Business process outsourcing in the Philippines

The Business process outsourcing or BPO is a growing industry in the Philippines. In the Philippines, call centres or call centers actually began as plain providers of email response and managing services. The call center industry comprises 80% of the outsourcing industry in the country. The business process outsourcing industry in the Philippines has grown 46% annually since 2006. Overall, Philippine BPO is forecast to earn between US $11 to 13 billion and to employ 900,000 additional people in 2010. To achieve and sustain this growth, the Philippine government offered fiscal and non-fiscal incentives to attract foreign direct investment in these industries as part of the 2007 Investment Priorities Plan. Industry estimates from the Board of Investments, Business Process Association onf the Philippines (BPA/P) and BPO Services Association (BSA/U) put the number of people employed by the BPO sector by end of 2008 at 435,000 (vs 372,000 in 2007)- excluding the non-BOI/ non-PEZA entities. Majority of the BPO facilities are located in First Tier cities in Metro Manila and Cebu. Second and Third Tier sites are located in regional areas such as Bacolod City, Baguio City, Cagayan de Oro, Clark (Angeles City), Dagupan City, Davao City, Tacloban City, Dumaguete City, Lipa City, Iloilo City, Legazpi City, Iligan City, Olongapo City and Urdaneta City. The IPP was prepared by the Board of Investments (BOI), as the lead agency in promoting investments, focused on the sectors identified in the Medium-Term Philippine Development Plan (MTPDP) 2004-2010 (PBOI 2006). The BPO output for 2008 was US$ 6.1B (vs US$ 4.5B in 2007), putting the Philippines as the 3rd largest BPO destination (15%) after India (37%) and Canada (27%). It was expected to hit US$ 7.2B to 7.5B in 2009. The industry was optimistic of 18% growth in headcount 2009. Fueling the recent growth spurt in the outsourcing industry in the Philippines are more higher-end outsourcing services such as Web design, software development, and animation. Major studios like Disney, Marvel, Warner Brothers and Hanna Barbera have offices in the Philippines (CNN 1995). Some of the latest works of Filipino animators include scenes in Pixar's Finding Nemo, Paramount Picture's Barnyard and Twentieth Century-Fox's Anastasia (ABS-CBN Interactive 2004). The Philippines has less expensive operational and labor costs, as well as an English-speaking workforce as a result of English being one of two official languages. English is also one of the major subjects in all educational levels. In 2007, The Philippines remained a top BPO destination for the estimated $150-billion business process outsourcing industry.

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