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Top Ten Drivers of Philippine Outsourcing Dominance in 2021

19 Aug 2020

The Philippines ticks more boxes than any other outsourcing destination worldwide. Here are ten key reasons why.

  1. The growth trajectory of its Information Technology-Business Process Outsourcing (IT-BPO) is on a strong positive upward curve.

    When the Philippines’ IT-BPO sector entered the market two decades ago, it only had 0.075 percent contribution to the country’s GDP. By 2016, the Philippines had annual IT-BPO revenue of 9% which accounts for at 7% of its GDP today. This $23 billion dollar industry is the fastest growing in the country and makes up between 10% and 15% of the global outsourcing market share.

  2. The Information Technology-Business Process Management (IT-BPM) industry is poised to become the single largest contributor to the country’s annual GDP in 2020.

    The IT-BPO industry remains among top growth drivers for the Philippine economy this year. From $22.9 billion in revenue in 2016, it is expected to reach $55 billion (a 140% increase) by the end of 2020, surpassing foreign remittances in terms of revenue contribution.

  3. The Philippines is the fifth most popular outsourcing destination in the world.

    Almost one-sixth of jobs within the IT-BPM sector are outsourced globally. Clients from wide-ranging industries see the Philippines as a highly preferred outsourcing service provider due, in large part, to its digital and open innovation ecosystem.

  4. Growth of the IT-BPM sector is driven by technology-led industry transformations in key high-value services.

    High-value services within the IT-BPM sector include contact centers, BPO, IT services, animation and game development, and global in-house call centers (GICs).

  5. The Philippines’ outsourcing workforce is at least 1.2 million professionals strong and growing.

    High literacy rate, fluent English proficiency levels, and neutral English accent are just some of the strengths of Filipino workers in the outsourcing sector. With more than half a million college graduates annually, it is rare to find an employee without a diploma and they come from a broad range of academic disciplines and specializations. As one of the largest white-collar employers in the Philippines, the BPO sector benefits from pro-investment government regulations and increasing foreign investments in global in-house call centers (GICs), third-party contact centers, and information technology parks/centers.

  6. The IT-BPM sector is expected to create at least 600,000 additional jobs by 2022.

    When the IT-BPM sector started over 30 years ago, it only offered low-end, single-focus outsourcing services. Today, it provides strategic solutions, comprehensive capabilities, and cost-cutting services for businesses of all sizes worldwide. Given the current population size and talented workforce in the Philippines, it attracts a growing number of digital clients who want to leverage the external and highly specialized worker pool in the country.

  7. The Philippine government provides attractive investor incentives within the BPO industry.

    Since 2002, BPO investors who declare their office spaces as an ‘ecozone’ can enjoy tax-free incentives as mandated by the Republic Act 7916. They also have the privilege of a four-year exemption from paying corporate income tax – which can be extended up to eight years given the right provisions. Furthermore, they are entitled to duty-free importation of capital equipment, simplified export and import procedures, among many other outsourcing-related benefits.

  8. The Philippines has a strong track record of service diversification in the outsourcing industry.

    The country is strongly preferred by major clients around the world, especially from the North American market, simply because of its outstanding performance in providing voice-based and non-voice services. Stable pool of skilled professionals, sound telecommunications infrastructure, as well as increased investments in cloud computing technology enable the Philippines to provide complex BPO services such as software development, information management, engineering animation, knowledge process outsourcing, and such.

  9. Total Foreign Direct Investments (FDI) in 2019 was at $7.65 billion with $1.6 billion pledged for the IT-BPO industry.

    The Philippines is ranked fourth among the most preferred FDI hub in the ASEAN region, a testament to the world-class quality of service that the IT-BPO industry has manifested throughout the years.

  10. The Commission on Higher Education (CHED) is fully supportive towards producing a market-ready BPO workforce.

    In partnership with the Information Technology and Business Process Association of the Philippines (IBPAP), CHED has launched a Service Management Program which is tailor-made instruction for those planning to apply for a job in the IT-BPO sector.

Outsourcing in the Philippines is one of the best decisions you can make for your company. Whatever specialized skill or technology services you need including, cloud engineering, contact centers, digital marketing, managed services, Microsoft solutions and more – we offer unrivalled expertise, experience, and resources so that you can operate productively and achieve your business goals. Contact ClinkIT Solutions today for a free consultation.

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