What makes the Philippines a top BPO destination?
The Philippines is a top business process outsourcing (BPO) destination for investors looking to outsource operations.
The Philippines ranks 18th among the 2021 Top 50 Digital Nations Global Innovation Index by by Tholons, a leading consulting firm. The Top 50 Digital Nations is an annual list which ranks top countries by Innovation / Digital, Super Cities, Population, Diversity & Inclusion.
In addition, the Philippines has several highly urbanized cities. Six of which placed in among the Top 100 Super Cities in the Tholons’ Global Innovation Index for 2021.
Read more on what makes the Philippines a top choice for business process outsourcing.
Compatibility of Culture
One reason investors choose the Philippines when outsourcing is that the Philippine culture is compatible with that of the U.S.
The Philippines is an ideal staffing destination with its rich culture, high literacy and communication.
The Philippines is regarded as a highly literate and proficient English-speaking country. This is important in business process outsourcing especially when understanding tasks, communicating with clients, and interpreting important assigned documents.
The Philippines places second in Asia for Asian countries with the highest English proficiency: Singapore, the Philippines, Malaysia & more [2021]. The country’s rank (18th), among the top 20, is better than in 2020 where the country ranked 27th out of 99 countries/regions analyzed in the Index.
People skills and availability
When outsourcing to the Philippines, you have access to a wide, highly specialized talent pool with the right technical skills.
The Philippines also has a highly specialized talent pool with employees who have worked for large multinational and business process outsourcing companies.
Businesses also have the option to enhance the professional development of business process outsourcing professionals by conducting seminars and information campaigns to further the professional growth and meet compliance with professional standards and regulations.
Business Environment
The country’s National GDP rebounded by 5.7 percent in 2021. The GDP of the Information and Communication Industry, of which the Business Process Outsourcing Industry belongs in, grew at 9.2 percent.
According to a 2022 report by the Philippine Statistics Authority, all economies of 17 regions recovered from the 2020 Global Pandemic and recorded positive growths in 2021.
Investors outsourcing business processes to the Philippines are eligible to fiscal and non-fiscal incentives. Philippine tax laws were legislated to promote investments in the growing Philippine BPO industry.
Economic Zone Enterprises registered with Philippine Economic Zone Authority (PEZA) receive additional incentives.
From 2016 to 2019, Department of Finance (DOF) Assistant Secretary Paola Alvarez noted that IT-BPO firms have enjoyed an average of PHP 26.30 billion in total tax incentives.
Recently, Information Technology and Business Processing Management or Business Processing Outsourcing (IT-BPM/BPO) firms operating in economic zones were allowed to adopt up to 100% work-from-home (WFH) arrangement, without the loss of tax incentives provided that IT-BPM/BPO firms shift registration from the Philippine Economic Zone Authority (PEZA) to the Board of Investments (BOI).
Trade relations between the U.S. and the Philippines date back to as early as 1946. Both countries have strong bilateral economic relations and investment partnerships.
U.S. imports of services from Philippines were an estimated $4.1 billion in 2020, 26.2 percent ($1.5 billion) less than 2019, but 53 percent greater than 2010 levels. Leading services imports from Philippines to the U.S. were in the professional and management services, telecommunications, computer, and information services, and travel sectors.
Digital-First
The Covid-19 pandemic has emphasized the need for businesses to the adoption of unified cloud-based applications, new technology, and process automation.
Since the start of Covid-19, 85% of executives said their businesses have somewhat or greatly accelerated the implementation of technologies that digital enable employee interaction and collaboration—in a matter of weeks vs. months or even years (McKinsey)
The adoption of a digital-first approach plays an important role in the Philippine business process outsourcing industry, and the Philippine economy in general.
The 2021 Digital Worker Experience Survey found out that nearly 80% of workers are using collaboration tools for work in 2021, up from just over half of workers in 2019, an increase of 44% since the pandemic began.
Aside from collaboration tools, the need for intelligent automation technologies such as Robotic Process Automation (RPA) and Artificial Intelligence (AI) accelerated as these provide a customized customer journey, enabling more efficient business processes and improved overall client and employee experience.
IBPAP’s roadmap forecasts that the digital transition will create an additional 388,000 mid-skilled jobs and 309,000 high-skilled positions by 2022.
