The Philippines has taken over the lead as the world's number one country for business process outsourcing and shared services, according to the 2010 IBM Global Locations Trend Annual Report.
Increasingly, multinational companies building an alternate support hub have been establishing their presence in the Philippines owing to the intrinsic strengths of the country's labour market, world-class telecommunications infra-structure and business environment.
With a 92% literacy rate and an abundant supply of nearly 500,000 English-speaking college graduates per year in relevant disciplines, the Philippines' affordable high quality workforce is valued by BPO firms for its strong work ethic, flexibility and productivity. Based on a survey of the McKinsey Global Institute, a relatively high proportion of Filipino finance and accounting professionals as well as life sciences professionals, researchers and analysis is suitable for work in a multinational organization and global work.
The Philippine IT/BPO industry spans across a wide range of competencies that include contact/call centers, business processing outsourcing (BPO), knowledge process outsourcing (KPO), medical, legal and other data transcription, film animation, software development, engineering and construction design as well as game or content development.
Top-notch telecommunications and low-cost real estate in major urban areas also contribute to the Philippines' global reputation as a BPO location.
Fiscal and non-fiscal incentives from the government have supported the growth of the Philippines' BPO industry. IT BPO enterprises enjoy an Income Tax Holiday (ITH) of 4 to 8 years and a special 5% tax rate on gross income after the lapse of the ITH, in addition to a host of tax and duty exemptions for capital equipment, deductions for labour expense, 12% input VAT exemption on allowable local purchases of goods and services and employment of foreign nationals.
The Philippines' BPO industry was recognized by the National Outsourcing Association in London as the Offshoring Destination of the Year in 2010. The Philippines first won the title in 2007 and again in 2009.
This year, the Philippines' sunshine industry is expected to yield some $11 billion in revenues or a 20% increase from the estimated revenue of US$9 billion in 2010 with over 500,000 employees.
In its IT-BPO Roadmap for 2011-2016, the Business Processing Association of the Philippines (BPAP) sees the Philippines' share of the global IT BPO market doubling to 10% by 2016 for $25 billion in annual revenues, if current conditions are sustained.
New locators share this optimism such as Tata's Consultancy Services of India, which recently opened its first Southeast Asian BPO center in the Philippines. The growing list of industry players include Accenture, American Express, Citibank, Convergys, DELL, Hewlett Packard, IBM, JP Morgan Chase Bank, and Siemens, among others.
Written by Makisig Bayani
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