Outsourcing Philippines: Economic Bright Spot

Submitted on: 03 Jul 14

Category: Blog,bpo

The cities of Manila and Cebu are on the list of world’s top 100 best outsourcing destinations for 2014; Manila ranks second, while Cebu is in eighth place on the list. Others in the top 10 are the Indian cities of Bangalore, Mumbai, Delhi, Chennai, Hyderabad, Pune; Krakow in Poland; and Dublin in Ireland. Other Philippine cities on the list are Davao (69th); Sta. Rosa, Laguna (82nd); Bacolod (93rd); Iloilo (95th); and Baguio (99th). Cities were ranked by Tholons, Inc., a leading American globalization and investment advisory firm.
Manila is a preferred site for information technology-business process outsourcing (IT-BPO) firms because of its ample pool of educated workforce as well as technological infrastructure. Data from the Commission on Higher Education showed that most of the human resources needed by the outsourcing industry is in Manila and nearby cities, especially graduates of engineering, technology, mathematics, computer science, business, communication, arts and science.
The BPO industry in Cebu City, mostly call centers, employs an estimated 95,000 workers. The industry is rapidly growing in the city because of its policy environment and fiscal incentives, college-educated human resources, infrastructure and advanced connectivity.
The Philippines is a top destination for IT-BPO because of its advantages over other Asian nations: cheaper labor costs; English-speaking workforce; modern infrastructure such as water, power, roads, telecommunications; large pool of college graduates; and good environment for expatriate trainers and managers. Data at the Bangko Sentral ng Pilipinas showed the BPO sector generated $13.3 billion in export earnings in 2013; this year, BPO earnings are estimated to grow by 15% to over $15.3 billion. Government and industry leaders target a workforce of 1.3 million and $27 billion revenues by 2016.
The country’s information technology-business process outsourcing consists of contact center services; back offices; medical, legal, and data transcription; animation; software development; engineering design; and digital content. Dominated by call centers, the sector has grown to be an economic bright spot. A big number of global corporations have transferred some of their non-core, labor-intensive and information technology-enabled business service jobs to the Philippines. Voice-based contract support services is a pillar for the local outsourcing industry; the Philippines dominates the voice sector, and is second to India in knowledge process outsourcing.

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