What Makes the Philippines the Best Country for Outsourcing

Outsourcing means contracting out a business process by one business organization to a third party organization, which may be located either nationally or internationally (known as offshoring). This business movement is usually resorted to by the host firm as an alternative due to a lack in the number of skilled individuals needed to fit a certain job description.

Outsourcing, more so offshoring, has become a vital business tactic among many big and developing foreign companies due to the much more favorable economic advantages this move offers both the host and third party organizations. Its greatest advantage is the opportunity of the third party organization to earn profits through the creation of new jobs, while for the host company, much lower cost in overhead or operating expenses since employment in the chosen country is much cheaper than in theirs. Furthermore, host firms are offered various incentives by the third-party’s country, like income-tax holidays, vital off-site facilities, foreign investors and their immediate family members are granted permanent resident status, choice of paying a special 5% gross income tax instead of the local and national taxes, and so forth.

One country that has been among the top choices of many giant foreign firms around the globe, including a substantial number of Fortune 500 companies, as the ideal place where to outsource/offshore their services and other projects is the Philippines.

Though outsourcing in the Philippines began only in the 1990s, its worth already to ballooned to $1.5 billion in 2004 and to $9 billion in 2009. That’s a growth of $1.5 billion per year over a span of only 5  years. In 2013 the country was also able to edge New Delhi at the third spot in the 2013 top 100 global outsourcing destinations.

The trend only continues to lead towards the further growth of outsourcing in the Philippines as top companies in Australia have also began to outsource in the country. This is obviously due to the fact that outsourced projects and services are manned by English speaking individuals with a high literacy level. Outsourced jobs include call centers, customer relationship management, HR solutions, back office/chat support, creative processes, content writing, blogging, research, application maintenance, IT services, web design, software development, medical transcription, healthcare information management, legal services, and so forth.

Pinoy Partners Outsourcing Center Inc. (PPOC Inc.) is one company in the Philippines that has grown tremendously over just a period of two years. In 2013 one US-based company made a bold prediction about outsourcing in the Philippines; it said that by 2030 the industry will push the Philippines to becoming a trillion-dollar economy.

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