Outsourcing Services


Outsourcing Services to the Philippines: Why you should do it?

In 2007 and 2009, the Philippines won the Best Offshoring Destination of the Year Award from the British organization National Outsourcing Association (NOA). Indeed, the Philippines is fast becoming one of the top outsourcing services destination in Asia, as likewise reported in international studies done by Tholons, a strategic advisory firm for global outsourcing and research, and the Everest Research Institute, an independent research and analysis organization that serves as a central source of IT- and BPO-related information. Here are the top reasons why the Philippines is consistently acknowledged as a key player in the BPO industry:

Highly Skilled Workers with Wide Grasp of English Language and Western Culture

History-wise, the Philippines has been well-immersed in Western culture, having been an American colony for 47 years. The English language is also the major mode of instruction in most schools and universities, which can account for the Filipinos’ excellent command of the English language, especially in reading, writing, and speaking. An American-based education system is also widely followed, and the academic curriculums of the major universities are at par with those abroad. Philippine universities produce about 400,000 graduates every year, and Filipinos are known to excel not only in IT-related fields but also in the sciences, arts, and humanities.

With the advent of cable TV and the internet, Filipinos also now have access to most television shows, news and sports channels, and movies that are aired globally. Because of Filipinos’ almost inherent grasp of American culture, the language, and its nuances, they absorb the mass media in English without needing subtitles. English is also used not only in business and academic settings but also in day-to-day conversations. This gives the Philippines an edge over its Asian competitors on the outsourcing services industry, such as China and India, with the Filipinos’ full-fledged capacity to competently handle voice-based and non-voice interactions with foreign English-speaking clients.

Outsourcing Services Reduces Costs

Outsourcing to the Philippines definitely costs less than in Europe and the United States. Metro Manila is currently the best place to set up your offshore team, being well-equipped with the necessary technical infrastructure and a modern city environment.

However, there are lots of other cities that are slowly emerging as feasible offshore locations, such as Clark, Cebu City, and Davao city. Cost of real estate, rent, and fares are also set at a fraction of the price—across the board—compared to other Asian countries, which translates into lower operational costs for your business.

Economic Growth and Government Support

Foreign investors are once again recognizing the potential of the Philippines as an investment location. Business process outsourcing in the Philippines is being projected to earn between $11 billion to $13 billion and is expected to hire 900,000 additional workers for the year 2010. As part of the 2007 Investment Priorities Plan to achieve and sustain this rapid growth, the Philippine government is offering significant monetary and non-monetary incentives to encourage and entice foreign investors in these industries. Special economic zones are being developed in numerous parts of the city and are being put in place to serve as central hubs of activity, where the agricultural, industrial, commercial, and recreational aspects of everyday life can work together.

Also, since 1998, corporate income tax has been lowered to 32 percent (from 34 percent), with enterprises situated in the economic / export zones being taxed at only 5 percent of the overall tax rate. With the abovementioned factors in consideration and the enthusiastic support of the local government, it’s not hard to see why the Philippines keeps attracting foreign businesses to invest in the country through outsourcing services.