Written by: John Borillo on

The Philippines is undoubtedly among the highly-coveted regions across the globe as far as business process outsourcing (BPO) is concerned today.

Invest in the Philippines: Steady Growth, Stronger BPO Industry

The Philippines is fast becoming the country of choice for foreign investors wanting to take advantage of its phenomenal growth. The Business Process Outsourcing (BPO) Industry shines even brighter; i…

Over the years, the country has pulled off exceptional feat in client satisfaction and overall performance leading to great success for venturing foreign investors. It has been more than a decade since the first contact center was established in the country, and since then the industry has flourished and developed into one of the top targets of foreign companies investing in business process outsourcing. The Philippine contact center industry continues to grow significantly as clienteles from the U.S., UK, Australia and others are constantly flowing in these days. Evidently, investors all across the world find the Philippines as a perfect place to develop their business operations.

The figures disclosed by the Business Processing Association of the Philippines (BPAP) revealed that the Philippine BPO industry raked in $11 billion in 2011 alone. In addition to this huge accomplishment and growing demand, the Philippines have been also recognized as the Offshoring Destination of the Year by the National Outsourcing Association in the UK – thrice.

With voice-based job getting the majority of the country’s offshore services, the contact center industry in the country is regarded as the top call center target of investors today. The BPO industry remains consistent and continues to expand and provide services to its global clients. Moreover, it owns 10% out of the global BPO profits, which cost more than a $100billion. According to Tholson Investment Advisory Firm, the Philippines continues to be a worldwide leader in voice services. It develops into other areas at the same time such as IT, animation, and software and game development just to name a few. The call center business will most likely increase its earnings swelling up to US $16 billion. With these developments, the industry will continue to provide work for thousands of Filipinos this year.

From foreign investors’ perspective, what do they see in Filipino workers; or the Philippines in general? The nation dubbed as “The Pearl of the Orient” is naturally a charming place that could easily entice foreigners to visit the country because of so many great reasons. Apart from being blessed with a great number of breathtaking wonders of nature and tourist attractions, Filipinos are gifted individuals with exceptional skills and work ethics. Basically, Philippines is known to be significantly knowledgeable with the English language, which is very much noticeable on how fluent they speak the words naturally. In addition to this, and speaking of character, Filipinos are committed to work and super inherent friendly people. Aside from these remarkable thoughts on the country and the Filipinos, what other positive aspects foreign investors see in the Philippine call center market, and why are they tremendously attracted. Here’s an in-depth study as to why the Philippine contact center industry draw investors without fail.

The Key Reasons Why the Philippine Contact Center Industry Attracts Global Investors

Ideal Location

Strategic location is one big factor that lures investors to develop businesses. That’s why business owners love the country because it is located right in the heart of Asia (the fastest growing in the continent). Accessibility is the key. The Philippines is situated within four hours flying time from the main capitals of central Asia. It is a significant point of entry to more than 500 million people in the Association of Southeast Asian Nations (ASEAN) market and an access of international shipping and air planes appropriate for American and European businesses as it is sited at the intersection of the eastern and western business.

Inexpensive Operating Costs

Investors would allocate just enough funds when starting up a business before risking splashing a huge amount of budget. It makes a lot of sense if business owners choose Philippines as the site where they can develop their business and functions because of the low-priced operation expenses. And compared to other nations from Southeast Asia, the Philippines is known to have a cheaper cost of living – one of the many reasons why foreigners love to stay or visit the country over and over again.

Comparing salaries here and in the Western world, compensation in the Philippine contact center industry are just a fraction of what they are receiving, with only about $8 per day set as the daily minimum wage. Newly graduated employees with college degrees from highly regarded schools can be employed with a monthly salary at around $300. Lower costs also applies to other business operating expenses such as office space leasing, supplies, third party services, and utilities can be.

Here’s an overview on how investors could save up on their costs:

• 30-40% lower salary compared to Europe and the US, with a daily minimum wage of about 8 dollars a day

• 5–30% call center service savings

• 35–50% software development savings

• 50% lower electricity, telecommunication and utilities cost

Backed by the Government

The country has experienced series of political crisis in the past that caught up the business industry’s growth. Political instability will drastically discourage any investor to setup his business in such volatile setting. But the ghosts of the pasts have gone and the Philippines have moved forward to advancement. The country that has been held stagnant amidst the rise of its neighboring countries is now on the rise and rediscovered – the country was back on track. The business environment grew stronger and bigger, allowing more room for development and foreign investors.

For more than a decade, the Philippines has maintained stability and carries on to expand to greater heights. Although the country is facing other issues, the industry proves to be amplifying as time goes by. These have served to further expand the value of the Philippine business process outsourcing industry with the government supplementing the materialization of BPO operations time after time.

