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The Philippines as Emerging KPO Hub

by: Karen Cayamanda

Thursday, March 25, 2010 |

Knowledge Process Outsourcing (KPO) Philippines

The Philippines has long been established as an ideal destination for voice outsourcing, due to the country’s large pool of English-speaking workers, affinity with Western culture, IT infrastructure, government support, and lower operational costs. The call center sector is rapidly growing - call centers are being established not only in greater Manila area but also in other cities and provinces considered as emerging locations which are suitable for voice-based BPO work. Also, it was reported that the call center sector posted US$5 billion in revenues in 2009.

After securing a place in the world of voice outsourcing, the Philippines is poised to tap the knowledge process outsourcing (KPO) sector and become an excellent alternative for KPO tasks. As recent trends suggest, the country is now emerging as an ideal destination for business processes that require specialized skills. In a research report published by outsourceportfolio.com, it is expected that revenues of the Philippine BPO sector would reach US$9 billion this year - from US$7.3 billion posted in 2009.

The report also shows that 52 percent of survey respondents think that it is safer to outsource to the Philippines compared to India. Eighty-one percent (81%) said KPO is a “high growth prospect”, although 54 percent feel that the lack of enough workers suitable for higher-value outsourcing tasks is a major problem.

It is a known fact that the outsourcing industry is one of the key drivers of the Philippine economy, especially during the recession, which is why the government is taking steps to make the country suitable for outsourcing work - both BPO and KPO. For instance, BPAP, the umbrella organization for outsourcing players in the country, recently launched a competency test designed for college students and applicants who wish to enter the outsourcing workforce, streamlining the recruitment process in the industry. Various locations outside Metro Manila are also being considered ideal outsourcing destinations due to better IT infrastructure, lower costs, and availability of skilled workers.

While the country produces a lot of graduates annually, many individuals usually do not have the skills needed in higher-value business processes. This will be a major stumbling block for the Philippines if it aims to be an ideal KPO hub. The results of the May elections may also have an impact on the state of the outsourcing industry.

There may be obstacles, but with the current growth rate and initiatives from the government, it is likely that the Philippines will be able to establish a strong hold in the global KPO sector.

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