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Why Partner with an Outsourcing Company in the Philippines

by: Admin

Monday, July 31, 2017 |

In 1992, the first contact center was built in the Philippines, and the special economic zone was established in 1995 to encourage foreign companies to base their customer support centers in the country. Since then, many call centers and outsourcing companies have started operations in the country and flourished.

Today, the Philippines is hailed as one of the top BPO destinations in the world, ranking 2nd after India. The BPO industry is growing at a rate of 15 to 18%. At this rate, the BPO sector will soon become the biggest GDP contributor.

Benefits of outsourcing to the Philippines

The success of the BPO industry is owed to the many advantages that the dynamic country offers its investors. Let's look at the benefits of partnering up with an outsourcing company in the Philippines.

Cost Efficiency

By partnering up with an outsourcing company, you can save approximately 60% to 80% in operational costs. This cost efficiency can generally be attributed to the low cost of living in the Philippines.

According to a consumer price index (CPI), the Philippines is a low-cost country compared to most western and Asian countries such as the US, UK, Australia, Singapore, and China.

In the Philippines, the salary of fresh graduates only amounts to a fraction of what newly graduated employees in the West would receive. The hourly salary of a regular employee in the US or Europe may be the daily salary of a Filipino professional.

Cultural Compatibility

The Philippines was colonized by Spain, and then by the Americans, followed by the Japanese. The impact of the country's colonization history is still evident in today's generation. Filipinos easily adapt to foreign culture as the English language and Western culture are deeply entrenched in its citizens' everyday lives.

Filipino culture today is greatly influenced by past colonizers and popular television shows, music, and theater from the West. In addition, hospitality is an important part of Filipino culture and tradition, making the Filipinos easy to work and socialize with.

English Proficiency

Seventy percent of the Philippine population are deemed fluent in English. Most children are taught the language even before they start schooling, and it's further reinforced when they enter pre-school.

English is the medium of instruction in schools and the primary language used in business. In the 6th edition of EF's English Proficiency Index, the Philippines ranks 13th out of 72 countries in terms of English proficiency. The same English Proficiency Index also revealed that the Philippines ranks as the 3rd (out of 19) country in Asia that’s best in English, after Singapore and Malaysia.

Highly Skilled and Available Workforce

The Philippines boasts a large and young population that's growing faster than the retired workforce and dependent children, with a median age of 23 years old. This results in an abundant supply of manpower and highly educated workforce with a literacy rate of 97.5%.

Every year, colleges and universities in the Philippines produce more than 500,000 graduates—contributing to the pool of qualified and skilled workers. According to experts, the country will continue to enjoy the advantages that this young and talented labor force brings for the coming years.

Economic Growth

The Philippines is enjoying a robust economy, as Filipino people have stronger purchasing power according to the 2017 KPMG Philippine Consumer Market Report. This goes together with the increase of remittances from Overseas Filipino Workers (OFW) and the BPO sector both contributed to the country's GDP growth. Foreign investors can benefit from an emerging market in a business environment that’s ideal for growth and scalability.

The economy is growing despite certain issues such as poverty afflicting the country. The country has a strong consumer market for goods and services that attract both local and foreign investors. This large market is fueling the growth of the Philippine economy.

Track Record, Scale, and Maturity of the BPO Industry

Business process outsourcing started in the Philippines way back in 1992. Its history spans 25 years, with the BPO industry revenue growth increasing ten-fold since 2004. More importantly, the current global market share is at 10%, which has increased three times since 2004. By 2022, the global market share is projected at a whopping 15%.

Accenture, People Support, Convergys, and Sykes Asia were the first multinational companies to hold operations in the Philippines. They have since multiplied their operation sites and offices to include other cities in the country, such as Cebu, Davao, Bacolod, and more. Indeed, the Philippines has a track record of providing quality business process services at lower costs.

Government Support

The BPO sector is one of the top contributors to economic growth in the country, which is why the local government strongly supports it with incentives and regulations that can encourage companies to choose the Philippines as its offshore location.

Such incentive includes the establishment of special economic zones (SEZ) and the Philippine Economic Zone Authority (PEZA), and the fiscal and non-fiscal benefits like the 4-year and 8-year income tax holiday.

Furthermore, Department of Information and Communications Technology (DICT) Secretary, Rodolfo Salalima, confirmed that the local government would continue to support the BPO sector through the Philippine lT-BPM Roadmap 2022, which has a goal of reaching $40 billion in revenues and 1.8 million more jobs for Filipinos by 2022.

Fringe Benefits

Your business can opt for a "follow the sun" workflow so that your onshore operation begins when your outsourcing company ends theirs. This ensures an onshore-offshore delivery cycle for faster production and a significant reduction in your process development duration.

Wrapping It Up

Offshore outsourcing can be a great strategic move for any company and the Philippines is one of the best destinations for this business endeavor. The Philippines offer companies the opportunity to monumentally grow your business at much lower costs. It has developed through the years to become one of the top outsourcing destinations in the world. It boasts of both natural resources and talented workforce that you can leverage for the success of your business.

Whether you need contact center solutions, IT support, website development, or creative services outsourced, you won’t go wrong in choosing MicroSourcing as your offshore operations partner in the Philippines.

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