The Philippines has been the preferred destination for outsourcing business processes for years. The Philippines has been the BPO capital of the world since 2010.
There are many reasons why the Philippines is a preferred BPO destination. Aside from the country’s cultural affinity to the West, it’s also among the top countries with the highest proficiency skills in the English language.
In the European Fellowship’s (EF) English Proficiency Index for 2021, the Philippines ranked 18 amongst 100 countries worldwide.
And the Philippines has an impressive literacy rate of 98.18% as of 2021.
In this article, we’ll touch on the BPO industry today in the Philippines and introduce you to some BPO hot spots in the Philippines that you may not have heard of before.
What is BPO?
Business process outsourcing or BPO refers to ‘a broad range of business outsourcing’ activities. Gartner defines business process outsourcing as:
“Business process outsourcing (BPO) is the delegation of one or more IT-intensive business processes to an external provider that, in turn, owns, administrates and manages the selected processes based on defined and measurable performance metrics.”
Typically BPO involves contracting an external provider to perform a business function or service that was typically performed in-house.
Companies of all sizes outsource many business functions, such as voice services using call centers for customer support, data entry, email response handling, social media marketing, research, and technical support.
But it’s also expanding, offering a wide range of non-voice services. BPO includes legal and medical transcription, software development and animation, human resources (payroll), finance & accounting, statistics, and forecasting services.
The BPO industry in the Philippines continues to stay resilient and grow
Like any other economy, the Philippine outsourcing industry also suffered during the pandemic.
In 2020, the IT and Business Process Association of the Philippines (IBPAP) expected a flat growth for the Philippines BPO industry. But it did grow by 1.4% growth.
Despite the ongoing COVID-19 pandemic, the Philippine IT and Business Process Management (IT-BPM) sector recorded revenues of $26.7 billion in 2020.
And the industry is expected to grow.
The IT-BPM association projects a headcount growth of around 1.43 million full-time employees by 2022 — or a growth rate of 5%. In terms of revenue, they’re forecasting an annual growth rate of 3.2 percent to 5.5 percent for the next two years — which amounts to $29.09 billion in revenue growth annually.
BPO Hot Spots in the Philippines
Here are the top outsourcing destinations in the Philippines accordion to Tholons and Outsource Accelerator, the world’s leading outsourcing marketplace and advisory.
Source: Gurney, S. (2009, September 5). Waterfront view of the Baywalk in Manila [Image]. iStock. https://www.istockphoto.com/photo/waterfront-view-of-the-bay-walk-in-manila-gm92132434-10147866?phrase=manila%20ermita%20buildings
Manila is the capital and chief city of the Philippines. It is the center of the country’s economic, political, social, and cultural activity. It has been the principal city of the Philippines for four centuries and is the primary driver of industrial development.
It’s the country’s top outsourcing destination and is currently ranked by Tholons as the eighth supercity in the world. Tholon’s supercity list is a ranking of countries considered attractive destinations for technology, digital innovation, and business process management.
- Tholons Super Cities ranking: #8 (previously #2)
- Region: National Capital Region
- 2021 Population: 14,158, 573
- Local association: BPO Services Association (BSA/U)
Source: Holgs. (2009, September 7). Cebu Ramos area by day city buildings [Image]. iStock. https://www.istockphoto.com/photo/cebu-ramos-area-by-day-city-buildings-and-houses-with-a-sunset-gm1010520952-272347829
Cebu City is the country’s oldest settlement. It is one of the country’s most historical places and retains much of its Spanish heritage flavor. The city sees over 2 million tourists annually.
Cebu is also a leading outsourcing destination boasting several business centers and multinational companies choosing to settle in the south of Luzon. As a result, it currently holds the 52nd rank in Tholon’s supercities list.
- Tholons Super Cities ranking: #52
- Region: Central Visayas
- 2021 Population: 993,744
- Local association: Cebu IT-BPM Organization (CIB.O)
Source: City Government of Davao. (2020, September 8). Davao City [Image]. Davao City Is Now PH Cacao Capital. https://www.davaocity.gov.ph/agriculture/davao-city-is-now-ph-cacao-capital/
Davao City is the center of trade and commerce in Mindanao, the southernmost island group in the Philippines. Davao City is consistently on the top spot of the Next Wave Cities list of the Department of Information and Communications Technology (DICT) of the Philippines. The NWC list lists city centers that can support extensive BPO and IT companies.
- Region: Davao region
- 2021 Population: 1,866,401
- Local association: BPO Association of Davao
Source: Edwards. (2022, February 6). Santa Rosa, Laguna, Philippines – A covered Atrium, at Ayala Malls Solenad [Image]. iStock. https://www.istockphoto.com/photo/santa-rosa-laguna-philippines-a-covered-atrium-at-ayala-malls-solenad-gm1368915983-438782480?phrase=Santa%20Rosa%20Laguna
Santa Rosa Laguna (Metro Laguna)
Santa Rosa, Laguna, is the second largest city in Metro-Laguna and is located about thirty kilometers from Manila. It has a population of 332, 521 people according to the 2021 census. It is a first-class municipality with jurisdiction over thirty-six barangays.
- Region: CALABARZON
- 2021 Population: 332,521
- Local association: Laguna Information Network and Knowledge in Information Technology (LINK-IT)
Source: Bacolod City Lacson Tourism Strip Photo from SkyscraperCity Bacolod via Facebook from https://www.camella.com.ph/reasons-why-bacolod-is-the-perfect-location-for-investment/
Bacolod City is a city in Negros Occidental long known for its sugar industry. It was also the first capital of the Philippines and the home of the world-famous Bacolod Chicken Inasal.
