The Philippine outsourcing industry has gained ground during the last few years. The financial crisis which hit small and medium enterprises as well as multinational corporations all over the world only spurred the expansion of the then-developing Philippine outsourcing sector. At current, some 80% of the Philippine outsourcing industry’s clients come from the United States alone, while the remaining 20% are UK clients and local companies. Aside from the obvious cost-savings foreign and domestic companies get by transferring non-core services to business process outsourcing (BPO) firms in the Philippines, there are also other advantages that come with offshore outsourcing which these companies also recognize and experience.
Philippine outsourcing firms are well known for providing high quality services for a relatively lower price as compared to clients holding these non-core business services in-house. The operational costs are much cheaper due to lower prices in labor, real estate costs and energy in the country. When businesses outsource, they can turn their attention to working on their core competencies and make better use of their investments. Aside from these obvious advantages to outsourcing in the country, the Philippine outsourcing industry is also known for its highly skilled and well-trained workforce and better education system. The vast talent pool of professionals has high proficiency in English and possesses technical skills necessary for a career in the outsourcing industry.
The Philippine government as well as many private companies has long realized the potential and the supremacy of the Philippine outsourcing industry, and thus, targets to rival India’s business and knowledge process outsourcing industry. The Philippine outsourcing sector is aiming to double its growth by 2010, employing up to 1 million skilled Filipinos in both local and foreign-owned call centers. Currently, there are around 600,000 employed workers in the country’s BPO and KPO industry. Last year, the Philippine outsourcing sector’s revenue growth reached 20%, with total industry revenues amounting to $7.3 billion. The industry is now targeting a 26% revenue growth this year to outdo the preceding year’s revenues. To attain these goals, local and foreign-owned BPO firms are opting to look for more non-US clients especially now that US President Barrack Obama has launched his anti-offshore outsourcing program which employs measures that will discourage US-owned companies from transferring jobs to offshore destinations such as the Philippines.
The Philippine outsourcing industry is also eyeing two more markets that will undoubtedly become an important part of the industry: game development and animation. These two sectors were able to contribute $4.5 million to the BPO industry’s 2009 total revenues. Although the game development and animation sectors’ revenues are seemingly smaller compared to other sectors’ revenues, analysts believe they have the potential to become major role players in the outsourcing industry. These sectors grow by more than 5% yearly, and employ some 640 Filipino artists and developers. This is an improvement compared to the 50 or so artists and game developers employed back in 2004.
Despite the recovering foreign economies and the anti-offshore outsourcing campaign by the US, analysts and businessmen still expect the Philippine outsourcing industry to grow. Growing operating costs and the need for younger skilled workers will continue to make outsourcing to the country an option for many foreign and local businesses.