Enterprise Features

Philippines Overtakes India in BPO Battle, Aspires IT and Software Development Domination

by ChrisJankulovski on 10/09/12 at 9:39 pm

It could come to a point where Hollywood will have to change the onscreen stereotype of a call-center agent, from a young kid from Mumbai to a young kid from Manila.

That’s because, as of 2012, the Philippines, with over $5 billion in revenues, has already surpassed India as the number one business processing outsourcing (BPO) destination in the world. The Philippines employs about 400,000 people at call centres, India employs 350,000. According to estimates, since 2010, over 70,000 jobs that could have gone to India  instead went to the Philippines.

This could be mostly due to the neutrality of the accent with which Filipinos speak English and their familiarity with American figures of speech. Also a big plus is the fact that the Philippines has a deep pool of well-educated talent, with over a million graduating each year.

And international companies aren’t drawn to Philippine BPO companies because they offer cheap labor. Philippine wages are actually higher than in India, and work at at call center is considered a middle-class job.

This has ironically resulted in some Indian IT outsource companies setting up shop in the Philippines as well. Companies such as Infosys, Wipro and Aegis have become well-established Indian in key Philippine cities such as Manila and Cebu. At the current rate, the Philippines could add another 700,000 BPO jobs by 2016 and generate annual revenues of $25 billion.

But a software developer working in an offshore IT company in India still makes more money than one based in the Philippines. The software industry in India has gained a brand identity for quality developers and low costs among Western clients for over 20 years.

This export-driven sector, led by companies such as Tata Consultancy Services, Infosys, Cognizant, Wipro and HCL Technologies,  contributes almost 10%  to India’s GDP in 2012.  However, the revenue growth is expected to slow down due to the economic problems affecting the US and most of Europe.

On the other hand, the Philippine IT sector was able to survive the global economic crisis, with employment going up by almost 30% since 2010. Demand for offshore services such as application maintenance (18.23%), software testing (12.56%), and custom application development (11.54%) are consistently going up.

The country’s IT sector is also preparing for further growth by implementing programs to enhance skill development, academic partnerships, infrastructure upgrades and even marketing campaigns promoting the various local companies offering  IT outsourcing services.

About The Author: Chris Jankulovski is the founder and CEO of Remote Staff, which he started in 2007 and is now the largest provider of home-based jobs for Filipinos, with over 400+ staff working with employers in Australia, the USA and the UK.

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