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The article aims to provide insight on why investors should consider outsourcing to the Philippines.

Why Should I Invest In Outsourcing to the Philippines?

The Philippines remains a lucrative business process outsourcing destination to investors as it provides countless advantages in its economic landscape. Among its flourishing industries is the service sector, particularly the Philippine outsourcing and the business process outsourcing (BPO) sectors.

BPO and the Philippine Economy

The Philippine Business Process Outsourcing industry contributes nearly $30 billion to the economy each year. It is estimated that 1.3 million Filipinos were employed in over 1000 BPO companies in 2019, and that figure is showing 8-10% growth every year. It is estimated that the country holds 10-15% of the global BPO market. (Nexford Insights)

Higher inflows from overseas Filipino workers (OFWs), the business process outsourcing (BPO) sector and foreign investments, along with continued vaccination against coronavirus disease 2019 (Covid-19), are expected to support the country’s balance of payment (BOP) position. 

Investors outsourcing to the Philippines are also eligible to fiscal and non-fiscal incentives. Tax Laws such as the 1995 Special Economic Zone Act were legislated to promote investments in the growing Philippine BPO industry.

According to the website, “The 1995 Special Economic Zone Act allows Philippine Economic Zone Agencies (PEZAs) to regulate and promote investments in export-oriented manufacturing and service facilities inside special economic zones, including grants of fiscal and non-fiscal incentives.”

Under the 1995 Special Economic Zone Act, foreign companies are eligible to countless tax incentives and privileges. Among these are:

– Income tax holiday of 4 to a maximum of 8 years for non-pioneer and pioneer projects respectively;
– A special tax rate of 5% of gross income in lieu of all national and local taxes after the income tax holiday;

– Additional deduction for incremental labour expenses and training expenses;

– Permanent resident status for foreign investors and immediate family;

– Employment of foreign nationals

– PEZA-registered Economic Zone Enterprises 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. PEZA has 1,274 IT locator companies operating in 297 IT centers/parks as of December 2021. They reportedly provided 1,017,559 jobs nationwide with exports amounting to USD 15.797 billion.

Connext Global Solutions provides Quality Business Process Outsourcing Solutions

Connext Global Solutions is a renowned Philippine 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 handles business process outsourcing talent acquisition, management, and training for you. The company actively sources offshore talent required by the client. Comprehensive assessments, screening, testing, and interviewing are conducted by Connext, ensuring the client the highest level of talent from the pool.

Connext redefines business process outsourcing to the Philippines by providing fully customized outsourcing solutions for organizations looking to innovate and grow. Build your Philippine outsourcing workforce with Connext Global Solutions today.