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7 Facts and Forecasts:

The BPO Industry in the


Philippines
3/12/ 2015   |   USource Team  |   BPO
CATEGORIES The Philippines’ Business Process Outsourcing (BPO) industry
has ‘edged out India’* as the call center leader of the world. BPO
BPO is now the biggest contributor to the Philippines’ gross domestic
Outsourcing product. We give you fast facts and numbers about it here.
Philippines

Also called the IT-BPM (Information Technology and Business


Process Management) sector composed of customer
relationship, support and KPO (knowledge process outsourcing
TAGS including digital agencies, software development and nancial
backroom services), it’s the country’s fastest growing industry.
air tasker
More and more investments are made and sealed every year.
assistant

Business Process
Millions of Filipinos work in the Middle East’s petroleum-
Outsourcing exporting nations, but remittances and work has decelerated
computer since the steep decline in fuel prices. Now Filipinos need only
Copywriting upgrade their skills and nd work in the local outsourcing sector
instead of doing menial labor abroad.
Delegate
disruption
US-based and European companies, in the current uctuating
Entrepreneur economy, largely outsource to the Philippines to cut costs AND
Flexible Staf ng remain competitive.
Freelancers

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Outsourcing
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Productivity tool

Project
management
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Small Business
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Time Management
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Assistant
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Virtual Team
zirtual
1. In the world’s offshoring destinations, the Philippines is
second only to India’s pioneering BPO industry. But in the
voice or call center sub-sector, we have already surpassed India
as global leader since 2010.

2. 2014’s $18.4 billion revenue was at 18.7-percent growth


compared to 2013.

3. Industry experts predict the industry revenue to reach $25


billion by 2016, and $55 billion by 2020. The IT and Business
Process Association of the Philippines (IBPAP) has a more
modest projection of $21.3 billion revenue for 2016.

4. Over a million are already employed in the BPO industry,


and 1.18 million more jobs are expected to be generated by
next year.

5. BPO revenue is almost equal to the revenue from


remittances coming from overseas Filipino workers.The local
BPO industry is now the biggest contributor to the Philippines’
gross domestic product. The Philippine Stock Exchange and the
Bangko Sentral ng Pilipinas (BSP) “have stated on record that
outsourcing will soon overtake the value of remittances from
overseas Filipino workers (OFWs) currently estimated at 10% of
annual GDP.”

6. The Philippines has become the top destination for IT-BPO


rms, and remains that way.
Several factors for the country’s success in BPO are:

scalable, educated talent pool


cost competitiveness
excellent infrastructure
a proven track record
adequate government support for the industry

In 2002, the then Department of Trade and Industry Secretary


Mar Roxas lobbied in congress to revise Republic Act 7916.
Buildings or oors in buildings could register as an ecozone. The
budding BPO industries were exempt from paying national and
local taxes, and only had to contribute 5% of their gross income
as tax.

Telstra Chief Executive Of cer David Thodey was in the country


in April 2015, to inaugurate the company’s 14th contact center
facility in the Philippines. He was quoted: “When we rst came
here, we were attracted by the country’s desire to build the BPO
market, the great personality and character of the Filipino
people, the culture, and willingness to work. We’ve seen a real
change in the last three years. We’re now getting real thought
leadership from the teams here in terms of best practices.”

7. 77% of the Philippines’ BPO export is for US-based


companies. The remaining 23% is shared largely by Asia-
Paci c.
The IBPAP aims to craft a new road map for the industry beyond
2016, setting new goals and strategies to secure the leadership
of the Philippine IT-BPO industry in the global offshoring space.
According to IBPAP Chair Danilo Reyes, the new road map
covers 2016 through 2022.

According to BSP Deputy Governor Diwa Guinigundo, BPOs


tend to grow regardless of economic conditions. In an interview
with the Contact Center Association of the Philippines (CCAP),
he noted the following:

if times are good, offshore companies need to outsource


non-core services to remain competitive
when their economies are not doing well, they have to
resort to outsourcing because of the need to cut on costs.

The BPO industry is also locally dubbed “the sunshine industry”,


and for good reason.

Now the age of the digital economy has arrived, and more and
more skilled freelancers and virtual assistants are contributing
to the outsourcing industry.

Sources:

– Philippine Daily Inquirer Business


http://business.inquirer.net/188861/it-bpo-sector-posted-18-7-
revenue-growth-in-2014
http://business.inquirer.net/196465/bpo-revenues-seen-to-
overtake-remittances
http://business.inquirer.net/201414/bpo-remains-fastest-
growing-industry-in-ph

– Rappler, BPO Philippines Timeline


http://www.rappler.com/brandrap/stories/98207-bpo-philippines-
timeline

– Business World Online, Finance


http://www.bworldonline.com/content.php?
section=Finance&title=growth-prospects-for-the-bpo-
industry&id=107125
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