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Home » Articles » The Philippines is still the favorite outsourcing destination of the world

The Philippines is still the favorite outsourcing destination of the world

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There is no doubt that outsourcing is not just a business trend. More than just a temporary option for conducting business, outsourcing has become a vital part of investment ventures because it does not only cut costs but also broadens company perspective. Why? Because it is just like globalizing operation which helps any business owner access cheap labor and raises the bar for service delivery because of the abundance of available talents to take on the job. And in this great big scheme, the Philippines is still the favorite outsourcing destination of the whole world.

Having said that, companies from the US, Australia, UK and other outsourcing countries have constantly been hiring talents around Asia, South America, and Eastern Europe. The synergistic relationship between these countries has, in turn, become a strong foundation upon which many countries manage to increase their financial capabilities.

This has been the case in the Philippines for quite some time now and, in fact, this country is the preferred calling partner of the rest of the world. It may be second to India in terms of total market size but it is still the first choice of English speaking countries. Let’s know more about the reason the Philippines is still the favorite outsourcing destination of the world.

The “More Fun in the Philippines” state of mind continues

Yes, the Philippines is perhaps the best place to loosen up your tie, put down your briefcase and wear your most colorful summer getups, but it’s not just a good place for vacationing. The “more fun” state of mind applies to just about anything in the Philippines.

Take, for example, the people. Filipinos are the best resources the country has to offer. The skill is so rich and competitive in any industry that the country ranks high in different categories of business process outsourcing. Globally, in 2017, the Philippines is the 7th leading country in offshore business. This is largely due to the number of capable phone staff assisting multi-million-dollar enterprises with their customer relations, sales, and technical support requirements.

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Filipinos love communicating, that is why they are not just fluent, they are also very patient on the phone. They are not just popular for their neutral accent but also their skills in understanding, helping and pacifying customers, whatever the situation requires. Filipinos are natural born troopers, so whenever necessary, they are willing to go an extra mile for their partners and customers.

Compared to their BPO counterparts, Filipino workers provide very affordable yet quality services and skill set as well as the ability to advance to an expert level support provider.

The Filipino culture is very adaptive, in fact, the new Filipino workers boast of their being “limitless” in the workplace. The once restrictive society now has become a massive collection of achievement driven and vibrant professionals. They are ready to take on any challenge and have fun while doing it.

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Business is lighter, business is brighter

After experiencing several ups and downs in the past, the Philippine government, as well as Philippine-based companies, have become more agile in dealing with economic challenges. Whatever the situation may be, investors can stay secured that Filipinos always come through with a solution, that includes learning new things to stay ahead of the competition.

For instance, investor confidence was seriously damaged by the political turmoil and the changes in tax policy in 2017.  Investors sought to address the risk by looking for new locations for their centers without shelling out more cash investment with their sudden shift.

Contrary to expectations, the Philippines continues on a path of 6% economic growth rate despite talks of country risks. The president’s resolute decision making and his strong opposition to terrorism reaped the support of each Filipino worker as well as the confidence of foreign stakeholders in doing business in the Philippines.

Also, the government is quick to see the issues that can ushers these investors out of its territory when it enacted the Train Law (Tax Reform for Acceleration and Inclusion) which defined a new tax system scrapping the preferential tax rate (PTR).

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Early this year, there was confusion going around about the Train Law, so the Philippine Association of Multinational Regional Headquarters Inc. (PAMURI) argued that stakeholders or ROHQs registered before January 1, 2018 “shall continue to be entitled to PTR.” Ultimately, that was vetoed by the President and now working professional as well as proprietors need only to pay a flat rate of 8% tax against their annual earnings, as compared to 10% and 15% withholding tax previously imputed based on earning brackets. What worried businesses before now become an enticing way of doing business for multinational companies.

Technology know-how increases

There was a rumor that came out last year that employment in the country will suffer a great loss because of the coming of artificial intelligence. The 2017 AT Kearny Global Service Location Index put “more than 1 million jobs at risk in four countries alone: The United States, Poland, India, and the Philippines.”

According to the report, machine deep learning is threatening the Filipino customer service professionals as artificial intelligence in the area of voice services improve. This is further given weight by the declaration that only “one new automation management position is created for every four jobs that automation replaces.”

In the face of losing jobs to machines, the Philippines displays tenacity and consistency as more and more companies are setting up operations in the country. The question of voice works being replaced by automated answering machines is still out of the question because machine deep learning still has miles to go before it could catch up with the customer relation skills of the people. Also, service providers proved their adaptability and flexibility as new roles are created to keep the workforce working.

More skilled professionals now moving to home-based setup

More and more outsourcing companies are seeing the value of letting their employees work at the comforts of their homes. It saves them money for infrastructure, helps them easily get a hold of their employees at any time of the day, and it even provides some level of help for addressing the country’s traffic problem.

Take for example the efforts made by Hivelabs Technologies Inc. They started off as a small group of home-based web and apps developers. Now, the company does not only have its own office but has grown into a network of home-based professionals located in different locations within Greater Manila Area and Davao providing Web Development, Apps development, and Digital Marketing. Like many other service providers, the company has established its channel partner program and are now on their way to providing training to other companies as well.

The conclusion: it is still more fun in the Philippines

Looking at the big picture, the Philippines is in the pink when it comes to outsourcing and offshoring. All the negative views made prior to 2018 are now proving to be merely unfounded opinions as the country displays a steady stance in business process outsourcing. As the Filipino worker becomes more adept at providing the services to its partners, more businesses are formed and more outsourcers join the scene. Better technology is put in place and a more positive outlook on politics, business and economy provide a stronger foundation for new outsources and a more secured business venture for the not so new businesses. Therefore, there is no doubt that the Philippines will continue to be the favorite outsourcing destination of the world.

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Outsource Accelerator is the trusted source of independent information, advisory and expert implementation of Business Process Outsourcing (BPO).

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Outsource Accelerator offers the world’s leading aggregator marketplace for outsourcing. It specifically provides the conduit between world-leading outsourcing suppliers and the businesses – clients – across the globe.

The Outsource Accelerator website has over 5,000 articles, 450+ podcast episodes, and a comprehensive directory with 3,900+ BPO companies… all designed to make it easier for clients to learn about – and engage with – outsourcing.

About Derek Gallimore

Derek Gallimore has been in business for 20 years, outsourcing for over eight years, and has been living in Manila (the heart of global outsourcing) since 2014. Derek is the founder and CEO of Outsource Accelerator, and is regarded as a leading expert on all things outsourcing.

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