BPO in the Philippines

BPO in the Philippines
www.staffvirtual.com
+1 310 496 8009
contact@staffvirtual.com
sales@staffvirtual.com

Business Process Outsourcing in the Philippines are on the rise In the current
uncertain economic environment brought on by the global financial crisis. Companies
of all sizes and in all industries must adapt and innovate to become more efficient
and cost conscious. Strategic partnerships with quality outsourcing providers is more
important than ever. Outsourcing can improve operational efficiencies and give a
competitive advantage while reducing labor costs.
BPO IN THE PHILIPPINES SV

Many outsourcing providers are located oﬀshore, in other countries where wages are
less than that back home. The Philippines is one such country. Labor rates in the
Philippines are extremely attractive to entrepreneurs, as is their large, college
educated, English speaking workforce. Outsourcing to the Philippines is increasing in
frequency and scope.

The Philippines just became the “call center of the world”, employing over 500,000
Filipinos, compared to India's 330,000 call center workers. The BPO industry is the
fastest growing sector of the Filipino economy, already employing approximately
1.2M professionals. Revenues are projected to increase sharply in the coming years
as companies outsource more complex and creative business processes.

According to the Business Processing Association of the Philippines, the Philippine
BPO industry is expecting 2010 revenues of approximately $9 billion, and total BPO
revenues could increase to a staggering $25 billion by 2016. This white paper will ﬁrst
explore the major reasons why companies are outsourcing business processes in
general, allowing them a great ROI on their payroll dollars. The paper will then
explore why the Filipino outsourcing industry is experiencing rapid growth.
Outsourcing to the Philippines allows companies to quickly tap into the talent pool
and gain a greater ROI from their workforce.
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Why is the Philippines becoming globally recognized as the ideal country for ﬁnding
highly skilled professionals who speak great English? What is behind such
astonishing growth in virtually all segments of the Filipino BPO industry? What are
other reasons for the impressive gains enjoyed by the Philippines BPO industry?
Here are ten reasons why.

One of the main benefits of tapping into the Filipino, IT and BPO workforce is the
relatively low labor cost, when compared to similar specialists in other markets. Labor
costs, compared to those of other developing nations such as India, have not
increased much in the Philippines in recent years. Salaries for IT professionals, tech
support and call center support representatives are significantly lower than in the
USA, Canada, Australia and Europe.
For this reason, even leading Indian companies, such as Tata Consultancy Services,
the IT services and BPO arm of India's giant Tata Group, opened its very first BPO
center in Southeast Asia this year in Bonifacio Global City, Taguig.
Labor Costs

The Philippines is a highly westernized culture, largely as a result of it being a
protectorate of the United States for nearly 50 years. Filipino culture is a combination
of Eastern and Western cultures, and its strength as an outsourcing hub lies in its
close aﬃnity with the US. The Filipino legal, education and political systems are in
large part based on American systems. Over one million Filipinos live in the US, and
almost every extended Filipino family has someone living or working in US.
Culture

Filipino hospitality is legendary! The Filipino people are generally warm and
extremely friendly, they are also very family and relationship oriented. As a culture,
they highly value being “mabait”, which is the Filipino word for “kind”. This kindness,
warmth, and empathy are important characteristics that have helped Filipinos
become highly successful in the BPO industry.
Filipinos have developed a reputation worldwide as being extremely skilled when
answering a customer complaint. This makes them ideal for customer support jobs,
as Virtual Assistants (VAʼs), and in relationship oriented jobs where interpersonal
communication skills and emotional intelligence are of paramount importance.
Hospitality

After witnessing the growth of the BPO industry in India, the Philippine government
began promoting itself as a viable oﬀshore outsourcing hub. Today, the industry
enjoys widespread support throughout all branches of government. The Philippine
Government formed the Information Technology and E-Commerce Council (ITECC) in
order to promote itself as an attractive oﬀshore outsourcing hub. The ITECC has
proactively positioned their workforce to better provide the skills and services which
are in high demand, including IT skills.
Strong Government Support

Developing IT development zones within city planning
Enhancing the Philippines information infrastructure
Promoting services to potential clients
Providing a regulatory environment which is conducive to growth
The focus of the governmentʼs information and
communications technology policy is on ﬁve areas:

PEZA, short for Philippine Economic Zone Authority, which is a part of the Department
of Trade and Industry, is the Philippine government agency tasked to promote foreign
direct investment, extend assistance, register, grant incentives to and facilitate the
business operations of investors in export oriented manufacturing and service
facilities inside selected areas throughout the country. BPO companies in the
Philippines may opt to register with (PEZA) which entitles them to many beneﬁts,
including an income tax holiday for three to eight years.
PEZA
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After that, PEZA registered BPO companies are subject to only a 5% tax on gross
income (in lieu of all local and national taxes). PEZA is just one of the many ways in
which the Philippine government encourages economic growth in the BPO industry
by enacting favorable tax and regulatory policies designed to encourage direct
foreign investment.

The Philippines enjoys high Internet penetration, with some estimates placing the
number of Internet users as high as 24 million people. The country has a
sophisticated cellular phone industry, and a high concentration of users. Text
messaging is extremely common in Philippines, where approximately 2 billion text
messages are sent every day.
IT Infrastructure

he Philippines enjoys an abundance of disciplined, highly educated and native
English speaking professionals. Over 400,000 university graduates join the workforce
every year, many of which are graduates in IT, or IT related or engineering fields.
Many top universities and institutions of higher learning are now offering
outsourcing industry related curriculum, certifications, degrees, and advanced
degrees.
Filipino professionals are now recognized worldwide for their credibility and
expertise in many fields including communication, education, finance, health care,
science, research and IT.
Human Capital

The Philippines 7,107 islands stand strategically at the crossroads of regional and
international trade. The country is an ideal access point to all of Asia – currently the
fastest growing region in the world. International flights are inexpensive to and from
the Philippines, and flight times are short to major cities across Asia.
From the Philippines, its just two hours by air to Taipei or Hong Kong, and four hours
from Tokyo and Seoul. It takes around nine hours to fly to Australia. It is also relatively
close to the United States, with only a 12 hour flight from Los Angeles to Manila.
Strategic Location

Many multinationals, as well as small and medium sized businesses, when faced
with the important decision of where to outsource, and for whom to partner with,
try to avoid investing in countries which are too risky, or lack a proven track record.
Over the last ten years, the Philippines has proven to be a world leader in many
segments of the BPO industry. The Philippines has a proven track record of success.
Numerous Fortune 500 companies are already taking advantage of the unique
beneﬁts available from outsourcing in the Philippines.
Proven Track Record
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BPO in the Philippines

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