Why the Philippines is a top global outsourcing destination

Why the Philippines is a top global outsourcing destination
Gary Culverhouse
Gary Culverhouse
    7 minute read

In 2021, Tholons, a trusted leading strategic advisory firm for global outsourcing and investments, released their 2021 Global Innovation Index. The report benchmarks the Top 100 Super Cities and Top 50 Digital Nations that have “accelerated digital transformation of industries and services globally.” The key indexes Tholons used to compare cities and nations included:

  • Digital innovation
  • Re-imagining of consumer experience
  • Transcendental knowledge 
  • Future readiness
  • Digital competitiveness 
  • Diversity 
  • Inclusion.

In this blog, we will discuss where the Philippines ranked against other nations to highlight its popularity as one of the top outsourcing locations in the world.

Digital nations and super cities

Tholons report starts off by comparing the Top 50 Digital Nations: the top 20 were as follows:

Top 50 Digital Nation

In their Top 100 Super Cities, Manila and Cebu City was recognised. The main reasons The Philippines and its corresponding cities were included came down to these measured strengths:

Diversity and inclusivity

A positive result of diversity and inclusivity pertaining to gender equality, pay gaps and women in leadership.

Innovation and digital

The innovative and digitally-focused nature of the country, including the use of social media, mobile technology, and cloud and artificial intelligence to cater to the economic changes in demand. Parameters that were met by the Philippines include a healthy amount of innovative ecosystems, policies, incentives, cyber security and digital competitiveness and literacy rate.

Risk and quality of life

The Philippines and its corresponding cities ranked low in terms of socio-political risks that affect the quality of life of its citizens. This comes down to the identification of social infrastructure, the culture outside of work environments and how available leisure and recreational facilities are to Filipinos. The low score also considered factors such as economic, political, natural, social and cyber risks.

Cost and infrastructure

The Philippines received a low score here which is actually a positive. It means that it is recognised as a low-cost economy for outsourcing without the risk of poor quality as a result. In this consideration, outsourcing industry salary costs and real estate costs were key factors, including bandwidth and the availability of infrastructure pertinent to hosting outsourcing operations. Everything from the amount of office space, the number of special, designated economic hotspots, transport systems, number of education systems, institutes and hospitals ensured a positive result for the Philippines.

Why outsource to the Philippines?

In addition to the report, there are many other reasons for outsourcing to the Philippines, including:

  • Being located in the heart of Southeast Asia. This makes it the perfect base of operations for foreign companies targeting the large Southeast Asian markets with their products or services
  • The tremendous progress in terms of the quality and reliability of its infrastructure. Businesses can operate effectively and expats can enjoy a very high quality of life in Manila, Clark, Cebu and other cities
  • Excellent universities and a very young population. This means that hundreds of thousands of highly motivated students graduate yearly with college degrees on par with international education standards
  • Economic stability with government policies that support socio-economic progress, counter corruption and bureaucracy
  • The legal, financial, and government systems of the Philippines are based on those of the United States. This means that most professionals are accustomed to Western ways of doing business. It also makes it easy for Western companies to work with Filipino accountants, lawyers and other professionals.

Commonly outsourced roles

The following are examples of roles that are outsourced frequently with great success to the Philippines:

  • General
  • Customer support
    • Chat management: manage the live chat functions on your website or other social messaging platforms
    • Customer service representatives: interact with customers to handle queries, complaints and process order requests while providing information on products and services of an organisation
    • Inbound and sales support: provide administrative support to outbound and inbound sales representatives who contact potential prospects and existing customers to sell new or existing products and services.
  • Digital marketing
    • Digital marketing specialists: plan and develop marketing campaigns through online, digitised content focusing on techniques that boost engagement and brand visibility
    • SEO and SEM specialists: review and edit websites to achieve higher search engine rankings
    • Social media specialists: monitor and create content to ensure an organisation has a notable presence across relevant social media platforms.
  • Finance
    • Bookkeepers: document accurate records of financial transactions and assist in the production of financial statements for an organisation
    • Accountants: analyse and report in preparation of financial statements and tax returns for an organisation
    • Financial analysts: examine and interpret the financial data of an organisation
    • Procurement officers: research products and services from existing and potential suppliers on behalf of internal business units
    • Tax advisors: provide organisations with expert financial advice and guidance regarding tax accounting and tax law.
  • Human resources
    • HR specialists: responsible for the entire lifecycle of managing employees from job advertisements and onboarding through to management, administration and termination
    • Talent acquisition specialists: source candidates using various channels, plan interviews with hiring managers and coordinate selection procedures and criteria.
  • Web development
  • Technical support

Want to learn more about outsourcing to the Philippines?

There are many misconceptions about outsourcing to the Philippines. These common myths usually stem from a lack of understanding about how the outsourcing industry actually works. The following eBook will debunk these myths and explore the benefits of outsourcing.

This blog was last updated on 18 May 2022.

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