Philippines attracts US outsourcers - American English proficiency, low costs

By Subhankar Kundu @ Friday, May 16, 2008 9:16 AM

Section - Outsourcing/BPO

The Philippines is proving to be the next big destination for the global Business Process Outsourcing (BPO) market after India. The BPO industry started there around 2000 and now it is the biggest contributor to the country’s revenue and employment. In 2000, there were just 2,400 BPO professionals and now there are more than three million.

According to a report published by the country’s Department of Trade and Industry, the Philippines BPO industry generated revenue of $5 billion in 2007. Industry experts forecast the industry to generate more than a million jobs and over $12 billion by 2010.

English language proficiency and sound IT skills among the Filipinos, low labour costs and availability of proven technology are the main factors behind the country’s tremendous growth in BPO.

Unlike India, the lower attrition rate is an additional factor. BPO professionals get an average monthly salary of $300. Given the country’s employment status, the salary is fair enough for a Filipino to take it as a long term profession.

A study also shows that the Philippines has large numbers of skilled workers.
Filipinos are highly proficient in American English and its US colonial background paves the way for a similar kind of education system that is attractive to US companies.

The Manila business districts are mainly home to call centres, but with the spread of Internet technology in the country, many outsourcing services providers have recently established their operations outside Manila. Quite similar to India, the BPO centres there provide technical support, customer care, and sales & marketing across different industry verticals.

Some of the major global clients like Microsoft have shifted their support from India to the Philippines. Sources close to Convergys, a global BPO player, said that recently, Microsoft moved some functions from Convergys Bangalore to its Philippines centre.

With the BPO industry rapidly growing in the Philippines and global clients showing their interest in the country’s investor-friendly environment, competitors like India needs to ponder upon its human resource factors and come up with effective business models. X