The Philippine BPO Industry: A Mid-Year Report

14 Jun 2023

There’s a level of synonymy when talking about the BPO industry and the Philippines. Ever since Accenture opened its doors in 1992, it has become one of – if not THE – major industries of the country. 31 years later, the industry continues to be a powerhouse of the Philippine economy. Despite competition from countries like India, Brazil and Mexico, the Philippine BPO Industry consistently ranks as among the best. 

At the halfway point of the year, it’s a good time to see where the industry currently stands. Not just see where it is performing strongly, but also why. It will help understand how the industry approaches new and old challenges.

The Good and Bad of 2023 So Far

2023 has been an exceptional year for the Philippine BPO industry. It ranked among the 20 global outsourcing destinations in the world. The Philippines was also lauded as a new leader in “building a vibrant destination”. This was according to the 2023 Tholons Global Business Innovation Sustainability Index (TBIS). In the report, the Philippines excelled when it came to their overall talent pool quality and ability to fulfill services. Manila and Cebu were hailed as outsourcing “Super Cities” in their survey of the top 200 cities for outsourcing. Overall, the Philippines ranks 6th in the world, with nine cities listed out of 200.

The Tholons report also included two new categories the Philippines showed both promise in and a need for improvement. This year, countries were also measured on their Diversity Equity and Inclusion (DEI). This criteria looked into issues like the pay gap, equal worker rights, gender and empowerment. The Philippines performed well in this category, showing its commitment to economic diversity.

The Philippines showed its commitment to diversity and equal rights.

On the other hand, it did not perform well when it came to Sustainability. In fact, this was where the Philippines performed the worst in. We’ve talked previously about the importance of being a sustainable company in today’s business environment. Big or small, consumers are more likely to engage with anyone committed to better sustainability. Analysts are hoping this serves as a wake up call for businesses to be more conscious about their decisions that will affect future generations.

Amidst the changes and challenges however, the Philippines remains one of the best BPO destinations in the world. In 2022, revenue from the industry rose 10% to $32.5 billion. Experts have long predicted the industry to surpass revenues from overseas contract workers, another pillar of the country’s economy.

The Roles in the Philippine BPO Industry

It’s interesting to see the trend in roles that companies outsource and offshore to the Philippines over the years. 

Perhaps the most common example is the use of customer service and technical support teams across several industries. Companies often begin outsourcing to the Philippines through teams that handle queries on their products and services. In most cases, their experience with CSR teams leads them to looking into more quality roles they can outsource. This is due in part to the high level of work their teams deliver on a consistent basis.

These different roles are not just niche ones either. For instance, the finance and banking industry for instance can work with an IT team in the Philippines. Not only them, companies can even consider outsourcing some key finance roles that will free up resources for core business objectives. Other industries also work with teams that handle key back office functions that need to be addressed on a daily basis.

Today, it’s not uncommon for companies to outsource full departments that work with their local teams. Full marketing and IT teams that handle different back office functions are almost the norm.

Why Choose The Philippines? 

The question still remains however. What has made the Philippines such a consistently great destination for BPOs? Many global companies call the Philippines their second home for these four key reasons. 

Lower Labour Costs

Working with teams in the Philippines is a much more cost effective approach. That is, they do not have to worry about local operational costs as this will be handled by their provider. The beauty is that despite lower costs, the quality of work does not diminish. In recent years, companies also saw the true adaptability of their outsourced teams. 

At the height of the global pandemic, the BPO industry as a whole quickly adopted a remote work model. This meant providing teams the resources and support they needed in a new environment. As a result, teams delivered for their clients on a level similar to local teams but at a lowered cost. The only difference was that they showed it could be done similarly to working in top of the line office spaces with all the amenities they needed. With companies today adapting a hybrid approach to work, the flexibility of the BPO industry once again shines through. With the Filipino workforce leading the charge.

Excellent English Literacy

English literacy in the Philippines has long been rooted in its history and culture. With Filipinos being heavily influenced by western culture, they are often well-spoken in English by default. From 2018 to this year, The Philippines has ranked 2nd in Asia with the highest English Proficiency Index (EPI)

This serves as a good benchmark for plenty of customer service teams working with English speaking customers and audiences. Many Filipino professionals have natural clarity and diction in English that lets them be understood easily. Something that is very vital when providing assistance online whether it’s running through technical terms or detailing instructions. On a more advanced level, they are also expressive in how they communicate with English speaking clients that allow them to build a strong working relationship with clients. 

Committed Government Support

Earlier we stated that the BPO industry is considered a “powerhouse” of the Philippine economy. A major reason for this is the industry getting strong continued support from the government and their incentives. Since 1995, the Philippine government established several economic zones for global businesses to take advantage of. Under the Republic Act 7916, These zones provide companies with different tax exemption incentives, making the Philippines an attractive destination for outsourcing. 

A Unique Filipino Work Culture

But perhaps the most unique reason is knowing what Filipino work culture is also about. For all the discussion on Filipinos being talented in English and producing high quality work, it’s their culture that makes it all possible. Filipino work culture is all about togetherness and cooperation.

Filipino culture focuses on collaboration and togetherness.

Unlike cultures that focus on individual growth and development, Filipinos take a more communal approach. Teams form close bonds with each other that helps cultivate an ideal working environment where everyone feels at home. This is often with a strong sense of collaboration in mind. It results in teams working like well oiled machines towards any business objectives that have been set out for them.

A Bright Future for the Industry Ahead

There’s much to be excited about for the Philippine BPO Industry for years to come. In the next five years, it will generate up to $60 billion in revenue. Analysts say that targeting a 1.1 million industry job growth in that time will help the industry reach this lofty mark. Of course there will be challenges on the road ahead, such as the ever shifting global market demand or something unforeseen like a global pandemic. However, as has been the case for the last 31 years, you can bet on the Philippine BPO Industry to adapt to any circumstance to continuously thrive.