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Philippines seeks to become back office superpower by 2010

Philippines seeks to become back office superpower by 2010
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First Published: Wed, Feb 27 2008. 11 02 AM IST
Updated: Wed, Feb 27 2008. 11 02 AM IST
Manila: The Philippines aims to make the most of the economic slowdown in the US by capturing at least 10% of the world’s back office work within the next two years, industry leaders say.
They say the problems in the US and the possibility of recession could be a bonus as more companies based there attempt to save money by outsourcing their operations to the Philippines.
Call centres and back-office operations, such as accounting and financial processes, medical and legal transcription, engineering services and software writing, is one of the fastest growing businesses in the Philippines.
The Business Process Association of the Philippines (BPAP) expects the sector to be posting revenues of $13 billion and employ more than one million people by 2010.
Last year the industry posted revenues of $4.875 billion, up nearly 50% from the previous year, while employment rose 27% to 300,000.
BPAP president Oscar Sanez told AFP the 2010 target was feasible saying the industry has been growing by more than 40% annually in the past three years.
“If there is a recession in the US, you will see companies trying to cut costs with more outsourcing,” Trade and Industry Secretary Peter Favila told AFP.
Julian Ramos Garcia, president of E Scribir Inc., a provider of various outsourcing services said that “with a recession looming in the US, we are getting a lot more calls because people want to cut their costs.”
“We are seeing the tip of the iceberg. There are many more services which are being outsourced to the Philippines,” said BPAP’s Sanez.
Francis Ong, managing director of software giant Oracle, says his company has been in the Philippines for 18 years and now has its tax and global utilities unit based in this country.
While the Philippines does not pretend to be a serious challenger to outsourcing world leader India, it still sees room to grow due to its English-speaking and educated workforce.
In the Philippines, about half of the outsourcing industry consists of call centres, where agents mainly make and receive telephone calls, but the country is rapidly moving up to more complex services such as medical transcriptions and engineering services.
The engineering services sector grew 124% to post $152 million in revenues last year while the software writing sector grew 56% to $423 million, the BPAP said.
Gabby Dizon, president of the newly formed Game Developers Association of the Philippines, says his sector of the industry may be young, “but it’s growing really fast.”
“A lot of companies have growth of 100% per year,” says Dizon.
One of the biggest problems facing the sector is the growing shortage of qualified people.
Although thousands of Filipinos are applying for outsourcing jobs in Manila, managers say less than four out of a hundred have the minimum standards needed to work in the sector.
One solution has been to expand the industry outside the saturated capital to areas where costs are lower and labour is more plentiful.
Ray Anthony Roxas Chua, head of the government’s Commission on Information and Communications Technology, said they have already identified 15 “next wave cities” for expansion ranging from Dumaguete in the central Philippines to Cagayan de Oro in the south.
All these areas have a wide talent pool of college and high school graduates and professionals, he adds.
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First Published: Wed, Feb 27 2008. 11 02 AM IST