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Rise of BPOs in the Philippines

Over the years the South Asian country of the Philippines has positioned itself as a Gold Mine of young talent skilled in the BPO industry. In this week's article, We will deep dive into the emerging tech sector of the Philippines.

Rise of BPO in Philippines

The BPO industry emerged in the Philippines in 1992 and it has been massively gaining momentum since its inception with the industry employing more than 2 Million Filipinos. The BPO sector is single-handedly responsible for contributing around $30 Billion to the economy of the Philippines. Globally speaking Philippines accounts for nearly 15% of the global BPO industry, just after India which contributes 28% and brings in $84 Billion to its economy.

Advanced economies like America, Britain, and various European nations outsource most of their tasks to various Asian or developing countries. In the beginning, companies used to outsource various clerical as well as repetitive work to other countries. However over the years as outsourcing became generalized these organizations started outsourcing various other aspects of the business. Present-day companies operating in advanced economies outsource a majority of their teams from other countries.

Outsourcing naturally turns out to be lucrative for organizations because it helps them tap into exceptional talent at a much cheaper rate. Outsourcing helps in cost-cutting and helps organizations scale their business by hiring a large number of employees at a much cheaper

cost. The introduction of BPO in various countries has also led to a rise of freelancers offering their services to various individuals as well as organizations while competing on a global basis. The BPO industry is majorly responsible for the rise of the gig economy.

BPO Services in the Philippines

The USA typically outsourced the majority of its back-office work to the Philippines. The majority of the outsourced work was concerned with the call center. Call centers have become a significant source of employment for Filipinos since their inception in 1992. Apart from call center and customer support, various other back-office operations related to IT, HR, and Finance have been outsourced to the Philippines. However, In recent times with technological advancements and a decentralized economy, various other services have been outsourced to the Philippines:

  • Transcription & Writing Services

  • Software Development

  • Animation & VFX Service

  • Game Development

  • Data Mining

These operations are generally labor-intensive and require skilled labor. However due to the internet as well as acceptance of remote work by various organizations these services are outsourced to the Philippines.

Why is the Philippines excelling in BPOs

The Philippines has shaped itself as an outsourcing hub in recent decades. It provides nearly 85% of its services to the USA. The other 15% is offered to counties like UK or Australia. There are various factors that are responsible for the Philippines turning into a favorable outsourcing destination. The primary factor is a high pool of youngsters nearly 30 Million.

According to demographic analysis, the average age in the Philippines is 24.5 years. This clearly points out the fact that the Philippines has a massive working-age population. The inclusion of English in the Philippines education curriculum resulted in the Philippines turning out to be the 4th largest country with a majority of English speakers. Additionally, the tone, as well as the ascent of Filipinos, are very easy to comprehend which makes them a perfect fit for outsourcing work.

The government of the Philippines plays a major role in the phenomenal because the government introduced various policies which helped in creating a conducive business environment for BPOs in the Philippines. Additionally, the education system of the Philippines which is ranked among the world's best has been responsible for providing a skilled talent pool to various organizations.

Exponential Growth of BPOs in Covid-19

COVID-19 has been a great beneficiary to the BPO industry around the world. BPO Hiring went up to 38% in the Philipines. Since the majority of the workplaces were closed around the world, BPOs immediately adapted to the work-from-home environment and started functioning on a remote work basis. Apart from that, various overseas organizations had to shift to remote work, resulting in increased employment opportunities for gig workers and employees working in the BPO sector. Although Covid-19 wreaked massive havoc amid various employment sectors the BPO industry in the Philippines seemed to be functioning quite efficiently in spite of such a bleak market.

Future of BPOs in the Philippines

The pandemic has brought various drastic changes in the way organizations are functioning. The nature of work is turning out to be more demanding and employees need to boost up their skills in order to succeed. Employers are focusing not only on the technical aspect but various other aspects like soft skills before hiring an employee. In case you are working as a freelancer the competition increases massively.

Freelancers are required to ramp up their skills and compete on a global level in order to succeed. The inclusion of automation and artificial intelligence is turning out to be good news as well as bad news for Filipino employees. Although artificial intelligence is automating repetitive work, the inclusion of artificial intelligence is opening up new avenues across IT as well as various technology-related sectors.


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