BPO and the Philippines

In 2015, the Philippines made news for overtaking India as the call center capital of the world. While the country still lags behind India in overall IT outsourcing services, its Business Process Outsourcing (BPO) industry continues to see tremendous growth, and now employs over 1 million Filipinos nationwide.

Call centers or voice services are just part of the entire spectrum of services that make up the BPO industry. Other industry sectors include:

• Software development

• Animation

• Game development

• Medical transcription

• Engineering design

• Knowledge process outsourcing and back offices

While the country still lags behind India in these other sectors, it is steadily closing in in terms of revenues and headcount.

The Philippine advantage

The Philippines has inherent advantages over other countries that make it an ideal BPO hub. These include:

• Fluency in English – the Philippines is the third-largest English speaking country in the world. English is a medium of instruction in schools, and, along with Filipino, is the official language in business and the government

• Compatibility with Western culture – the Philippines’ long colonial history, first under the Spanish and then the Americans, has richly infused the culture with influences from these two Western colonizing powers. Interaction with other cultures through trade and commerce has also made Filipinos highly adaptable to other cultures – a trait that now works very well when dealing with customers from other countries.

• Relatively lower labor costs – compared to other Asian countries, labor costs in the Philippines are generally lower.

• High ethical standards and good empathy – the Filipino culture emphasizes good values, which are instrumental in shaping Filipino workers’ high ethical standards. Filipinos are also inherently warm and hospitable, and empathizing with customers comes naturally to them.

• Government support – the BPO industry has proven to be a major contributor to the Philippine economy. Recognizing the country’s potential in this area, the government has devised programs to encourage investments in BPOs, offering such incentives as tax holidays, simpler business processes, less restrictions on importation and the hiring of non-residents, and a national roadmap outlining future plans and programs for the industry.

• Cheaper office rates – compared to other Asian cities like Mumbai, Delhi, Bangkok and Taipei, rent in Manila is as much as two-thirds less.

What’s next for the BPO industry?

While the country is apparently on the right track toward achieving further growth in the BPO industry, more work needs to be done to establish its supremacy. Some of these are as follows:

1.  Developing a skilled workforce.The IT & Business Process Association of the Philippines (IBPAP) has called on strengthening the supply chain. As more BPO opportunities are introduced in the Philippines, the country should have the ability to provide the skilled labor these jobs demand. The IBPAP is working with the Commission on Higher Education to grant more scholarships and offer more service management programs to help grow the workforce.

2.  Developing more BPO hubs. At the moment, the largest BPO hub in the country is Manila, with Cebu and Davao coming in a distant 2nd and 3rd. In contrast, India has several fully developed hubs, including Mumbai, Bangalore, Delhi, Chennai and others.

3.  The IBPAP has also called for technical support in such areas as electrical supply and infrastructure.