Outsourcing to the Philippines

With costs rising for many businesses, companies are looking for ways to save money and lower costs. Outsourcing may be the best way to do just this. The Philippines has recently become an important destination for international companies wanting to outsource their call centers. For many years, India has been a top choice country for outsourcing but the tides are beginning to change. With high number of fluent English speakers coupled with clear and neutral accents, the Philippines has attracted many companies that are looking to outsource their call centers.

Recent research directed by IBM shows there are more call center agents in the Philippines than there are in India. About 350,000 Filipinos work in call centers, compared to 330,000 Indian workers. However, many of the call center operations moving to the Philippines are essentially offshoots of companies in India and are even managed by Indian workers. Workers in India have higher management skills with more experience and expertise required to operate the outsourced call centers in the Philippines. Many company executives have discovered the perfect recipe for business success by moving the voice-based services to the Philippines while keeping other parts of the industry, such as human resource management and accounting, in India. In other words, Indians are beginning to outsource some of their outsourcing to the Philippines. The statistics clearly show India as the top country for outsourcing. Last year, India’s overall business process outsourcing (BPO) revenue was $70 billion compared to $9 billion in the Philippines.

Expanding non-voiced based services is the next step for the Philippines’ BPO sector and has become a major priority for the Philippine Department of Trade and Industry (DTI). The department estimates that there will be more than a million jobs in the sector within two years and that the revenue generated will double by 2016. The Philippines’ government is looking to encourage international companies to outsource by not charging these companies income tax for the first four years. Additionally, there will be no custom duty charges on equipment brought into the country by these outsourcing companies. Ultimately, the most important requirement companies are looking for in the Philippines is a skilled workforce. For this reason, the government has begun working with universities to incorporate call center training into the curriculum. Time will tell if the Philippines has what it takes to become the top destination for international companies looking to outsource business operations.