It is one of the economic hotspots in the Philippines, where the outsourcing industry has been growing for the past few years. It is home to over 100,000 business process employees in various sectors, such as electronics assembly and manufacturing, customer service call centers, and other IT-enabled services.
The city is also the home of Negros First CyberCentre. The cyber park was built to answer the need for setting up an ideal and conducive environment for information and communications technology business process outsourcing investments. Sitting on a four-hectare (40,000 square meters) lot, this 3–story commercial building has spaces to house IT BPO companies and commercial establishments carrying various food, retail, health and wellness, and travel services.
- Region: Western Visayas
- 2021 Population: 624,783
- Local association: Bacolod-Negros Occidental Federation for Information and Communications Technology (BNEFIT)
Source: Watchmen Daily Journal. (2018, June 8). Iloilo Business Park [Image]. Iloilo Business Park Is PH’s “Best Township Development.” https://watchmendailyjournal.com/2018/06/08/iloilo-business-park-phs-best-township-development/
Iloilo City, the capital of the Western Visayas region and one of the fastest-growing cities in the Philippines, is now emerging as a hub for BPO. As per Iloilo City’s website, the city has existed for more than 200 years and is considered one of the most progressive cities in Western Visayas and nationwide.
Iloilo City is also home to the 10th largest seaport in the country and has an international airport that connects it to other major cities worldwide — making the city an ideal trading and outsourcing destination.
- Region: Western Visayas
- 2021 Population: 477,695
- Local association: Iloilo Federation for Information Technology
Source: BRIA Homes. (2022, December). Affordable House and Lot: 5 Facts You Need to Know About Dumaguete City [Image]. https://www.Bria.com.ph/. https://www.bria.com.ph/articles/affordable-house-and-lot-5-facts-you-need-to-know-about-dumaguete-city/
Dumaguete is a university town that shares its name with the province in which it lies. It has an international airport and can be reached by plane from Manila. The city is also a popular tourist destination, with abundant diving and snorkeling opportunities.
- Region: Central Visayas
- 2021 Population: 134,103
- Local association: ICT Association of Dumaguete and Negros Oriental
Source: Newyork, E. (2012, November 20). Baguio City Skyline [Image]. Landscape View of Baguio City, Philippines. https://en.wikipedia.org/wiki/Metro_Baguio#/media/File:Baguio_City_Philippines.jpg
Baguio City is a city in the Cordillera Administrative Region of the northern Philippines and the capital of Benguet province, located about 120 kilometers northeast of Manila. Baguio City is internationally famous for its cool climate and pine-lined streets. It has also been ranked as the world’s cleanest and greenest city.
- Region: Cordillera Administrative Region
- 2021 Population: 378,849
Source: Hovee, N. (2021, November 24). Mt. Arayat and Angeles City / Clark Skyline [Image]. iStock. https://www.istockphoto.com/photo/mt-arayat-and-angeles-city-clark-skyline-gm1354053149-428983282?phrase=clark%20pampanga
Metro Clark is an economic zone in Pampanga province, 70 kilometers from Metro Manila. It has been a regional center of trade and commerce for over three centuries.
Metro Clark is the newest and fastest-growing BPO hub in the Philippines. With an investment of $2 billion from Japan, it has become one of Asia’s most advanced digital cities. It is currently home to more than 1,800 Filipino and international BPOs. Metro Clark has the potential to become a global hub for outsourcing services in Asia with its strategic location, natural resources, and robust infrastructure.
- Region: Central Luzon
- Population: 411,634
- Local association: Metro Clark ICT Council
Source: Skyline of Cagayan de Oro. (2018, October 11). [Image]. https://en.wikipedia.org/wiki/Cagayan_de_Oro
Cagayan De Oro
Cagayan De Oro has been recognized as the Trade Capital of the Northern Mindanao Region. This city is also an important financial, educational, and industrial center in the region, with numerous banks, educational institutions, and industrial parks. In addition, the city offers various BPO destinations for call center operators to set up shop.
Various agencies have recognized Cagayan De Oro as one of Mindanao’s most economically progressive and fastest-growing cities.
- Region: Northern Mindanao
- 2021 Population: 728,402
- Local association: Cagayan de Oro ICT Business Council
For organizations looking to outsource their business processes to the Philippines, there are several outsourcing destinations in the country aside from Metro Manila and Metro Cebu. Emerging BPO hot posts in the country includes Davao City, Cagayan de Oro, Metro Clark, Laguna, Baguio City, Iloilo City, and Dumaguete.
Top 10 outsourcing cities in the Philippines | Outsource Accelerator (2022). Available at: https://www.outsourceaccelerator.com/guide/top-10-outsourcing-cities-in-the-philippines/ (Accessed: 2 September 2022).
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EF EPI 2021 – EF English Proficiency Index (2022). Available at: https://www.ef.com/wwen/epi/ (Accessed: 2 September 2022).
Campos, O. (2020) BPO sector expects recovery with revenue of $29B by 2022, Manila Standard. Available at: https://manilastandard.net/business/it-telecom/340042/bpo-sector-expects-recovery-with-revenue-of-29b-by-2022.html (Accessed: 2 September 2022).
The Philippines falls in Tholons’ Digital Nations list – BusinessWorld Online (2021). Available at: https://www.bworldonline.com/editors-picks/2021/03/08/348747/philippines-falls-in-tholons-digital-nations-list/ (Accessed: 5 September 2022).
The Next Wave Cities | DICT (2022). Available at: https://dict.gov.ph/e-business/the-next-wave-cities/ (Accessed: 5 September 2022).