While other industries continue to show sluggish recovery since the US financial meltdown that sparked a global recession Philippine outsourcing are displaying remarkable resiliency. Philippine outsourcing registered continuous tremendous growth from initial earnings of $0.02 billion in 2001 to $7.3 billion in 2009 making it a powerhouse in the global marketplace. Philippine outsourcing contributed 70,000 new jobs last year bringing the total number of people currently directly employed in call centers in the Philippines to 400,000.
Philippine outsourcing revenues reached a robust 19 percent in 2009, according to the Business Process Association of the Philippines (BPAP). Last year was a good year for Philippine outsourcing especially in the second half of the year, said Gillian Virata, BPAP executive director for research. Virata described Philippine outsourcing showing as strong when the recovery started to kick in.
Among the Philippine outsourcing companies that saw big revenues is StarTek, Inc. The company reported annual revenue of $289.0 million, more than 6 percent from $272.3 million in 2008. The higher revenue of was due primarily to $14.6 million of incremental revenue from new sites that were launched in 2008 during the height of the global recession.
Another company that appeared unstoppable by the global economic shakedown is Stream Global Services. In 2008, Stream Global generated net revenues of $800 million, 20 percent of that from its Philippine outsourcing centers. Revenue for the nine months ended September 30, 2009 was $383.2 million.
As the global recession continues to give way to even wider recovery, the Philippine outsourcing industry is poised for an even bigger slice of the pie. The Philippine outsourcing industry’s revenues are “expected to exceed $9 billion by the end of 2010,” President Gloria Macapagal-Arroyo said at the opening of a recent BPO conference in Manila. Players in the Philippine outsourcing are taking advantage of the upbeat forecast.
“We see $1 billion in revenues for 2010 with acquisitions… But in three to five years we could be making $5 billion in revenues,” Scott Murray, Stream Global Chief Executive Officer, told business reporters. Stream Global merged with eTelecare in 2009 and brought in $5 million for new technology for its Philippine outsourcing centers.
Infosys BPO Ltd. is also planning to expand Philippine outsourcing facilities and increasing its employee base to 3,000 within the two years. “We are excited about the prospect of growing and the demand is going up. We are planning to open new facilities and we have short-listed three places in Metro Manila with [a capacity of] more than 1,000 seats,” Infosys BPO Chief Operating Officer Ritesh Idnani said in a press briefing.
US-Based UST Global opened their Philippine outsourcing centers and plans to expand its operations in 2010. “We are looking at hiring around 1,000 people in the next 12 months,” Sajan Pillai, UST Global chief executive, announced. Over the next three years, the company expects its Philippine outsourcing workforce to grow between 3,000 and 5,000 when it puts up another site outside Manila, he added. UST Global expects revenues from its Philippine outsourcing facility to reach $32 million this year and annual income exceeding $150 million in the next three years.
CSS Corp, another US company, is starting with a more modest 400-seat Philippine outsourcing facility. The company’s $15-million new delivery center is only the first phase of a long-term investment in the country, according to CSS chief executive Nick Sharma. The company is eyeing about 2,000 additional seats this year in its bid to become a bigger player in the Philippine BPO sector.
“On the BPO part of our business, we see that our Philippine delivery center will contribute 20 percent to 25 percent in our revenues in the next few years,” Sharma forecasted.