According to a 2020 analysis by global consulting firm Kearney, the economic impact of AI in the Philippines in 2030 (% of 2030 GDP) is 12% of a potential $92 billion GDP.
Conclusion
- The Philippine culture is compatible with the U.S. culture. The Philippines is regarded as a highly literate and proficient in speaking in English.
- When outsourcing to the Philippines, you have access to a wide, highly specialized talent pool with the right technical skills.
- The U.S. and the Philippines have strong bilateral economic relations and investment partnerships.
- Investors outsourcing business processes to the Philippines are eligible to fiscal and non-fiscal incentives. Philippine tax laws were legislated to promote investments in the growing Philippine BPO industry.
- According to IBPAP’s roadmap, it is forecasted that digital transition will create an additional mid-skilled jobs and high-skilled positions by 2022.
Connext Global Solutions provides Quality Business Process Outsourcing Solutions
Connext Global Solutions is a renowned Philippine business process outsourcing provider that builds industry best business process outsourcing solutions through its commitment to management philosophy and leadership development at all levels.
Connext Global Solutions helps manage a client’s team as if it was theirs and makes sure the performance matches or exceeds that of your local teams.
Industries Connext Caters to:
1. Healthcare Providers
2. Distribution
3. Telecommunications
4. Title and Escrow
5. Property Management
6. Accounting
7. Banking
8. Technology
9. E-Commerce
10. Retail
11. Construction
12. Professional Employer Organization
13. Insurance
Connext Global Solutions provides:
- Geographically diverse talent
- 100% virtual recruitment and employment process
- Productivity, utilization, and quality monitoring
- Dedicated account management
- Standing IT support
- Talent management and employee engagement
Connext provides fully customized outsourcing solutions for organizations looking to innovate and grow. Work with Connext Global Solutions today.
References:
Tholons’ Global Innovation Index for 2021. http://tholons.com. Tholons. Accessed November 3, 2022.
Priya Sunil. Asian countries with the highest English proficiency: Singapore, the Philippines, Malaysia & more [2021]. https://www.humanresourcesonline.net/asian-countries-with-the-highest-english-proficiency-singapore-the-philippines-malaysia-more-2021. Human Resources Online. Published May 17, 2022. Accessed November 3, 2022.
All Economies of 17 Regions Recovered from the 2020 Pandemic and Recorded Positive Growths in 2021; CALABARZON was the Fastest Growing Region at 7.6 Percent. https://psa.gov.ph/grdp/grdp-id/167338. PSA.gov website. Published 28 April 2022. Accessed November 3, 2022.
U.S. Relations With the Philippines – Bilateral Relations Fact Sheet. Bureau Of East Asian And Pacific Affairs. https://www.state.gov/u-s-relations-with-the-philippines/. U.S. Department of State. March 3, 2022. Accessed November 3, 2022.
2019 Investment Climate Statements: Philippines. https://www.state.gov/reports/2019-investment-climate-statements/philippines__trashed/. U.S. Department of State website. Accessed November 3, 2022.
Higher-value-added BPO services and creative industries gain traction in the Philippines. https://oxfordbusinessgroup.com/overview/outsource-pride-promoting-sector-evolution-through-higher-value-added-services-and-creative-industry. Oxford Business Group. Accessed November 3, 2022.
Arius Lauren Raposas. BPOs move away from ecozones to keep WFH for workers. https://www.yugatech.com/news/bpos-move-away-from-ecozones-to-keep-wfh-for-workers/. Yugatech. Published April 3, 2022. Accessed November 3, 2022.
What 800 executives envision for the postpandemic workforce. https://www.mckinsey.com/featured-insights/future-of-work/what-800-executives-envision-for-the-postpandemic-workforce. Mckinsey. September 23, 2020. Accessed November 3, 2022.
STAMFORD, Conn., Gartner Survey Reveals a 44% Rise in Workers’ Use of Collaboration Tools Since 2019. https://www.gartner.com/en/newsroom/press-releases/2021-08-23-gartner-survey-reveals-44-percent-rise-in-workers-use-of-collaboration-tools-since-2019. Gartner Press Release – Newsroom. August 25, 2021. Accessed November 3, 2022.
