Philippine Outsourcing Going Strong amidst Weak Global Financial Market
Despite pessimism in the global financial market, the Philippines is still set to have a double digit growth at a projected rate of 25.6% , previously at 31.2% by 2010 said XMG Canada. This new estimated growth is even higher than the 22.25% growth forecast for India. Even if 90% of its contracts are coming from United States; the Philippine outsourcing industry continues to be aggressive, targeting a 10 percent share of the US$130 billion global business process outsourcing market and 1.5 million jobs in 2 years.
With the slowdown in the U.S. economy, it is expected that outsourcing destinations like the Philippines will benefit from the job cuts in the financial, insurance and manufacturing sectors, as surviving and merged banks and other thriving businesses would want to continue at lower costs. Edsel Custodio from the Department of Foreign Affairs said that with the country’s strong and liquid financial sector, it can be a source of confidence. Furthermore, Philippines share a language and legal system with the U.S. and offers high skills and low costs which could outrun India according to BusinessWeek. The current government is also putting strong growth drivers in place to promote this industry.
Economists and analysts are startled by the Philippines’ runaway growth in the sector. The pace of development of the BPO [sector] in the Philippines has been impressive, according to Goldman Sachs. Three years ago there was a question mark whether Philippines could develop some [outsourcing] momentum. Now it’s a $3 billion industry.
Philippine Ambassador Edgardo Espiritu said in a London event that the business process outsourcing (BPO) sector is the fastest growing sector of the Philippine economy and that it is now starting to focus even more on the higher-value services sector. Bulk of it are still call centers but contracts for legal services, web design, medical transcription, software development, animation, architectural design and shared services are growing. Investment banks like Deutsche Bank and Citigroup have shared services in the Philippines.
Design work is another place where Filipinos have an edge, according to Sigelman, co-president of India-based OfficeTiger. He says he has found incredible depth of design talent in Manila; the kind of talent that is hard to come by in Bangalore, Hyderabad, or Chennai. Environment Global CEO Zubiri even proudly said that the Philippines has entered the US$100 billion engineering services outsourcing industry working on projects like malls in Europe, towns in Middle East, housing and buildings in Australia and aims to be the hub for design process delivery worldwide.
Oscar Sañez, chief executive of the Business Processing Association of the Philippines (BPA/P) emphasized that the Philippines is focused to meet its 2010 roadmap. The four broad themes are talent, next wave cities, business environment, and the BPA/P team itself. And that the Philippine BPO industry would like to think that it is a part of the solution in this whole issue of slowdown, [that they] are in fact offering the Philippine solution.
Author: Chris V.
Tags: philippine outsourcing
October 12th, 2008 at 3:36 am
[...] Philippine Outsourcing Going Strong amidst Weak Global Financial … By Outsourcing Insider With the slowdown in the US economy, it is expected that outsourcing destinations like the Philippines will benefit from the job cuts in the financial, insurance and manufacturing sectors, as surviving and merged banks and other … Outsourcing Insider - http://www.blog.infinit-o.com [...]
November 1st, 2008 at 3:31 am
The International Monetary Fund and the World Bank has previously endorsed the Philippines as a country whose fiscal and financial institutions remains stable and well-insulated from the volatility of world’s economic situation.
With Philippine banks well-capitalized, its government and Central Bank determined to maintain/improve its status quo and the country’s industries positively geared towards innovations, the Philippines is prime for potential for any acute entrepreneur to make good business despite these trying times.
November 29th, 2008 at 9:57 am
NEW YORK (Dow Jones) — In the most dramatic round of layoffs seen to date in the battered U.S. financial sector, Citigroup Inc. said Monday that it plans to cut about 50,000 jobs, representing 20% of its global workforce, in an
February 23rd, 2009 at 11:30 am
[...] outsourcing industry. The Philippines, for instance, is a trusted outsourcing destination which has 90 percent of its contracts coming from United States. In this setup, troubled businesses which are recipients [...]
May 4th, 2009 at 6:03 am
philippines is indeed becoming a force in the outsourcing market.