Advantages Of Outsourcing To The Philippines

While India and China have traditionally been leaders in the outsourcing industry…

The Philippines has rapidly developed recently and made major advances in this sector over the last decade. The 2016 Tholons report of the top 100 outsourcing destinations places two Philippine cities among the top 10 outsourcing destinations: Manila at 2^nd place, and Cebu at 7^th place. This is a strong indicator of how successful the outsourcing industry has become in the Philippines. This industry has grown at a rate of 30% over the last ten years, and appears set to continue this strong development.

The business consulting giant Deloitte even predicts that the Philippines will become the world’s outsourcing capital for IT services by 2020, growing to take over 20% of the global market share in this Industry, with $48 billion in revenue. Here we list the top advantages of outsourcing to the Philippines – advantages that explain why many companies are choosing the Philippines as their preferred outsourcing location:

Excellent English skills

Due to historical ties with Spain (which ruled the Philippines for over 300 years), and the USA (which governed the Philippines for about 50 years), the Philippines have developed a strong compatibility with Western culture.

Probably the strongest influence is from the USA. As a result, English is used as an official language in the country and is the main language used in schools and business. Wikipedia lists 78% of the Philippine population as being English speakers, whereas India only has 10% English speakers among its population.

Since outsourcers in the Philippines speak excellent English, this makes them a great choice for customer support services to Western clients. The accent of Filipinos speaking English is widely considered to be easier to understand than that of other Asian countries.

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Affinity to Western Culture

The Philippines is one of the largest Roman Catholic countries in the world, and thus has a similar religious background to Western countries. In addition, pop culture coming from the USA is very popular in the Philippines, making especially the younger generation highly aligned with Western culture.

Together with their proficiency in English, this makes it easier to integrate Filipino outsources into Western companies compared to outsourcers from other Asian countries.

Cost Savings

The Philippines is a low-cost country, due to the fact that the minimum daily wage in the Philippines is between $6 and $10, depending on the city. Because of this, it’s possible to hire Filipino outsourcers at a fraction of the cost compared to workers in Western countries.

Fresh graduates from high-quality universities can be employed for as little as $300 per month, and while more experienced workers (especially in sectors such as Software Development) tend to cost more than this, they are still much cheaper than equivalent workers in high-income countries.

Government Support for the Outsourcing Industry

Recent governments of the Philippines have been very supportive of the outsourcing industry, and have sought to attract foreign investors in this area. A government agency, called PEZA, was specially created to promote projects by foreign investors. It offers tax benefits and favorable economic zones for foreign companies. Due to the strong historical ties with the USA, the structure of the Philippine government closely resembles that of the US, which makes it easier to work with for foreign investors.

The government of the Philippines has recognized the outsourcing industry as one of the strongest areas of economic growth in the country and aims to further support this trend.

High-Quality Workforce

The rate of literacy in the Philippines is above 95%, and more than 450,000 students graduate from universities every year. There are several top universities in the country, which produce high-quality graduates every year.

Traditionally, many of the best Filipino graduates used to move overseas, to find work in high-income countries. However, the rise of the local outsourcing industry has now provided them with another option. Instead of moving far away, top university graduates can now find good jobs at home, which many of them prefer, as it enables them to stay close to their families.

Many university graduates turn to the BPO/outsourcing sector as one of the best career opportunities in the country. In fact, several Filipino universities offer training specifically aimed to prepare students for this kind of career. Due to this, outsourcing companies in the Philippines can easily find, and hire, top-quality workers that are highly motivated, and who stay with their company for many years.

Conclusion

Taken together, the Philippines offers many benefits for outsourcing projects. The high-quality English skills and the cultural compatibility with the West, together with the availability of highly educated and motivated workers, makes the Philippines one of the best outsourcing destinations in the world. If you add the cost savings on top of these advantages, it becomes clear why so many companies are choosing the Philippines to cover their outsourcing needs.

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