6 Reasons Not to be Afraid of Outsourcing to the Philippines

Published by Fair Trade Outsourcing on

One of the questions that companies want to be answered about outsourcing is whether the Philippines would be a great place to outsource to, or will it present too much of a risk for them. If you’re thinking of outsourcing to the Philippines, here are six reasons why you should not fear making that decision.

1. You don’t have to worry about the quality of software and hardware technologies available in the Philippines.

Because of the unprecedented growth of the IT-BPM industry in the Philippines, Rappler notes “ICT innovations, such as higher broadband speeds ranging from 20-45 Mbps for voice and as high as STM-1 155 Mbps for non-voice, were introduced through the BPO sector’s rigorous global requirements.” Now, this technology is slowly becoming mainstream in other sectors, such as banking and education.

The technology used in the private sector is updated regularly to keep up with the changing landscape of information technology. Now that a data privacy law is in place, outsourcing companies are now diligent in protecting their digital information from current and future technological threats. Patches are applied as soon as they’re available and upgrades are implemented after much consideration and careful planning for a smooth transition.

For companies outsourcing to the Philippines, it will be easy for them to import new technology they may need for their business. The Philippines has been a top trading partner of the United States for many years. The shipping fees plus the taxes may cost a bit, but the ease of transporting the goods by air or water is an advantage.

2. Economic growth has been steadily rising. Fiscal policies established during the Aquino administration remain strong. The Duterte administration promises to keep the economy stable despite the controversies surrounding his presidency.

The Philippine economy grew by 6.8 percent on average in 2016, according to the National Economic and Development Authority (NEDA). It only slowed down in the last quarter of 2016 and in the first quarter of 2017 due to a government in transition after the elections.

Reuters says that “Duterte has promised to spend up to $180 billion over six years to build and modernize railways, airports, seaports and roads” to make sure the economy’s growth is sustainable and inclusive. The government believes that this would further economic growth and it would “help offset the impact of protectionist U.S. policies on remittances from overseas Filipinos and on American investment in business process outsourcing to the Philippines, a vital sector for the economy.

3. Outsourcing to the Philippines is a safe decision because identity theft and other data security problems are practically non-existent in the Philippines.

Nation-sponsored surveillance and hacking rarely happen in the Philippines. But other outsourcing destinations, such as India, China, and Vietnam, have been among the top countries where most cybercrime incidents originate. Cybersecurity company Symantec identified these places as among the top 10 countries that were the biggest sources of malware, spam and phishing attacks in 2016.

As of 2016, only 43.5% of the country’s population is connected to the internet, and fewer Filipinos use online banking apps to manage their finances and send payments for their bills and online purchases. This means there are fewer targets available for identity thieves.

For outsourcing companies that handle sensitive information for their clients, the existence of a data privacy law, stringent policies on devices used inside offices, and the inherent trustworthiness of Filipinos contribute to the overall attractiveness of the Philippines as an outsourcing destination.

4. Filipinos have been immersed in western culture from the time they were old enough to watch TV and learn their ABCs.

Becoming a small U.S. colony was the impetus that pushed the Philippines to adopt a more western outlook. The country practically created their constitution to match that of the United States and organized their education system to meet the standards of American colleges and universities.

Being a close trade partner and political ally of the United States has made the Philippines a top consumer of all things American from imported goods and services to different forms of entertainment. So, Filipinos are constantly aware of the current pop trends in the US and other English-speaking nations.

5. Filipinos haven’t lost touch with their cultural identity despite being colonized for a long time.

They remain respectful of community elders and people of authority. They’re a caring and forgiving people who are kind and empathetic to others. They can easily integrate with other cultures; they rarely experience cultural conflict. These are essential traits to have for a job that requires daily interaction with different people from all walks of life.

6. The Philippine education system continues to evolve and adapt to the needs of their students.

Many colleges and universities have begun working with companies to provide courses that will fill in the gaps in the technical and communication skills of the incoming generation of graduates.

The Commission on Higher Education or CHED, in partnership with the Business Processing Association of the Philippines (BPAP), has been advocating for the Service Management Program (SMP). This 21-unit program aims to prepare students for employment in the information technology-business process management (IT-BPM) industry. So far, there are 17 colleges and universities that have adopted this program into their curriculum since its inception in 2014.

Outsourcing companies are not only found in Metro Manila and neighboring areas in Luzon. The IT-BPM industry has been expanding its reach to the provinces. There’s a continuous supply of young talented professionals from other regions in the country. The economic growth seen in the provinces is a result of this.

Aside from improving the collegiate curriculum, the Philippine government also continues to collaborate with the Technical Education and Skills Development Authority or more popularly known as TESDA. This government-funded agency has provided “remedial training for applicants to the industry in many key sectors, including animation, customer relationship management, software development, healthcare information management, and game development.” They also provide special remedial classes for trainers and educators in the Philippines.