The Philippines is a top choice for foreigners looking to establish business process processing (BPO) companies outside of their home countries for many reasons.
The population is relatively large and young with excellent English communication skills, while the labor costs in the country are comparatively cheap. Add to the mix the open-arms approach to foreign investment and the national economy’s shift from agriculture to services and manufacturing and you have a country that ranks as one of the best places to create offshore BPO businesses in the world.
If you are interested in starting a BPO business in the Philippines, here are a couple of things to know.
Fast facts about business process outsourcing in the Philippines
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There are over 850 BPO companies in the Philippines according to the Philippine Statistics Authority (PSA). Majority of these firms are call center companies that offer IT or computer-related services.
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The Philippines has outranked India as the call center capital of the world. The industry, which is considered as one of the country’s highest foreign exchange earners, has generated over a million jobs in the country.
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The 2018 Tholons Services Globalization Index named six cities in the Philippines in their list of top outsourcing destinations in the world: Manila, Cebu City, Davao City, Sta. Rosa, Bacolod City, and Iloilo City.
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The most common types of business processes outsourced to the Philippines include call center services, data entry, human resource services, information technology or computer-related services, financial and accounting services, and procurement.
There is also a subset of BPO that is steadily gaining traction in the Philippines. Called knowledge process outsourcing (KPO), these services require in-depth knowledge and expertise. They usually deal in the healthcare, banking, digital marketing, legal, and animation and design sectors.
Government support for BPO companies in the Philippines
There are several perks and incentives foreign BPO companies can enjoy in the Philippines.
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The Data Privacy Act, which was legislated to comply with international privacy standards, ensures that personal information and other confidential data are well protected in the Philippines.
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Under the Special Economic Zone Act, foreign investors can enjoy tax holidays and exemptions, tax-free import of materials and other paraphernalia for business, and even permanent resident status if requirements were met.
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Registration and accreditation with the Board of Investments (BOI) and the Philippine Economic Zone Authority (PEZA) also come with an array of fiscal and non-fiscal incentives.
Things to consider when opening a BPO business in the Philippines
As you draw up the plans for your BPO company in the Philippines, take note of the following:
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Your competition in the industry
Identify BPO companies in the Philippines that serve your market or industry. Then, try and understand how they are using business process outsourcing to grow their company. This will give you some insight on how to manage your business and determine risks early on in the process.
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Processes to be outsourced
Outline the scope of work needed for your BPO company and identify which processes are to be outsourced or kept in-house.
It helps to provide detailed descriptions for each job or position so you can determine if outside help is needed. This will also help you decide whether your BPO company needs beginners with potential or highly experienced experts.
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The right location
Where you decide to build your BPO company affects not just its success. Having it located in a place with a significant talent pool and access to facilities and services will be beneficial to its growth. Certain locations (PEZA economic zones) also offer fiscal and non-fiscal incentives.
All things said, the costs of operating can also differ. Setting up a BPO company in urban sprawls such as Metro Manila and Metro Cebu might be more expensive than in Iloilo City or Bacolod City.
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Timeframes and deadlines
If the BPO company you’re setting up in the Philippines is headquartered in another country and serves a different market, time is one of the most important considerations.
Your company might need round-the-clock shifts or require most of its workforce to come in and work graveyard shifts if the market is located on the other side of the world. Take note of time zones, create schedules that take these into consideration, and set realistic deadlines that will leave clients and partners happy without compromising your employees’ well-being.
Setting up a BPO company in the Philippines can be one of the best business decisions you will make. Read about call center setups in the Philippines here or contact our team to learn more.
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