Everything You Need to Know About the Philippine Call Center Industry

The Philippines and India have long been competitors in the BPO industry. However, the Philippines gained the upper hand after the $300 Million Indian Call Center Scheme.

Beyond the scheme, why is the Philippines a star player in the outsourcing business? Let’s take a look at the history of call centers in the Philippines to learn more!

A Brief History of The Call Center Industry in The Philippines

Like any success story, the Philippines has its fair share of humble beginnings before becoming an undisputed BPO leader. Below is a timeline that summarizes the key developments of how the BPO industry in the Philippines evolved to what it is today.

1992: Frank Holz established the first contact center in the country under the Accenture group. Call centers began as providers of essential services such as email response and service management.

1995:  The Philippine Congress passed the Special Economic Zone Act. The said act seeks to attract foreign investments to generate employment and bolster economic growth.

1999: Jim Franke and Derek Holley founded eTelecare—the first call center company in the country.

2001: The Contact Center Association of the Philippines (CCAP) was established. The association aims to promote the Philippines as a global leader in the IT-BPO industry.

2005: The Philippine BPO industry contributed 2.4% of the country’s GDP and gained 3% of the global BPO market.

2008: Most of the top U.S. BPO firms already had operations in the Philippines. In the same year, the country surpassed India as the number one BPO destination in the world.

2010: The Philippines was officially declared the world’s BPO capital. The call center industry generated $8.9 billion in revenue, expected to increase with a five-year CAGR of 38%.

2016 And Beyond: BPO jobs grew by 5.1% to 1.23 million. The local BPO sector reported $26.3 billion in revenues with 71,000 new workers. The pandemic forced local agents to opt for a work-from-home setup.

What Makes the Philippine Call Center Industry the Best in BPO Sector

So, what makes call centers in the Philippines the fastest-growing industry in the BPO sector? Let’s walk through several factors that have contributed to the exponential growth of the Philippine call centers:

Fluency In English

The Philippine call center industry is full of workers who speak English fluently with a neutral accent. Education First ranks the Philippines 27th in its 2020 English Proficiency Index (EF EPI), garnering a score of 562 out of 700.

Filipino call center agents are proficient in their intermediate and oral vocabulary skills. Americans may not even notice that they are talking with a Filipino representative over the phone because the English fluency of Filipino agents is similar to that of the US.

Exposure To Popular Western Culture

Foreign countries prefer to outsource jobs to the Philippines because it is receptive to Western culture. Due to colonization, Western influence has left its mark on many Filipinos’ lifestyles and purchasing decisions. This exposure makes it easier for Filipinos to relate to foreign customers.

Cheaper Labor and Operational Costs

The Philippines offers top-notch voice-enabled services at a lower cost than those other countries. The cost of labor in the Philippines is almost half that in the US or UK. Businesses use their cheaper labor rate to save on additional tertiary costs by not splurging on rent expenses and office equipment.

Moreover, outsourcing to the Philippines helps businesses cut employee benefits that add to their payroll expenses. This enables them to work with professionals without recurring gifts. Also, call centers in the Philippines take care of the expensive and tedious processes of hiring and training agents.

Strong Data Security Regulations

The Philippine government has enacted the Data Privacy Act.  This obliges call centers in the Philippines to protect personal data from unauthorized access.

Anyone guilty of violating privacy regulations can be jailed for up to 6 years and fined $20,000 to $100,000. The implementation of this act prompted foreign investors to grow their outsourcing initiatives in the Philippines.

Government Support

The Philippine government has extended its support to Philippine call centers. It does so by offering incentives such as tax benefits for foreigners looking to invest in the country. Under the Special Economic Zones Act, foreign companies that facilitate businesses in the Philippines can enjoy:

• Four-year exemption of corporate income tax
• Duty-free imports of equipment, supplies, and raw material
• Local tax exemptions and permits
• Permanent resident facilities for foreign investors and immediate family.

This governmental support attracts foreign investors and creates more Filipino’ jobs and opportunities.

Philippines Call Center Industry: Local BPO Destinations and Call Center Services

Call centers in the Philippines started in Metro Manila, However, it’s not the only place today capable of catering to the increasing needs of the BPO industry. Aside from Manila, other established BPO hubs include Metro Cebu, Metro Clark (Pampanga), and Bacolod City.

Apart from the cities mentioned above, businesses should also check out these New Wave Cities as announced by the Department of Science and Technology – Information and Communications Technology Office (DOST-ICTO) and IBPAP:

• Baguio City
• Clark
• Cagayan de Oro City
• Dagupan City
• Dasmariñas City
• Davao City
• Dumaguete City
• Lipa City
• Malolos City
• Naga City
• Sta. Rosa City
• Tarlac City
• Taytay City

Meanwhile, the following cities have shown high potential in talent, infrastructure, cost, and business environment. Therefore, they were announced as New Emerging Cities—or places that are likely to become Next Wave Cities:

• Balanga City
• Batangas City
• Iriga City
• Laoag City
• Legazpi City
• Puerto Princesa City
• Roxas City
• Tarlac City
• Tuguegarao City
• Zamboanga City

With the rise of many promising BPO destinations, businesses typically ask, “What are the most outsourced services in Philippine call centers?” The list includes:

• Technical support
• Telephone answering service
• Customer service
• Multilingual support
• Order taking management
• Reservation services

Outsourcing call center service isn’t limited to reservation and billing. Various industries can now leverage Philippine call centers for their goals.

Outsourcing Call Center Services to the Best Provider in the Philippines: Magellan

The history of the Philippine Call Center Industry is like a rollercoaster ride. It shows how the Philippines went from a newbie in the global outsourcing game to a total rockstar.

We’ve talked about the early days, the big moments, and the turns in this wild journey. But one thing’s crystal clear: the Philippine call center scene isn’t just about answering phones; it’s about how a whole country turned things around.

Do you need help outsourcing your call center services? Contact us today or fill out the form below for a free consultation!