Business process outsourcing in the Philippines

Business process outsourcing or BPO is an emerging industry in the Philippines.

Overview Main article: Business process outsourcing

This industry is regarded as one of the fastest growing industries in the world. International investment consultancy firm McKinsey & Company predicts that the demand for outsourcing services will reach $180 billion in 2010, with the customer contact services, finance and accounting, and human resource sub-sectors taking up the biggest shares. When it comes to the trend in primary business requirements, experts are seeing a shift from cost-effectiveness to skills quality and competence. This development all the more strengthens the Philippines’ position as an emerging global leader in the BPO industry (BPAP 2006).

The BPO boom in the Philippines is currently led by demand for offshore call centers. The Philippines raked in offshore service generating revenues of $2.1 billion in 2006, placing third behind India and China and slightly ahead of Malaysia. That’s up 62% over the $1.3 billion it gained in 2004, and a huge increase from the start of the decade when the outsourcing industry in Manila employed just 2,400 people and the industry had revenues of merely $24 million. It is estimated that 200,000 people are working in 120 BPO (mostly Contact Centers) in the Philippines in 2006. Overall, Philippine BPO is forecast to earn US$11 billion and employing 900,000 people by the year 2010 (Shameen 2006).

The recent growth spurt in the outsourcing industry in the Philippines has been fueled not by traditional low-value-added call centers but more higher-end outsourcing such as legal services, Web design, medical transcription, software development, animation, and shared services. Though call centers still form the largest part of the sector, the Philippines has begun leveraging its creative design talent pool, its large pool of lawyers, and its professionals in accounting and finance (Shameen 2006).

To achieve and sustain this rapid growth, the Philippine government is offering significant fiscal and non-fiscal incentives to attract foreign direct investment in these industries as part of the 2006 Investment Priorities Plan. The IPP was prepared by the Board of Investments (BOI), as the lead agency in promoting investments, focused on the sectors identified in the Medium-Term Philippine Development Plan (MTPDP) 2004-2010 (PBOI 2006).

Majority of the BPO facilities are located in Metro Manila, Cebu City and Bacolod City, although other regional areas such as Baguio City, Cagayan de Oro, Clark (Angeles City), Dagupan City, Davao City, Dumaguete City, Lipa City, Iloilo City and Legazpi City are now being promoted and developed for offshore operations.

The Philippines’ Center for International Trade Expositions and Missions (CITEM) report for 2004 cited the Philippines as among the top 10 choices for offshore operations. Consultancy firm McKinsey & Co has been tapped to draft a five-year roadmap for the country’s BPO industry.

Call Centre Industry in the Philippines Main article: Call Centre Industry in the Philippines

Call Centres or Call Centers actually began in the Philippines as plain providers of email response and managing services[1], these have industrial capabilities for almost all types of customer relations, ranging from travel services, technical support, education, customer care, financial services, and online business to customer support, online business to business support.

The call center industry is an up-and-coming industry in the Philippines. Business Process Outsourcing (BPO) is regarded as one of the fastest growing industries in the world.

The Philippines is also considered as location of choice due to its less expensive operational and labor costs.[2] In 2005, neoIT’s 2005 Mapping Offshore Markets Update ranked the Philippines as one of the top BPO destinations