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As we’ve talked about in previous posts, the BPO industry has really grown over the past decade in the Philippines. In this week’s post we take a more in-depth look at the infrastructure of the Philippines supporting this flourishing industry and some of the future plans to continue its growth.

Government Support

One of the main advantages of BPO in the Philippines is that the government fully supports the outsourcing industry and recognises its significant contribution to the economy. The Philippine government runs a number of training initiatives, such as the Training for Work Scholarship Program that enables the IT industry to provide training for BPO applicants. Investors are also given a number of benefits including: tax holidays; exemptions on imported capital equipment; simplified export and import procedures; and freedom to employ foreign nationals. The collaboration between the government and the private sector for the benefit of the industry is clearly visible. As far back as 2001, the government formed the Information Technology and E-Commerce Council (ITTEC) which is tasked to provide direction on information and communication technology and develop the country as an E-services hub.

Transportation

Modern highways link many of the country’s BPO centres and there is an extensive commuter rail network allowing access between the main hubs. However, according to Deloitte (2014) outside of these main hubs the Philippines still has room to grow in terms of transportation infrastructure. Given the far-flung network of islands that make up the Philippines, the transportation sector is crucial to linking people and economic centres and represents a key growth area.

Telephony and Internet Capabilities

Compared to other countries in the Asian region, the Philippines is considered to have solid power and telecommunication infrastructure and international connectivity including fibre optic cable, satellite communication (NTRC Tax Research Journal, 2012), radiotelephone services and submarine cables (Sitel, 2012). Telephony infrastructure includes fixed line, cellular communication, cable and satellite infrastructure, and fibre optics.

Mobile network services are one of the leading industries in the country, these include: BayanTel, Digitel, Globe Telecommunication, Philippine Long Distance Telecom (PLDT) & SMART Communications Telecommunication (KPMG, 2011).

While progress has been slow, the government has also been promoting Internet connectivity in an effort to encourage investment in the ICT sector and provide a variety of cyber-services at par with global standards. In 2006, President Arroyo announced that the Commission on Information and Communications Technology (CICT) would develop the Philippines Cyberservices Corridor (PCC) stretching 600 miles between Baguio City in Northern Luzon and Zamboanga in Mindanao. However, there are some underlying issues around electricity supply, though plans for future capacity expansion have been announced (KPMG, 2013).

Educational infrastructure and Talent Pool

The availability for human resources is not a problem. Every year the country produces almost half a million college graduates of business and IT related courses – 25% of which are located in the National Capital Region (NCR) while 75% are outside of NCR. The share of talent outside NCR is expected to grow over the next decade. (BPAP, 2015).

Funding the education of students is one of the significant efforts being put in order for Filipino students to start their career in the IT-BPO industry. BPAP is working closely with its partners to find necessary funding resources for the education of these deserving students, while they labour through their studies, with the end-in-view that they will become permanently part of the IT-BPO labour pool.

In 2010, the industry employed 525,000 skilled workers and professionals, up 24% from 2009. The IT-BPO Road Map 2011-2016 projects that the country will grow 25% per year, translating into 1.3 million direct jobs, 3.2 million indirect jobs, and US$25 billion in export revenues.

ICT hubs

To provide clearer direction for the country’s ICT sector, the DOST-ICT came up with the “Next Wave Cities” programme that identifies ICT hubs beyond Manila, based on criteria such as worker supply, telecom infrastructure and other factors necessary to sustain a local BPO industry.

The Philippines became the world’s largest exporter of voice-driven BPO, in 2010 edging out India as the global call centre hub (The Everest Group, 2011). In non-voice BPO, involving back-office services and complex business services, the Philippines is a strong second to India with over 200,000 employees providing global sourcing services to the world.

With the infrastructure always improving and changing the landscape of how BPO is conducted in the Philippines, it is growing into a major industry leader to watch

 

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