Outsourcing to Asia: Philippines vs. China

Philippines vs. China: which is the better outsourcing destination?

The Philippines and China both offer strong talent and modern facilities, but the Philippines usually wins on English skills, open internet, and lower cost.

• The Philippines leads on English proficiency and cultural fit with Western firms.
• China brings a huge labor pool and top-grade infrastructure in big cities.
• The Philippines still offers better rates for most outsourced roles.

Today, many global businesses look to Asia to fill staffing needs. For example, these roles span IT and web development, digital marketing, and customer service support. So in this “Outsourcing in Asia” series, we compare why the Philippines stands out against other Asian markets.

In this first edition, we look at staff leasing and outsourcing in the Philippines vs. China.

The Philippines ranks among the world’s best Staff Leasing and business process outsourcing markets. Reuters once called it the new “outsourcing capital of the world,” ahead of India. With more than 50 IT-BPO firms already leasing call center seats in Metro Manila and Visayas, the industry keeps growing fast.

China, meanwhile, is newer to the BPO scene. Still, its large talent pool and strong infrastructure in cities like Beijing and Shanghai make it a real contender.

Both markets share many features, so both suit multinationals that want to outsource key functions. However, a few clear differences can help you pick the better fit. Below, we compare them point by point. For a wider view, see why the Philippines ranks as a top outsourcing destination.

English proficiency

The Philippines is a world-leader in English proficiency. It still ranks among Asia’s strongest nations for English and scores well above the global average. This fluency traces back to years of American influence. As a result, English is a required subject from kindergarten through high school.

In fact, proof shows in the market itself. For example, many of the world’s largest BPO players now run big operations in the country.

China, by contrast, pushed English fluency only in recent decades. English became a required school subject there in 1988. Since then, millions of Chinese people have learned to read, write, and speak it.

Even so, fluency in China stays far below the Philippines. Its national English score sits under the global average today.

When it comes to English, the Philippines has the edge. After all, the language runs through Filipino life, from school to entertainment. Meanwhile, some multinationals once avoided China over its country’s perceived lack of English fluency, which made managing local teams harder.

Modern infrastructure and call center facilities

The Philippines hosts many premium office buildings with call center seats for lease, mainly in Metro Manila, Iloilo, and Cebu. Many hold LEED certification. That means local developers follow green standards, use sustainable materials, and cut energy use.

These buildings are also well equipped. In addition, they come with the latest hardware and strong connectivity. Meanwhile, multiple ISPs keep firms online during any downtime. In addition, fiber internet reaches all of Metro Manila and other outsourcing hubs.

Biometric access, modern PCs, and ergonomic office spaces for rent are standard across most buildings. So teams get comfortable, secure, and productive spaces.

Similarly, China’s infrastructure is impressive. Many buildings are LEED certified, and they meet every need a BPO has.

China has more Grade A buildings, yet the Philippines wins on cost. For context, older market data showed Manila office rents running far below Beijing’s, with space in Bonifacio Global City is just 800 PHP per square meter.

There is another factor to weigh. For firms that outsource to China, internet limits can make daily work harder. In 2017, China issued rules to tighten VPN use, which restricts many online tools that global teams rely on. Those curbs still shape operations there today.

The Philippines, on the other hand, has no such limits on internet use or access. Firms that want a nearby base can also set up teams in Metro Manila with ease.

Education and talent acquisition

The Philippines holds a high literacy rate of around 97%. It also produces an estimated 700,000 or more college graduates each year. These grads come from many fields, from finance and law to business and IT. Given this deep talent pool, finding skilled leased staff in the Philippines is rarely a challenge.

Still, China brings scale of its own. Its huge labor pool of hundreds of millions of workers draws many multinationals. In addition, many graduates come from IT, which helps firms that need testers and developers.

Overall, both countries offer the facilities, people, and skills to help firms grow. However, companies that want the best cost savings often find the Philippines the friendlier option. It mirrors China’s strengths but comes with lower rates. To compare setups, review staff leasing, seat leasing, BPO, and B-O-T models.

Cost & salaries

Meanwhile, labor cost is where the Philippines shines. In fact, historical PayScale data showed Philippine wages sitting well below many other countries.

For example, take web developers. US and Australian firms can save a lot by hiring in either country.

Both markets offer top talent, yet the Philippines again offers better rates for the same experience. In one comparison, a Philippine web developer earned far less per year than a peer in China . That gap ran into several times the cost. For current figures, see the average salary in the Philippines.

Similarly, the same holds for customer service roles. A CSR in China has long cost far more than one in the Philippines. So the savings add up across most positions.

Put the two points together, and the case is clear. Strong education plus low cost makes the Philippines a smart choice for firms that want to scale. KMC is one of the pioneers for Staff Leasing in the country. To see the wider picture, explore the state of the Philippine BPO industry.

Ready to expand into the Philippines? Contact us today to get in touch with Staff Leasing experts.

Frequently asked questions

Is the Philippines or China better for outsourcing customer service?

For English-heavy customer service, the Philippines is usually the stronger pick. Its agents speak fluent, neutral English and fit Western culture well. China suits firms that need support for the local Chinese market instead.

Why do many companies choose the Philippines over China?

Many firms cite three reasons: better English, open internet, and lower cost. The Philippines also has a long BPO track record. As a result, it feels like a safe, proven base for global teams.

Does China have any advantages over the Philippines for outsourcing?

Yes, China offers a larger labor pool and more Grade A buildings. It is also strong in IT, testing, and development roles. However, internet limits and higher wages can offset those gains.

What roles can I outsource to the Philippines?

You can outsource many roles there. Common ones include customer service, IT, web development, and digital marketing. Back-office tasks like accounting and data entry work well too.

How much can I save by outsourcing to the Philippines?

Savings vary by role and seniority. Still, many firms cut labor costs by a large margin versus hiring at home. Lower office rents and open internet add to the savings.