Four Reasons Businesses Outsource Back-office Work to the Philippines
English Fluency & Low Cost
Two conditions combine to make the Philippines an ideal offshore destination. Its recent history means most Filipinos speak English. And, as an emerging economy, the Philippines’ general operating costs are far lower than the United States. This is why businesses and individuals routinely send work to the island nation. No wonder, with its penchant for producing knowledge workers and low-cost operating environment.
But the Philippines is more than a mill producing out young, energetic, tech-savvy people. It’s a collection of 7,000 islands where mega-cities punctuate magnificent natural beauty. Mountains and volcanos arise to meet the sky. Blue, mesmerizing seas encircle pristine beaches. The Philippines is a tropical destination like few others and worth visiting in its own right.
Over a Million BPO Workers and Growing
Business process outsourcing (BPO) emerged in the Philippines in the late 1990s. Then, the nascent offshore outsourcing industry engaged less than 10,000 people. Soon the Philippines stepped out of the shadow of India’s BPO dominance. By 2021, more than a million Filipinos earn upwards of $250 billion for their employers. Early business processing operations clustered around the country’s capital, Metro Manila. There, hundreds of companies range from minuscule to multinational. Today, locators select sites beyond Manila and the major cities, Cebu and Davao. Call centers and service providers abound in the provinces where they realize both cost and talent advantages.
Access: Cultural, Regional, & Local
A shared modern history makes the Philippines Asia’s natural gateway to America. As Stanley Karnow opined in his excellent book, In Our Image: America’s Empire in the Philippines, “300 years in the convent, 50 years in Hollywood.” Here he neatly captures the Philippines’ cultural affinity with the United States.
The Philippines sits in a very desirable neighborhood: South East Asia is a market of 600 million and growing. The next century belongs to the Pacific. The Philippines sits on South East Asia’s crossroads: within four hours of most Asian capitals. Internal travel is a snap. Daily and hourly flights from several carriers connect to destinations around the Philippines. International flights disembark at twelve airports.
The Philippines government has long worked aggressively to attract offshore outsourcing. This includes a broad initiative to connect the country with a $20 billion fiber backbone digital network.
The network follows a cyber-corridor patterned on Malaysia’s Multimedia Super Corridor. Stretching 600 miles from Baguio City to Zamboanga City, it connects the Philippines from the north to the south. The fiber backbone complements extensive investment in power and talent infrastructure. These efforts ensure that BPO services are reliable and efficiently delivered to the world from anywhere in the Philippines.