Why Us
Outsourcing to the Philippines
The Philippines is regarded as the business process outsourcing (BPO) engine of Asia, consistently ranking among the most attractive offshore locations for companies around the world. With global demand for BPO services hitting $350.2 billion in 2023 and growing at an estimated compound annual growth rate of more than 5% into 2027, there are several compelling reasons why companies have been shifting their processes to the Philippines rather than to other destinations or keeping them onshore.
Compatible cultures
Whether your outsourcing project involves customer service, sales, or even application development, effective communication and mutual understanding between your outsourced staff and your customers or local employees will be critical factors in your success. In addition to superior language skills, your outsourced staff must possess natural sensitivity to your local culture. This is an area where the Philippines outshines other outsourcing destinations.
English pervades every aspect of Philippine society, from television and movies to education and government. Instruction in most schools is carried out primarily in English. Because of the US and the Philippines’ strong historical ties, Filipinos have a strong affinity to Western culture. As a result, Filipinos speak English with a pleasing, neutral accent, and they possess a deep and natural understanding of Western culture.
These attributes, combined with Filipinos’ warm and accommodating nature, make it easy to create an offshore Philippine team that mirrors the culture and values of your onshore operation, one that can immediately function as a seamless and transparent component of your overall business.
Low costs
The engine that propels the outsourcing industry in any emerging economy is its lower cost of doing business. The Philippines excels in this area, especially with regard to labor costs. The minimum daily wage in the Philippines is approximately $10, and the starting salary for college graduates from good schools begins at around $340 per month. Salaries in the southern part of the country tend to be slightly lower than in Manila, which offers the largest pool of skilled workers with high English proficiency.
Other products and services that benefit from low labor costs, such as office rental, professional services, office supplies, food and lodging, are quite reasonable in the Philippines. Taxes and health care costs are likewise much lower than in developed countries. However, cost savings are not as great for products that must be sourced from abroad, such as computers, and for telecommunication services such as Internet access.
Still, a company can expect to save over 50% on staffing costs by outsourcing to the Philippines.
Highly educated, highly skilled staff
Approximately 600,000 new graduates of the Philippines’ world-class higher education system enter the job market each year. On top of that, Manila boasts a robust professional certification and continuing education system, providing developers and other skilled workers with additional qualifications such as Microsoft and Cisco certifications, as well as sales and customer service training. It is possible to find staff with virtually any specialization in the Philippines.
Many of the world’s leading high-tech companies such as Amazon, IBM, Dell, Samsung, and Texas Instruments have made large investments in their operations in the Philippines, which is why many job candidates have extensive experience in multinational corporations producing work that meets the highest international standards.
Until the emergence of the BPO industry in the Philippines, the local economy could not support the thousands of skilled and highly talented workers who enter the workforce each year, forcing them to join the millions of other Filipinos currently working overseas, far away from family and friends. The result is a pent-up demand for skilled positions that creates a positive environment for BPOs looking to hire skilled workers. This is in stark contrast with other offshoring centers such as India where finding and keeping employees is a serious challenge.
Economic growth and stability
The World Bank’s forecast for the Philippines sees the country maintaining its momentum as one of the fastest growing economies in Asia. Economic growth is expected to average 5.9% from 2024 to 2026 on the back of robust domestic demand, strong growth of the services sector, and improved trade.
In November 2024, the government signaled its continued support for the BPO industry with the signing of the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy (CREATE MORE) Bill. Designed to attract more foreign investment to the country, the new law reduced the corporate income tax rate and enhanced the tax incentives enjoyed by BPO companies. The current administration also launched the Philippine Digital Infrastructure Project, which aims to boost broadband connectivity nationwide and strengthen the country’s cybersecurity framework.
Despite sustained economic expansion however, strong population growth will continue to keep per-capita income in the Philippines below the level of many of its neighbors. Therefore wage inflation will be moderately suppressed for the foreseeable future. The Philippine peso is also expected to remain somewhat weak, counteracting inflationary pressures for BPO clients.
These trends, coupled with ongoing efforts on the part of the local BPO sector to expand its offerings to high-value added services, will further fortify the Philippines’ position as a premier outsourcing center.
