Business Process Outsourcing in the Philippines

Abstract

The Philippines has over time developed a strong and adaptive economy amongst its Southeast Asian peers as demonstrated by its resilience during the global financial crisis of 2008. One industry that has grown increasingly important to the economy is the Business Process Outsourcing (BPO) sector, which has grown to be fastest growing sector in the Philippines, second only to India on the world scale. BPO has been defined as the delegation of all or part of the technical, process and human resources.. Today, the BPO industry in Philippines may be categorized into six subsectors: voice BPO (or call centers), back-office BPO (mainly finance and accounting services), transcription (mainly medical and legal transcription services), animation, engineering services, and software and digital content (including game development).

This case study examines the factors in the growth of the BPO industry in the Philippines, focusing on the rise of the “next wave cities”, such as Metro Manila, Metro Cebu, and Metro Clark, facilitated by the availability of an educated and effective labour force as well as infrastructure and government commitment that has fostered growth in BPO. The key challenges the country faces to maintaining this remarkable industry is the development in communications technology, such as automation towards its less skilled jobs, building a more coherent tax policy that is business-friendly, as well as improvement in further developing talents and marketing of the Philippines as a premier BPO destination.

This is part of the Lee Kuan Yew School of Public Policy – Microsoft Case Study Series on IT, Public Policy and Society.