Why Outsource to the Philippines: The Path to Successful Offshoring

Published by Mike Dershowitz on

why outsource to the Philippines

Economy, culture, education, and accessibility combine to make the Philippines one of the most exciting emerging stages for the outsourcing market. Comparable to and in fact often outstripping its Western competitors in terms of labor and cost efficiency, the Philippines provides an ideal environment for BPOs.

1. An Abundance of Highly-Qualified People

The Philippines has an accessible and highly skilled workforce, with approximately 90% of its population of 101,498,763 under the age of 55. One of the most highly educated countries in Asia, the Philippines has a literacy rate of 95% (compared to India’s 71.2%). The country produces approximately 360,000 college graduates every year, many of whom obtain degrees in computer science, marketing, and business administration.

2. Effective Cost Reductions

The Philippines is home to a labor source with the same high level of experience and skill as that of Western countries, at a fraction of the cost. For example, the estimated salary of contact center agents in the Philippines is 14-20% less than their Western counterparts (Outsourcing Malaysia, 2011).

3. English Language

With English as its national language, the Philippines is the 3rd largest English-speaking nation in the world and has more English speakers than the United Kingdom and Canada combined. The Philippines is particularly appealing to customer service providers because of the neutral and easily understood accents of its people.

4. Culture

Due partially to its colonial past, the Philippines is recognized by many analysts as one of the most westernized Asian markets. Relations between the Philippines and the West are friendly and secure, and Western media is prevalent in the Filipino culture. The unique mix of similar cultural values and the widespread use of the English language fosters a thriving environment for BPOs.

5. Legal Environment

The legal environment of the Philippines promotes economic growth and is very favorable for BPOs. The Filipino government consistently supports the emergence of outsourcing operations. Numerous leaders have aided the rapid growth of the BPO industry through investment incentives, providing investments in education and resources for training. The government has invested in the overall infrastructure of the Philippines, creating a rival to established outsourcing markets such as India and China, and setting it up to become the premier outsourcing destination of the world.