The Philippines has remained the largest offshore location and site selection destination for business process outsourcing (BPO), specifically call centers.
In particular, the Philippines is ahead of fellow offshore destination India and US nearshore locations in Central and South America.
In a recent Site Selection Group report, US companies can consider the Philippines in developing a global site selection strategy.
According to the Dallas TX-based group, the report is a guide on where a company can locate its next call center or back office location.
“The growth of the Filipino call center market has been phenomenal ever since,” Site Selection Group said. Further, it said the Philippines has overtaken India as the largest offshore market specifically for voice-related call center work.
Moreover, it cited Contact Center Association of the Philippines (CCAP) data stating an estimated 1.3-1.5 million call center workers.
Over 1,000 BPO companies are in fact operating in the Philippines doing various call center and back office work. Notably, the Philippine call center industry has become approximately 10 percent of the country’s Gross Domestic Product (GDP), it added.
“As the market rapidly matured, it attracted name brand companies like Amazon, Google, Wells Fargo and others who have set up captive, in-house operations,” Site Selection Group revealed.
It added: “Many companies are now expanding into tertiary markets like Cebu, Davao, Dumaguete, Clark and Baguio as the labor market in Metro Manila becomes more saturated.”
However, it said market disruptors can impact site selection strategies in these call center locations.
“In a global economy, there are so many factors that can disrupt growth within a region,” Site Selection Group stressed. This is especially true when considering nearshore and offshore markets in site selection.
In particular, they include political instability, government legislation, currency fluctuations, wage inflation, unionization, automation, and emerging industries like online gaming.
Site Selection Group particularly cited the difficulty in getting tax holidays on revenue from the Philippine Economic Zone Authority (PEZA).
“The migration of call center jobs onshore and offshore will continue with the economic cycles of the global economy and the fickleness of corporate America,” it said. “Companies will continue to battle with finding qualified call center workers at a reasonable cost as the industry grows unless it is disrupted by other factors.”
India and the Philippines may have benefited from the call center industry’s astronomical growth over the last couple of decades. However, growth is subsiding.
In its April report, Site Selection Group said Philippine growth has dropped 9 percent from an average 17-percent growth rate through 2022.
Chiefly, it identified five factors causing the slowdown, like larger-scale market, a stronger US economy, and technological advances. Moreover, it identified competition from Latin America, and government policies both in Washington and Manila.
“India and the Philippines will continue to be the dominant offshore markets due to their scalability, cost benefits, industry knowledge-base and many other factors,” Site Selection concluded. “However, these countries need to be prepared that lower growth rates are likely here to stay.”
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TDShas established key partnerships with organizations to serve and stimulate growth in the IT-BPM industry. It has spent decades providing outsourcing solutions, management consulting services, talent assessments, executive recruitment, and vendor selection & management for crucial departments of call center operations. For more info, please email TDS at marketing@tdsgs.com or dial US number (1-888) 788-4441.
