Why the Philippines is a Top Offshoring Terminal for IT-BPO and many Other Services

In 2013, the Philippines took the third spot in the top 100 global outsourcing destinations in the world, edging New Delhi; and while the Information Technology-Business Process Outsourcing (IT-BPO) industry believes that the Philippines is a very strong contender in the top five most cost-competitive termini for IT-BPO services, one US-based company boldly predicts that by 2030 IT-BPO will be a trillion-dollar economy in the nation.

The ushering in of the practice of outsourcing or offshoring in the Philippines during the last 10 years of the 20th century has led to the unprecedented growth of this business strategy in the country, which also continues to benefit developing foreign companies and third party organizations.

Began by only a substantial number of Fortune 500 companies, top companies in Australia have now also started to outsource in the country, services that include call centers, customer relationship management, back office/chat support, creative processes, HR solutions, application maintenance, healthcare information management, medical transcription, software development, legal services, research, content writing and blogging.

Outsourcing, is a business strategy wherein a host firm contracts out a business process to another organization, called a third party. This third party organization may be located within the host firm’s own country or in another country, thus, the term offshoring.

Host firms usually resort to outsourcing or offshoring of certain company projects or services due to the following reasons:

  • Lack of the necessary expert or skilled individuals needed for the job;
  • Outsourcing is much more economically favorable – both for the host firm, which is able to save much from company expenditures, and the third party organization, which is able to create jobs while earning profits at the same time;
  • Hired employees in a third party organization are well aware of the business culture in western countries, have strong skills in the English language, have high literacy and are experts in various areas;
  • Competitive labor rates, and a firmly established telecommunications infrastructure

Outsourcing Philippines started in the 1990s, becoming more famous at the turn of the century. By 2004 the industry’s worth was estimated at $1.5 billion. In 2009, after only five years, its worth ballooned to about $9 billion.

Today, the Philippines is one of the top countries in the business process outsourcing (BPO) industry. Besides non- voice and call center services, the country is also an emerging top competitor in the area of 24/7 live chat support, phone services, medical billing, records retrieval/collection, data entry, web and IT services, which include application maintenance, software development and web design, and in many other types of services, like computer animation, medical transcription, legal services, research, blogging and content writing. Besides these services, many other outsourcing companies, like Pinoy Partners Outsourcing Center Inc., for example, has grown to include in its list of services, Construction Estimating, which is handled by team of on-screen-take-off specialists who are ready and can help and allow construction companies bid on more projects.