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Increase productivity for sales, service and marketing functions
January 18, 2007


Manila Seizes Large Share of the Outsourcing Industry


The Philippines shares a language and legal system with the U.S., and offer high skills and low costs. They could outrun India for outsourcing dollars

India's dramatic economic rise this decade, powered by its role as the back office of the world, has developing countries from Argentina to Vietnam scrambling for a piece of the action. With good reason: Researcher Gartner estimates offshore infotech and business-process outsourcing amounted to $34 billion globally in 2005 and could double by 2007.

"Some of the countries like Philippines have done fairly well to leverage their unique skills and carved niches for themselves," said Infosys Chief Executive Officer Nandan M. Nilekani,in Singapore recently attending an International Monetary Fund and World Bank meeting. Filipino employees effectively increase productivity for sales, service and marketing functions.

Could all of this be a golden opportunity for the Philippines, long regarded as the economic laggard in Asia? This vast archipelago is starting to gain some traction on the outsourcing front.

The Business Processing Association of Philippines estimates the industry will chalk up 57% growth this year with total revenues of $3.3 billion and is on track to deliver nearly 48% growth in 2007 to $4.9 billion. "Business process outsourcing [BPO] is one of the fastest growing segments of our economy and a key plank of President Gloria Macapagal Arroyo's strategy to put strong growth drivers in place," says Philippine Cabinet Secretary L. Ricardo Saludo.

Consultancy A.T. Kearney, in its recent ranking of the most desirable global services locations which are competitive for business process outsourcing, ranked the Philippines fourth in the world behind India, China, and Malaysia—a huge change from being outside the top 10 three years ago. Philippines gets high marks for its large, educated talent pool and English language skills, though it lags some of the other locations in infrastructure.

Economists and analysts are startled by the Philippines' runaway growth in the sector. "The pace of development of the BPO [sector] in the Philippines has been impressive," says a recent report by U.S. investment bank Goldman Sachs. "Three years ago there was a question mark whether Philippines could develop some [outsourcing] momentum. Now it's a $3 billion industry."

Goldman's report also notes the outsourcing industry has begun to expand beyond the capital Manila into university towns such as Baguio as well as Clark (the former U.S. military base), Cebu, Dumaguete, and Davao. "It is clear that Philippines is now very much on the global map for outsourcing," the Goldman report said.

The recent growth spurt in the outsourcing industry in the Philippines has been fueled not by traditional low-value-added call centers but more higher-end outsourcing such as writing services, Web design, programming, software development, animation, and shared services. Though call centers still form the largest part of the sector, the Philippines has begun leveraging its creative design talent pool, its large pool of programmers and writers. These talents not only help the Philippine economy but also help international companies increase productivity for sales, service and marketing functions.

Another factor working in the Philippines' favor is cost. In India, wage costs in outsourcing have risen 15% per annum over the past two years. This rise has outsourcing firms and clients looking for alternatives.

Offshoring, Inc, the leading offshore staff leasing company based in the Philippines, provides such advantage. It is an American owned and operated company with headquarters in Atlanta, Georgia. Offshoring, Inc offers high qualified candidates who go through rigorous search and recruitment processes, making them the cream of the crop in their fields. Offshoring, Inc has a large team of outstanding premium writers, graphic designers, programmers, media managers, quality assurance representatives, data entry clerks and contact center agents. These professionals brag of years of advanced degrees and practical training in the workforce. Offshoring, Inc help their clients increase productivity for sales, service and marketing functions.

All potential staff are extensively reviewed with background checks and constant supervision. Offshoring, Inc puts in topmost priority their clients' intellectual property and trade secrets and provides US-based confidentiality and non-compete agreements. Unlike other outsource centers, Offshoring, Inc provides personal attention to maximize the client's team's potential. For a team of 10 seats that the client hires, Offshoring, Inc provides a personal team supervisor for free to hold ultimate accountability for the client's satisfaction. Offshoring, Inc also uses state-of-the-art hardware and facilities to equip the professionals into achieving the best of their products.

The Philippines raked in offshore service generating revenues of $2.1 billion last year, placing third behind India and China and slightly ahead of Malaysia. That's up 62% over the $1.3 billion it gained in 2004, and a huge increase from the start of the decade when the outsourcing industry in Manila employed just 2,400 people and the industry had revenues of merely $24 million.

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