Why Is the Philippines Known as the Call Center Capital?

Posted on:
March 31, 2022
dot
10
min read
Author:
Mark Daniel
Abaricio
Table of Contents
1
What are the benefits of outsourcing to developing countries?
2
What are the challenges of outsourcing to developing countries?
3
Top 5 Most In-demand Developing Countries for Outsourcing
4
What are some successful examples of companies that have outsourced to developing countries?
5
What are the best practices for outsourcing to developing countries?
Why Is the Philippines Known as the Call Center Capital?
KDCI Outsourcing
September 6, 2023

In terms of worldwide appeal, the Philippines has come a long way. Not only is the Philippines known for being the world's selfie capital, but it is also regarded as the capital of the world's call center industry. How can a developing country with a small population of 110 million manage to outperform other countries with better contact center infrastructure?

Top Reasons Why the Philippines Remains the Call Center Capital of the World

If you review the history of BPO industry in the Philippines, the country has been the capital of the world's call center industry since 2010. India, the Philippines' arch-rival, has sought but failed to dethrone the Philippines over the years. Despite the expanding number of promising outsourcing hubs worldwide, the Philippines continues to lead the pack. The following are the main reasons why the Philippines dominates the call center industry.

Steady Growth of BPO Companies

PEZA-BPO-statistics

The world has seen how the pandemic affected various industries in recent years—and the Indian IT-BPO industry is no exception.When the pandemic happened, India struggled to serve its large customer bases in the UK and the US. As a result, some foreign companies routed their operations to the Philippines that have pieced together work-from-home solutions and other business-continuity plans.Do you have any idea how many call centers are there in the Philippines? Roughly, there are 788 BPO companies in the Philippines, according to the Philippine Economic Zone Authority (PEZA). Even as the economy struggles to recover from the COVID-19 pandemic, the Philippine BPO industry remains one of the country's most resilient sectors. The sector reached US$26.7B in 2020 and is poised to hit US$29B by 2022.Furthermore, BPO firms employed 1.8 percent more workers in 2020, bringing the total number of direct jobs in the Philippines to 1.32 million. That said, foreign companies have a large pool of professionals to hire. It's just a matter of finding the best people to work for them.

Superior English Proficiency

BPO-filipino-english-proficiency

If you ask companies that hire a call center in the Philippines why they choose to do business there, one common response is that the English standard is excellent!The Philippines is one of the most English-fluent countries globally, making it an excellent place to do business. Since 2016, the Philippines have received a "high proficiency" rating from the Global English Proficiency Ranking. The Philippines came in 18th overall and second in Asia last year.There are two key reasons why English is so deeply ingrained in Filipino culture.First, since American colonization, English has been the primary medium of teaching in Philippine schools. Filipinos are exposed to the language from a young age through education and even the media. Indeed, the English language has given the country an advantage in maintaining its title.Second, the Philippines has a solid affinity for Western culture. The Philippines is likely the only country in Asia closely associated with the West, adopting American food and their preferences in movies, music, and sports. Filipinos' familiarity with Western culture allows them to bridge the cultural gap between them and the rest of the world.Clearly, India has lost a lot of call center seats to the Philippines due to its accent-related woes. American customers dislike the thick accents of Indian call centers and thus, prefer Filipino agents for their neutral accents. While India is still the world's top outsourcing destination, the Philippines is rapidly upstaging India in customer support services—cementing itself as the capital of the world's call center industry.

Robust Support from the Government

philippine-government-call-center

Since its inception in 1992, the Philippines' call center industry has progressed significantly. Thanks to a supportive government that enforces laws and regulations to ensure the Philippines would remain on its title.The Philippine government has formed a partnership between the Technical Education and Skills Development Authority (TESDA) and the IT and Business Process Association of the Philippines (IBPAP) to further its aim of retooling the workforce for IT-BPO jobs.From 2001 to 2010, the government under the Arroyo administration committed Php500, 000.00 to train 100,000 entry-level call center agents. The government allocated $500 million in 2011 to execute the Training for Work Scholarship Program (TWSP). Within six months of completing the course, the program promised to hire at least 70% of the total graduates.Moreover, The Data Privacy Act of 2012 was enacted to strengthen the Philippines' status as one of the world's top outsourcing destinations. With the passage of the Act, all BPO providers are now required to secure personal data, increasing foreign investors' confidence in growing their business operations in the country.The National Cybersecurity Plan and Digital Transformation Strategy for 2022 were also created by the Department of Information and Communications Technology (DICT). With the implementation of this plan, companies will have trust and confidence in the Philippines when using ICT facilities. Simultaneously, it formalizes the administration of cybersecurity governance among investors and businesses in the BPO sector.

Competitive Pricing and Incentives

One of the key reasons why businesses continue to outsource to the Philippines is that the country provides cost-effective services. Hiring a Shopify developer from a Western country, for example, could cost you $100-150 per hour.On the other hand, outsourcing to the Philippines might cost as little as $30-60 per hour. The good news is that the quality is equal to its international counterparts.In addition, outsourcing to the Philippines might save you up to 70% on operational expenditures. You don't have to worry about equipment, utilities, or rent as a client. All you have to do is pay their service costs, and you'll be on your way to having your in-house call center in the Philippines.Furthermore, BPO companies provide enticing compensation to their outsourced workers to keep them motivated. The following benefits are available to BPO workers in the Philippines:

  • Government-mandated benefits (SSS, PAG-IBIG, PhilHealth)
  • 13th Month Pay
  • Night Differential
  • Life Insurance
  • Premium Health Benefits
  • Scholarship programs
  • Paid leaves
  • Monthly allowances

Moreover, foreign companies registered with the Philippine Economic Zone Authority (PEZA) may be eligible for tax breaks lasting four, six, or eight years. Foreign businesses will be subject to a 5% tax on gross income after the expired validity period. These fiscal incentives are one of the reasons why BPO is the fastest-growing industry in the Philippines.

Call Center Outsourcing Philippines: Where to Outsource?

The Philippines houses numerous outsourcing service providers you can work with—and our company is excited to bring results to your business, all while building a long-term partnership.KDCI, a leading offshore staffing service provider based in the Philippines, offers top-notch services ranging from customer support to marketing and design. We've worked in a variety of industries and provided scalable solutions to some of the world's most well-known brands.Our area of expertise is eCommerce outsourcing. So if you're looking for a partner for eCommerce customer service and product information management, you may benefit from our ten years of industry experience working with a variety of clients worldwide.Are you interested to know more about our services? Then, click the button below to get your FREE consultation with one of our client success managers today!Contact Us

Share via:
Build Your
Outsourcing Team
Talk to us about outsourcing needs
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Related Articles
We Provide Amazing Services
Our training and strategic outsourcing services have helped thousands of organizations succeed
Get in touch with us
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Philippine Office
3008 One Corporate Centre, Julia Vargas Avenue, Ortigas Center, Pasig City 1605, Metro Manila, Philippines
USA Office
552 E Carson St. Suite 104, Carson, CA 90745, USA
Contact Sales
Contact Recruitment