Philippines Sector Brief – Business Process Outsourcing

I. Quick Facts
• The Philippines is world’s no. 1 in Voice Services and no. 2 in Business Process Outsourcing with 1.2M jobs
• Recorded a 18.7-percent growth in revenue in year 2014, reaching $18.4B, and $22B in 2016
• Projected revenue is $55 billion by the year 2020, which is around 11% of the PH GDP
• Compound annual growth rate of 10% in the past decade
• 27% share in total exports
• The country hosts 120 BPO firms. Call center employees is estimated to be around 1.1 million
• Biggest strengths of the sector: excellent, English speaking and trainable labor force, low labor cost, lower expansion cost, diverse and inexpensive site locations, strong government support

II. Business Opportunities
• Foreign businesses that have outsourced to the country assess 30% to 40% business cost savings, 15% to 30% savings for call center services and application systems
• IT-BPM is one of the six sectors in the Investment Priorities Plan (IPP) which gives incentives to investors
• The Philippine Economic Zone Authority (PEZA) provides incentives for companies engaged in IT-BPO activities.

III. Key Players
• Accenture Inc. (Php32.429 billion)
• Convergys Philippines Services Corp.
(Php19.830 billion)
• 24/7 Customer Philippines Inc.
(Php13.061 billion)
• JPMorgan Chase Bank N.A.-Philippine
Global Service Center (Php11.789 billion)
• Telephilippines Inc. (Php8.722 billion)
• Sutherland Global Services Philippines
Inc. (Php8.080 billion)
• Hewlett-Packard AP (Hong Kong) Ltd.
(Php7.081 billion)
• Stream International Global Services
Philippines Inc. (Php6.924 billion)
• Teletech Offshore Investments B.V.
(Php6.590 billion)
• IBM Daksh Business Process Services
Philippines Inc. (Php6.307 billion)

IV. Challenges
• Issues in talent recruitment
• Second slowest internet speed in Asia, next only to Afghanistan with 2.5 mbps
• Transportation problems and slow infrastructure growth
• Increasing energy costs
• Competition with other Southeast Asian countries due to ASEAN Integration

V. Trends
• The BPO industry will continue to grow and the Philippines will maintain its position as a top outsourcing destination
• Rise in popularity of service delivery automation, including robotic process automation (RPA)
• Increase in demand for Knowledge Process Outsourcing (KPO), with the market expected to grow at a combined annual growth rate of 23 percent in 2019.

Sources: Oxford Business Group The Report: Philippines 2015, Doing Business in the Philippines Booklet by BDO Alba Romeo, The Philippine Star, Inquirer Business, KMC Solutions – BPO Challenges, KMC Solutions – ASEAN Integration Challenges, Manila Standard Today, Rappler, Philippine Institute for Development Studies, Philippine Daily Inquirer, Business Mirror

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Sectors: Business Services and Contact Centres
Countries: Philippines
Topics: Market Research
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