21 Feb

Emergence of Metro Manila as Outsourcing Capital of the World

Through the many call centers and outsourcing hubs situated within and outside Metro Manila, the Philippine Outsourcing Industry was able to showcase Filipino professionalism and talent globally. In 2018, Goldman Sachs, the leading investment banking, management and financial firm named it as among the Next Eleven Economies. The firm projected the country to be the 14th largest economy in the world by 2050. Currently an emerging market economy, it is exponentially drawing investors in. Multinational firms like Toyota, IBM and Intel had been mainstays in the Philippines for several years. Investors use them as markers in their feasibility studies before venturing. From them, economic and business analysts are able to quantify investment profitability in the country.

Metro Manila Outsourcing

Kittleson & Carpo Consulting recorded that 3 new BPO companies were registered weekly in the Philippines in 2018. The country is still the desired location of many western-based firms for inbound offshore outsourcing operations shown by the $14B in earnings and 1.9M jobs produced last year.

The allure of lower operational costs, low domestic wages and a proficient English-speaking workforce tighten the country’s pull. The Philippine peso’s foreign exchange rate value and wage inflation restrictions also stimulate the influx of foreign investments. A single US dollar investment is multiplied fifty two times as of 2018. Further, the Philippine focus shift from agriculture to service industry in the past decade made Metro Manila the business process outsourcing (BPO) leader and outsourcing capital worldwide; selling quality services and products to developed markets.

According to the 2018 report of the Texan global consulting firm, The Everest Group, the Philippines takes 16 to 18% of the global outsourcing market share. Six of its cities made the 2018 Tholons Top 100 Global Outsourcing Destinations.  Manila ranked second place. This ranking is based on business catalyst, operational efficiency, digital adaptability, financial infrastructure, scale and talent availability, cost effectiveness, quality, functional capabilities and sustainability. The country’s top universities offering multiple disciplines are found in the city so there is abundant availability of highly skilled workers. This attracted the first BPOs to set office in the city.

BPOs in Manila are already mature and well-established. From pioneering, outsource vendors here have developed deep expertise in servicing global corporate functions for over a decade. This maturity led to the expansion of these Manila-based BPOs to other logistically and financially advantageous neighboring cities and provincial metro locations. Multiple outsourcing hubs are currently operating in Makati, Pasay, Muntinlupa, Ortigas Center, Pasig, Mandaluyong, Quezon City, Cebu, Davao, IloIlo, Bacolod, Sta. Rosa and Baguio.

The robust and lucrative information technology and business process outsourcing sector in these major areas ensure horizontal business growth to buyers as the BPOs goal is to meet their deliverables for mutual benefit. Outsourcing companies see to it that the service they provide level, if not, exceed world standards. This mission concisely serves the outsourcer’s vision.

Out of the 851 registered BPOs in the country 65% of the outsourcers are US firms. Others from Europe, Australia and New Zealand are also growing in number. Half of these companies purchase medical transcription, data entry, IT-related and animation production services while the other half are call centers. The well-organized and collaborative effort of the government and industry players who coordinate closely in keeping the country’s spot in the global scene made this possible. For inquiries, you can write to bd@athl.com.hk

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