Philippine outsourcing market on fast track to growth

By Freddie Pierce
Growing markets India and China continue to steal the outsourcing headlines, but the Philippines is quietly becoming an outsourcing hotspot. Industry e...

Growing markets India and China continue to steal the outsourcing headlines, but the Philippines is quietly becoming an outsourcing hotspot.

Industry experts expect the Philippine outsourcing market to grow strongly over the next five years. Business Processing Association of the Philippines chief Alfredo Ayala says the country is currently No. 2 in the world behind India, with 600,000 outsourced workers.

“It may slow down, but it’s still going to be double-digit growth,” Ayala told a group of reporters at an outsourcing conference in Manila.

According to Ayala, the Philippine outsourcing business is expected to grow by at least 15 percent each year to $20 billion by 2016. Ayala expects the English-speaking nation to have about 900,000 outsourcing workers in five years.

Currently, the Philippines accounts for just under 7 percent of the global outsourcing market, a distant second to India’s 51 percent share. The Philippine outsourcing market covers most BPO functions, including call centers, information technology, health care and legal work.

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Call Center jobs could be in danger to decline, with computer software taking on a larger role and replacing humans at such tasks. That’s the nation’s biggest fear at the moment, as call center outsourcing accounts for roughly 65 percent of Philippine outsourcing.

The country’s other growing outsourcing sectors are expected to offset that decline, however.

“Back office, health care, creative services, and IT are becoming quite attractive here,” Gillian Joyce Virata, senior executive director for the business processing association, said.

The Philippines are certainly counting on their growing outsourcing market. Trade Secretary Gregory Domingo said that the outsourcing sector was one of the Philippines’ economic pillars, and that the 2011 revenue target of $11 billion would be about 5 percent of the nation’s gross domestic product.

“The contribution of this industry cannot be overstated. It's really a very big help,” Domingo said. “It has provided a very big support to the economic environment of the Philippines in the past decade.”

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