Business Consulting BlogThe Philippines: One of the Prime Outsourcing Destinations in the World

January 12, 2015

The Philippines may be less than one tenth the sizes compared to China or India, but it is considered as one of the ten (10) largest outsourcing countries in the world. The highly skilled labor pool in the country is one of the many reasons why foreign locators choose to expand their operations in the Philippines. Language and literacy are also the other vital factors which made the Philippines one of the prime outsourcing destinations. The country is the third largest English speaking population in the world and has one of the highest literacy rates in the region.

In the recent 2014 AT Kearney Global Services Location Index survey, the Philippines ranks 7th among 51 countries as prime BPO location. The annual Global Services Location Index (formerly called the Offshore Location Attractiveness Index) is a tool to help companies understand and compare the factors that make countries attractive as potential locations for offshore services. It measures the viability of countries as an offshore destination based on their financial attractiveness, people skills and availability, and business environment.

While Business Process Outsourcing (BPO) industry continuously drives other sectors, more non-BPO operations are beginning to locate in the Philippines, citing competitive costs. As shown by vacancy rates for office space in the country, supply is tight and demand continues to grow.

According to CBRE Philippines, Makati City, remains the most attractive site for global firms with a vacancy rate of 1.35% and an average lease rate at P970 ($21.77) per sqm, per month. Its lease rates are at $29 per square foot per annum, one of the most competitive among 19 central business districts in the region. Makati is followed by Fort Boniacio and Ortigas with vacancy rates at 3.78% and 8.75%, and lease rates at P797.12 ($17.89) and P572.87 ($12.87) per sqm per month, respectively.

India, the country’s main competitor under BPO industry, charges $31 to $118 per square foot per year, depending on the city while Hong Kong charges 5 times the Philippines’ rate, at $221 per square foot per year.

Choosing the best outsourcing location for your operations is a very crucial decision to make knowing that the global services market is a highly dynamic environment. Your choice will definitely have a significant long-term impact for your company.

With the help of a professional consulting firm like Triple i, rest assured that you will be guided in the right decision. To  develop a market strategy that will smooth your penetration in this market, do not hesitate to contact us. With +200 companies registered in the Philippines, we advise clients in the private, public, and not-for-profit sectors. 

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