India Losing Business to Offshoring Firms in the Philippines

BPO companies in the Philippines are expected to absorb an estimated $30 billion in BPO earnings from rival India, according to a report by the Associated Chambers of Commerce and Industry of India (Assocham). Assocham said that India has already lost half of businesses to foreign providers, reportedly valued at $25 billion.

Most of the businesses moved to the Philippines, which attracts investors due to a large, employable workforce that is fluent in English with American accents. Big global BPO providers like Convergys, Accenture, Teletech, Teleperformance, Stream and Sykes all have headquarters in the country that employ thousands of people. 

Assocham projected that up to 70 percent call center and voice services will be lost to foreign competitors, and that India might lose $30 billion in foreign exchange earnings to the Philippines. While India remains the world’s top BPO destination, Tholons’ latest top 100 list placed Manila as the second most attractive BPO location in the world, pushing Mumbai to the number 3 spot. Several Philippine cities also made it to the list, with Cebu City landing at number 8. 

The Philippines has been a call center stronghold since the beginning, with voice services accounting for 62 percent of total revenues in 2013, but the country is now starting to expand beyond its traditional voice and contact center offerings. 

A growing number of BPO companies are providing integrated delivery models, cloud-based services and higher-value added functions like finance, accounting, IT and software development to remain competitive in the marketplace.

From slightly more than a hundred thousand workers, the country’s BPO sector currently employs one million workers. The IT and Business Process Association of the Philippines (IBPAP) expects BPO revenue to hit $25 million by 2016 and the workforce to grow to 1.3 million people.