revealed.
In 2007, a research done by the European IT Service Centre concluded that only 1.2% of European share in the industry went to the Philippines and 10% of local BPO revenue was derived from European accounts. The first step which has been made to change this direction is the creation of Team Europe, led by the European Chamber of Commerce of the Philippines and the European IT Service Centre.
The European market is now significantly larger, making up to ten percent of the $4.5 billion BPO industry in the Philippines. Since 2009, EU businesses have been well established in the BPO industry from $350 million to $1 billion in 2012.
The good news for Australian businesses is that it has a noticeable influence in the Philippine BPO arena. With Australia now developing its business needs, many Australian companies are now looking for an outsourcing investment specifically on its IT departments. This makes working for Australia’s BPO even more attractive as the Philippines is only 2 hours behind AEST, hence the majority of agents working during the day.
Australia and the Philippines have an accomplished diplomatic and economic ties. These ties were officially established in May 1946 when Australia’s first Consulate General inaugurated in Manila. From them on, the two countries’ affiliation has developed covering trade and investment for the most part.
Most Japanese companies with outsourced BPO are in finance, accounting services and IT support.
The Philippines’ Department of Trade and Industry (DTI) and Japanese Embassy both revealed that despite the obstacles the two countries faced, particularly in 2011, Japan still became the fourth top investor in the Philippines with total investments of $1 million in 2012.
In 2013, Japan Credit Rating Agency said that the BPO industry is one of the major driving force of the country’s account surplus. This was affirmed by R&I Ratings, based in Tokyo, last year.
There are almost 70 Japanese firms which have already set up shop or outsourced some of their operations in the Philippines. It’s not only the big Japanese companies like Toshiba, Fujitsu or Epson but smaller Japanese companies are now also looking into this profit-driven business model.
Most of Canada’s investments from the recent years flowed into the BPO sector. In a workshop with Canada last 2014, DTI recommended the IT-BPO industry as one of the focus sectors for investment in Canada.
Among the few Canadian firms outsourcing in the country is Telus Corp. which employs more than 3,000 personnel in a massive call center. Telus originally considered India but selected the Philippines instead because the Indian market was already uptight during that time. The effective decision, which began in 2005, now has more than 40 clients which include several North American telecoms, cable and online video game companies.
Outsourcing country of choice: Philippines is a no-brainer
Mandaluyong City, Manila: Up-and-coming outsourcing location in Metro Manila, Philippines