Why The Philippines is an Offshoring Destination

28 Jul 2021

The Philippine BPO industry is many things. As a major contributor to the country’s GDP, the industry is practically synonymous with the Philippine economy. Just a decade ago, BPOs in the Philippines were already bringing in revenue of over $9 billion and only got better. Through approaches like offshoring, BPOs continued to thrive and develop in the years to come. So much so that congress even passed a bill called the Special Economic Zone Act. The bill provides tax incentives for foreign investors looking to establish themselves in the Philippines. Since then, numerous BPO companies have made their mark in the Philippines. A few are even close to becoming household names. Though there were significant setbacks for the industry in 2020, the Philippines still maintained its status as a top offshoring destination in Asia.

There are several reasons for this. The Philippines ranks as one of the best destinations for offshoring, consistently maintaining its position within the top 20 countries. Manila also continues to be a provider of exceptional talent, skill and quality in the world. Together with several other cities in the country, the Philippines still shines as a leader in customer service and business management. 

As a whole, Offshoring in the Philippines remains one of the most cost-effective strategies for companies to consider. Businesses in Australia, Canada, and the United States continue to benefit from this strategy. 

Resiliency Amidst Setbacks

One of the things we’ve always said about the BPO Industry in the Philippines is its resilience and adaptability. The industry was hit hard by the pandemic while it learned to thrive in uncertain times. Amidst a “quiet” 2020, the industry saw $26.7 billion in revenue that year, an increase from $26.3 billion in 2019. As of this writing, the BPO industry continues to regain some lost ground as demand for office space and employment grows.

What this says is, despite setbacks, the country is still considered among the top 20 destinations to offshore globally. Additionally, according to Tholons, key cities like Manila and Cebu remained also within the top 100 destinations. With BPO employees considered “essential” by the Philippine government, it shows how important the industry and its people are to the country. 

Why Choose the Philippines?

So even after all that, why still choose the Philippines as an offshoring destination? Companies that are offshoring will tell you that the Philippines has one of the best talent pools to work with. Their teams in the Philippines – mainly in Manila – have access to all the latest technologies, reliable infrastructure and multi-talented people. An offshore team in Manila can take on different roles and act as an extension of a company’s local team. Here are three reasons why companies call the Philippines their second home.

Comparatively Lower Costs

Cost reduction is the oft-cited reason companies choose to offshore. When working with a team in Manila, a company’s local, operational, and labour costs are more cost-effective. Even with making these costs more affordable, the high quality of work does not diminish as well.

In the last year, working with a quality offshoring provider meant not only ensuring the right talent were provided with exceptional workspaces with amenities. Providers also support their teams working remotely, ensuring they receive consistent assitance. Good providers see that the output quality of work from teams in Manila remains consistently high. Companies get more “bang for their buck” when they see their teams deliver on their objectives at a fraction of their local cost. For instance, the average annual salary in Australia for entry-level employees is over AU$40,000 and US$42,000 in the US. In the Philippines, that amounts to just US$5,300. Additionally, the average annual salary at the supervisory level in the Philippines is US$6,700, and US$13,000 at the managerial level. 

High English Literacy Among Asian Countries

Let’s take a look back at Philippine history. In the early 20th century, the Philippines was colonised by the United States and influenced by western culture. Whether in communication and entertainment, Filipinos became well-spoken with the English language through osmosis and daily use. Their love for English songs and English language programs is felt in their culture. For many Filipinos, English is their second language, and most of the population is good at it. Many of the country’s top universities found within Manila have English in their curriculum as well.

This resulted in the Philippines having the second-highest English literacy rate in Asia, just behind Singapore. This means Filipinos are easily understood and interact well with customers. It may not seem like a big deal on a surface level, but it helps develop better, more positive customer experiences and ensure engagement. 

A Unique Filipino Work Culture

We’ve touched on two points that also show how Filipinos as a whole approach their professional lives. Their work ethic is patient, resourceful and good-natured, on top of also being hardworking and focused. Compared to a work culture that focuses on individualism, this shows a “distinctly Filipino” approach to work ethic. The close bonds they create shape an ideal working environment where everyone feels at home. Whatsmore, the pandemic showed just how important it was for our teams to still stay connected with each other despite working remotely. 

Healthy collaboration is a central part of Filipino work culture.

Filipino work culture is about getting things done together to get results. It’s almost no wonder why many offshore teams are efficient when collaborating with local teams in achieving either short or long term business objectives.

Your Next Offshoring Destination

The Philippines continues to find growth and success through the BPO Industry, with Manila leading the way. It remains an ideal offshoring destination for companies looking for Customer Service, Financial Services, Software Development, Graphic Design, and other specialised roles.

Finding success through it, however, is not something that happens overnight. Companies must fully embrace the Philippines – both its advantages and faults – to truly see why it is a premier offshoring destination. This means consistent engagement and development of their teams as they establish themselves. As more destinations around the Philippines open up to the industry –thus greatly benefiting the whole country. By working with the right provider, companies can ensure their offshoring experience is a smooth one.