Thrilla in Manila: Philippines TKO of the Outsourcing Arena

Thrilla in Manila: Philippines TKO of the Outsourcing Arena

Many outsourcing countries have emerged during the past decade, but the Philippines still continues to dominate the Business Process Outsourcing (BPO) arena. Why? The reasons are simple and clear: a high literacy rate with a dedicated workforce, English culture skills, low operational costs, and government support.


Currently, the literacy rate in the Philippines is 95% higher than India, China, and Sri Lanka. This is because Filipinos begin learning American English in the first grade. In India, by contrast, public schools introduce British English in the third grade. The English language is incorporated in the everyday life of Filipinos from product labels, traffic signs, and educational materials. Filipinos are also known for their neutral accent and knack of quickly imitating English accents, making the country more attractive to businesses.


Filipinos, particularly those who obtain degrees, are proficient in speaking, reading and writing English, and many are multilingual. Hard work, loyalty, and dedication are emphasized in the family-oriented Filipino culture, resulting in a work ethic not often found in modern society. These qualities are what make Filipinos the ideal contractors for any international employer.


Outsourcing is up to 80% cheaper than hiring locally in most cases. Not only that, the cost of living in the Philippines is substantially less than that in Canada, the US, and Australia, with wages being correspondingly lower as well. In 2018, full-time virtual employees make about $1,300 a month which stretches considerably further for a Filipino than it does for an American or an Australian. Working remotely for international employers is in very high demand in the Philippines, not only because of the wages received, but because this type of employment allows a Filipino to work from the comfort of their own home.


The government has been a key promoter of the outsourcing industry over the past decade. With the BPO industry expecting to add as many as 70,000 jobs and $1 billion in revenues this year, the government has increased their tax incentives. A couple of key incentives are income tax holidays, which are temporary reductions or eliminations of tax, and a 50% tax deduction. Permanent resident status is also readily available for investors. The Philippine Development Plan has listed the BPO industry as one of the top 10 high-potential and priority development areas. Due to that priority, special economic zones were created wherein BPO/contact center facilities may be established and operated.


Outsourcing to the Philippines makes sense and offers businesses all over the world the opportunity to grow their organization exponentially. The Philippines stands ready to offer every opportunity to investors, businesses, and employees in order to remain the leading global outsourcing hub all the while retooling its workforce to weather the shift to artificial intelligence.

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