The State of Outsourcing in the Philippines

It is no secret that developed countries are farming out certain business processes to Asian countries like India and the Philippines because it is cheaper than to do them in-house. What is quite amazing is that the Philippines is even considered in the running against a country like India.

The Philippines is a small country with a total population of 96.71 million (2012) compared to the much larger India with a population of 1.237 Billion.  Even if one only considers the number of the typical employee population (between age 25 and 54), India still outclasses the Philippines 12 to 1. The Philippines should be at a distinct disadvantage when it comes to business process outsourcing (BPO) simply due to sheer numbers. And yet the Philippines has taken over 10% of India’s share of the BPO market in the last half decade.

BPO watchdog the Information Technology and Business Process Association of the Philippines (IBPAP) states part of the reason for this competitiveness is the Data Privacy Act of 2012 passed under Benigno Aquino Jr., current president of the Philippines. BPO service providers such as Pinoy Partners Outsourcing Center Inc. benefit from this law because it ensures the protection of the sensitive data that is often handled by BPOs for their principals such as credit card information. The Act also provides international privacy standards to these BPO clients. This is an example of legislation that helps everyone involve with it.

However, BPO experts in India aver that it is the English language capabilities of the average Filipino that gives the Philippines its greatest advantage. It may very well be true. A report by GlobalEnglish Corporation – Pearson English Business Solutions in 2013 found that the Business English Index (BEI) of the Philippines was the best among the 30 countries surveyed (7.95 out of 10) for the second year in a row, beating out the US, UK, and Australia. The average global BEI score was 4.75 out of 10.

The IBPAP projects that the 21% growth in BPO jobs registered in 2012 will continue, and that by 2016 there will be 1.3 million Filipinos employed in the BPO industry. As more and more companies realize the usefulness of outsourcing, the numbers will only continue to rise.

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