I’m home! I thought it would be appropriate to write about the Philippines while I’m in town. It’s been 2 years since my last trip here. A family occasion gave me the opportunity to visit home this close to Christmas. I surely miss the vibrant colors, vitality and noise of the streets filled with jeepneys. I miss the company of friends and family. I am currently at a local coffee shop right in the heart of Metropolitan Manila’s business district – Makati. Like so many others, I come here mainly to connect to the internet and the coffee is just secondary.
I am part of a Shared Services organization based in Florida. Due to a scheduling conflict, I am tasked to work during the first two weeks of December even though I am in a different time zone (13-hour difference). Indeed, technology has broken the barriers to work and collaboration. Something that – decades ago – one can hardly imagine doing. I work nights (usually until 1am) to catch-up with the US Eastern Time zone.
It is not as if I am the only one working the night shift in Metro Manila and in many major cities in the Philippines. I am comforted by the fact that I work at the same time as thousands of service agents and consultants providing services to the US and Europe. In Makati, it is pretty common to see heavily lighted high rise buildings at night. After all, the Philippines is one of the main centers of business process outsourcing (BPO) and shared services in the world.
The Philippine BPO industry provides a wide portfolio of services that not only include traditional voice and IT services but also higher value services such as finance, IT programming, engineering, medical transcription and architectural services.
Business Process Outsourcing
According to Tas, J. & Sunder, S. in a journal entitled Financial Services Business Process Outsourcing published in 2004.
“Business process outsourcing (BPO) is a form of outsourcing that involves the contracting of the operations and responsibilities of a specific business functions (or processes) to a third-party service provider. Originally, this was associated with manufacturing firms, such as Coca Cola that outsourced large segments of its supply chain.”
BPO can be categorized into two types—front office and back office outsourcing. Front office outsourcing is typically related to customer services and contact center services while Back office usually refers to support and administrative functions such as human resources, finance and accounting.
Based on service location there are two types of BPO—Nearshore and Offshore outsourcing. For example, relative to United States, BPO service providers in Mexico can be considered a nearshore outsourcing as compared to BPO services provided to US companies from Asia Pacific countries, like the Philippines.
Why Philippines is a First-rate BPO location
Amid the global economic crisis, the BPO industries in the country have remained strong in 2009. Industry experts in the Philippines expect 35% growth this year. According to the Business Process Association of the Philippines (BPAP), the biggest organization of outsourcing providers in the Philippines, the outsourcing industry will earn about $12 billion to $13 billion and employ close to 900,000 people in 2010.
The Philippines has remained one of the most ideal locations for companies who outsource business processes and services. Filipinos are known to be highly skilled, hardworking, dedicated and loyal. There is a known Filipino trait called “malasakit” (in local Filipno language) that means genuine concern and care. Filipinos are known to exhibit this quality in the workplace. Skills and hardworking attitudes guarantee strong performance and productivity, while on the other hand, dedication and loyalty translates to better talent retention, less training costs and experienced service personnel. The Philippines is also considered as the location of choice due to its less expensive operational and labor costs, as well as having an English-speaking workforce (the result of English being the main medium of instruction in schools and universities in all educational levels). The Philippines, with the help of the Government and private sectors, has also developed a competitive infrastructure in terms of telecommunications, information and technology.
UK body proclaims the Philippines as World’s Best BPO destination for the 2nd time. The Philippines has won the 2009 Offshoring Destination of the Year category at the 4th National Outsourcing Association (NOA) Awards held October 15 at Park Plaza Riverbank in London. The Philippines bested Egypt, Malaysia, Russia and Sri Lanka among others. This is the second time that the country bagged the prestigious award category. The first time was in 2007. This was reported in a press release by BPAP last October 2009.
BPO Lifestyle
A lot of top multinational companies have service centers in the Philippines—Caltex, Citibank, HSBC, Procter and Gamble, Deutsche Bank and Dell, to name a few. It’s common for an individual to have at least one close family member who works in BPOs and services centers. It’s just that so many Filipinos nowadays work in BPO-related industries across the Philippines. My new sister-in-law, for instance, works in HSBC service center and my brother used to work there too— it’s where they met. This goes to show that indeed, business process outsourcing, offshore call and service centers are now part of Filipino lifestyle of service. We are known for our service— not just in BPO industries but in many industries— not just in the Philippines but around the world.
Image of Makati Skyline courtesy of Wikimedia.org
#Perspectives 
I agree Philippines is the No 1 or No 2 BPO destination in the world and I think everyone would agree with me. Now I would like to see the Philippines conquer the KPO arena as the No 1 destination for legal and accounting works. It’s taken a few more years to get the ball rolling here like in India but I think in 5 years Philippines could be the best.
Nice article. Yes, the Philippines is nowadays no different to any worldwide, international company, and as a country will only continue to grow and become a bigger force in the BPO world.
In fact, I believe that it will soon become THE destination of choice for anyone that wants to outsource business tasks overseas.
Just want to say your article is awesome. The lucidity in your post is simply striking and i can assume you are an expert on this field. Well with your permission allow me to grab your rss feed to keep up to date with succeeding post. Thanks a million and please keep up the respectable work
Yap no doubt at all that my country has become a world class BPO and IT location because of its hospitable culture, technologically enabled workplace and diligent, versatile workforce… Seemingly stable and dependable, the BPO industry is the fastest growing industry in the country, the key driver of the economy, generating investments and jobs and more importantly a major contributor in developing the country side. But my question here is how long kaya will the BPO boom last? Can the government sustain this advantage in BPO amidst the fluid political situation, intermittent threats to physical security, and increasing-worsening graft and corruption which is perceived to be the worst among East Asia’s leading economies. -art g.
Art,
This is a well written comment. Excellent input! You are right, the government needs to support the private sector in this, just like what the Indian government is doing helping India’s IT industry. You are really good my friend. Great insights. You will be an asset for the local government of Catbalogan. I hope you get the vote you deserve. I’m really proud of you.
Regards,
Hola
I’m the brother he mentioned in the latter part of the article and the new sis-in-law is my wife. I agree Filipinos exhibit versatile skill set that makes them suitable for BPO work. The mixed of dedication, good education, proficiency in English really pegged the Filipinos as one of the top class in this industry. In the future the country and private institutions should initiate aggressive investment to develop BPO offices not just at the finance capital of the country but even in other areas/municipalities/provinces. This will employ hundreds of thousands more and will give significant economic burst, not to mention helping in alleviating overcrowding and traffic in metro manila.
Good point Rye about how BPO is helping other cities in the Philippines besides those in Metro Manila. I heard that we have growing BPO businesses in Cebu, Davao, Baguio and even Tacloban. It will surely help develop other cities and will alleviate overcrowding here in Metro Manila. If there are opportunities in the provinces why do you have to move here? Good point!
ay, wikipedia na lang yung picture? 😛 hehe. But yeah, I agree that the Philippines is a first class BPO! Mas marami tayong edge with the other countries. Sa English pa lang, panalo na tayo! Chaka our positive thinking and being ‘masayahin’ is a plus. Ako, I don’t mind going back to Pinas and work with BPO’s there, kasi sa totoo lang marami din naman matutunan, di lang sya basta back office. 🙂
Yes, Ivy is not here, so no picture from her. I agree with you, that’s why I really wanted to write about BPO in the Philippines. I am proud of what Filipinos have achieved in this particular industry. I hope we continue to be competitive. Thanks for the comment.