The Philippines Outsource Industry – 2010-11 Overview
Philippines outsource firms are continuously bolstered by reports from McKinsey & Company that state that global demand for outsourcing services will reach $180 billion in 2010. Outsourcing in the Philippines has become a key industry in the country’s economy. Outsource earnings are expected to grow to $11 to $13 billion in 2010.
The growth of the Philippines outsource sector
The BPO Philippines industry has grown 46% each year since 2006, a positive development led by the call center industry, which accounts for eighty percent of the total Philippines outsource sector. At the end of 2008, the number of workers employed by different companies outsourcing in the Philippines reached 435,000, according to the Business Process Association of the Philippines. This number is forecast to grow in 2010 with the addition of 900,000 workers.
Spurring this growth are the various fiscal and non-fiscal incentives offered by the Philippine government in the 2007 Investment Priorities Plan. These incentives generate interest from foreign investors, and its main beneficiary is the Philippines outsource industry, which is the third largest BPO industry in the world with 15 % of global BPO market share.
IT outsourcing initiatives
It is also becoming a primary destination for IT outsourcing ventures. The US-based Meta Group ranks the country first in availability of knowledge-based jobs and fourth in Asia in labor quality. Philippines outsource services, such as web design, search engine optimization, software development, and animation, are sought after by major Hollywood studios. The low cost and high quality of IT outsourcing in the Philippines has made it an integral destination for many IT firms worldwide.
Aside from IT outsourcing and call center outsourcing, which is still the dominant Philippines outsource sector, legal transcription is growing. Philippine familiarity with American legal terms, precedents, and rulings is central to this industry. Some of the work involved includes drafting legal documents, as well as transcribing recorded voice data in depositions and courtroom testimonies.
Medical transcription and data entry outsourcing in the Philippines help hospitals in the United States to manage billing statements, claims, and medical reports. Training is a top priority. In 2006, the Technical Education and Skills Development Authority (TESDA) prescribed a curriculum for the Finishing Course in Medical Transcription, a training program for potential Filipino transcriptionists.
Business process outsourcing in the Philippines involves specific functions, such as human resource administration and accounting, which are called “back-office” functions because they are not central to a business’s core competencies.
Philippines outsource companies have identified some advantages in the industry. With the employment costs in India rising 15% in 2006, Philippine wages are considered more affordable. The typical annual salary scale for entry level employees is $3,000 to $6,000.