Highly Skilled, College-Educated Workforce

Filipinos value education as an invaluable wealth. And the numbers reveal that the country has a very high literacy rate of about 92% – thanks to the basic education made obtainable to almost the entire population. Highly- reputable schools such as the University of the Philippines (UP), Ateneo de Manila University, De La Salle University, and the University of Santo Tomas (UST) are institutions of higher education that consistently deliver graduates who notch top international positions. Furthermore, Filipinos are easily trainable. They are naturally fast-learners and eager to take on new challenges and going outside their comfort zones. Filipinos are naturally expressive and creative bunch that’s why most of them opt for courses like mass communication, arts, web design, multimedia arts, animation, and a lot more. There are several schools and colleges that offer exceptional education and training in these creative fields aside from the universities mentioned.

Several years before BPO operations landed on the country, the Philippines constantly had a difficulty providing work to the hundreds of thousands of fresh graduates and other unemployed citizens seeking for decent careers annually because of its weak local economy in the past that led to a significant fraction to find greener pasture abroad. But thanks to the rapid growth of BPO industry in the Philippines, it generated major opportunities to Filipinos and eventually reduced the number of Filipinos leaving the country for an opportunity overseas. BPO firms are having a hassle-free time seeking for highly-skilled employees here in the Philippines compared to the situation in India where companies are finding it hard to look for the right people for the job. Character and skills-wise, the Filipinos are the strongest candidates suitable for BPO’s nature of work.

Key features of Philippine workforce:

• Third largest English-speaking country in the world

• 92% literacy rate

• 400,000 college graduates produced per year

• Hardworking and Creative

• Adaptability to various work processes, lifestyles and cultures

Western Influence and Cultural Compatibility

Observing the way of life of the Filipinos and the society in general, clearly reveals that the country is strongly influenced by the Eastern region and pretty much compatible with the Western culture unlike other countries like China and India. Filipinos can be accustomed to any given situation, revealing their flexibility and versatility. Reviewing the rich history of the tropical country, the Philippines was once colonized by the Spaniards. After the Spanish colonization, the United States took over and ruled the country from 1899 to 1946. The U.S. left a huge part of their culture in which after their governance, the effects of the colonization are still evident until now.

Furthermore, movie theatres and television are practically devoted completely to American productions. The programs and films are shown in English only, and subtitles weren’t available.

Even though the official language is Filipino, English is the main language for business and education in the Philippines. The Philippine government has thought about altering the official language from Filipino to English because of the fact that it used on broadly, considering most people from different countries around the world knows the language. With the great influence of the US, the Philippines had developed a government that is rather similar to the system the United States are following. As a result, this makes foreign business owners; specifically the companies in the Western side feel more comfortable developing their business in the Philippines.

Expanding and Stable Economy

Companies are willing to invest in a healthy and established working environment, given the economy is stable and moving ahead. Foreign investors have seen the potentials of the Philippine BPO industry and what can it accomplish in order to achieve success. Potential clients as well are attracted to the growing economy of the Philippines, which was paved even stronger by the evident success of the Philippine contact center industry over the years. The government completely supports the endeavors of the Philippine BPO industry because it has developed into one of the main profit generator of the country. As a matter of fact, they have arranged special economic zones and set up a Philippine Economic Zone Authority and grant financial and non-financial incentive such as a 4 to 8-year income tax holiday to business process outsourcing companies. Even India’s service providers, which is among the major options for business process outsourcing, has established business operations in the Philippines for the past several years.

The Philippines is well-positioned to develop into one of the most excellent offshore outsourcing destinations worldwide. In addition, Metro Manila gets the highest concentration of business process outsourcing activities with a whopping 80 percent. However, other major cities and provinces are also joining the BPO scene, emerging as an ideal option to become perfect IT-BPO hubs where additional companies can develop and run their business operations. Areas like Cebu, Davao, Bacolod, and Pampanga have shown great potential to be great options to Metro Manila with their team of English-speaking and skillful talents and beneficial business environment. These regions are dubbed as the Next Wave Cities of the Philippine contact center industry. A large part of the country’s success in the BPO industry is owed to the efforts of the Business Processing Association of the Philippines (BPAP). The association plays a significant role in endorsing the Philippines as the best location of choice. BPAP also provide constant support to the BPO players. BPAP is working together with government agencies to improve the education system even further since the industry is mainly driven by skills and talent. They are as well applying industry-specific training courses to sharpen the raw talent and skills of Filipino workers and make them apt for business process outsourcing nature of work.

The proof of accomplishments of the Philippine BPO industry can be seen everywhere in the Metro Manila and in some other progressing provinces and small cities. BPO companies are everywhere in Metro Manila such as Magellan Solutions and several well-known companies who chose to settle in the Philippines. As the country strengthens it economic power, it has achieved a new reputation as the chosen BPO destination, “the One,” a perfect source of extremely trained labor workforce, and of course – the home of the friendliest and most accommodating people in Southeast Asia… or let’s say, the world. Now that is why everyone is attracted to the Philippines.