Written by Dion Jay Tality
Did you know over 700 business process outsourcing (BPO) firms are in the Philippines? They offer various outsourcing services, from front-office to back-end operations. If you are looking for an offshoring provider in the Philippines, you are in the right place.
This page is a complete guide to the Philippine BPO industry. Read on to learn more about:
- The BPO landscape in the country,
- Common services offered by Philippine BPO firms,
- Key factors for choosing a BPO provider,
- Benefits of Philippine outsourcing, and
- Best practices for outsourcing.
Let us dive right in!
An Overview: Business Process Outsourcing Firms in the Philippines
Business process outsourcing (BPO) entails delegating tasks to third-party service providers instead of performing them in-house. This strategy is a viable solution for reducing costs, prioritizing core functions, and optimizing processes. It gives you access to a talented workforce, advanced technology, and ample resources to scale your operations and grow your business.
When looking for a BPO firm, why not choose the world’s BPO capital? The Philippines earned its title due to its skilled talent, competitive pricing, supportive government, and ideal business environment. Its years of experience have made it one of the leading outsourcing destinations worldwide.
The next section will explore the Philippine outsourcing industry’s past, present, and future and its many BPO firms.
A History of Philippine Outsourcing
We can trace the history of Philippine outsourcing back to the late 1990s when Accenture started the first contact center in the country. Sykes Enterprises and eTelecare Global Solutions later set up the first multinational BPO company and call center. These BPO firms paved the way for the growth of the Philippine outsourcing industry.
Recognizing the BPO industry’s potential, the Philippine government actively supported its development. It soon enacted the Special Economic Zone (SEZ) Act to attract foreign and local investments to create job opportunities and boost the country’s economy. It later established the Philippine Economic Zone Authority (PEZA) to provide investment tax incentives.
Today, the BPO industry has exponentially grown, with over 700 business process outsourcing firms in the Philippines. According to Colliers, it could capture a bigger share of the global BPO market. Learn more about the current state of Philippine outsourcing in the next section.
The Current State of BPO Firms in the Philippines
The Philippine outsourcing industry shows no sign of slowing down. Business process outsourcing firms in the Philippines continue to expand, with new companies gradually gaining ground.
Some key players in the Philippine BPO industry are Accenture, Concentrix, and Wells Fargo. Indian BPO firms, such as Hinduja Global Solutions, Infosys, and Tata Consultancy Services (TCS), also operate in the country. Plus, Unity Communications is an example of an emerging player in the outsourcing scene.
In a recent news report, the Philippine information technology and business process management (IT-BPM) industry had a 10.3% increase in revenue from $29.5 billion in 2021 to $32.5 billion in 2022. The BPO industry is expected to grow to $59 billion by 2028.
The IT and Business Process Association of the Philippines (IBPAP) recognized the IT-BPM industry’s milestones as drivers for its growth. This sector was the biggest job generator in 2021, creating 1.44 million direct and 3.61 million indirect jobs. It was also the largest contributor to the country’s economy, contributing 7.5% to its gross domestic product (GDP).
Lastly, the sector experienced a significant expansion to the provinces (where 30% of the workforce resides) and vertical evolution by fortifying top industries. With all these achievements, it is safe to say that the Philippine BPO sector is thriving and growing.
But what about the future of the Philippine outsourcing industry?
The Future of BPO Firms in the Philippines
The country’s BPO industry continues to adapt and innovate to meet changing client needs and business landscapes. As such, the future of business process outsourcing firms in the Philippines looks bright and promising.
According to the Outsourcing Journal, BPO firms should focus on key imperatives to unlock the industry’s growth potential.
One trend BPO firms can leverage is digital transformation. Companies should consider adopting automation, artificial intelligence (AI), and cloud technology to improve service quality. Another trend is talent upskilling; BPO firms can invest in training programs and development opportunities.
Further, the Philippine government continuously takes steps toward easing business operations and strengthening the country’s IT-BPM ecosystem. These initiatives are encapsulated in the IT-BPM Roadmap 2028. It includes strategies for policy and regulatory support, talent development, infrastructure expansion, and investments.
The Philippines is well-positioned to remain a key player in the global outsourcing market by following through with these initiatives. BPO firms in the country will likewise continue to flourish.
Common Services Philippine BPO Firms Offer
Business process outsourcing firms in the Philippines offer various services across different industries. They cover front-office and back-end operations, including creative and administrative tasks. Whether you are a startup, a small and midsize enterprise (SME), or a big corporation, you can outsource your processes to an offshore provider in the country.
Let us explore the common services BPO firms offer in the Philippines below.
1. Customer-centric Contact Centers
The Philippines is the world’s call center capital. While call centers have long gained ground in the country, they have transitioned into contact centers to keep up with the latest industry trends. They employ contact center as a service (CCaaS) solutions to provide customer support using multiple communication channels. Here are the processes they handle:
- Customer service is at the core of many contact centers in the Philippines. BPO agents are trained to answer customer inquiries, process order requests, handle complaints, and resolve issues professionally and promptly. They assist customers via phone calls, email support, live chat, and social media platforms.
- Sales and telemarketing are part of what contact centers in the Philippines handle. Third-party telemarketers in the Philippines contact customers to offer products or services and perform cold email outreach. These BPO agents also generate leads and contact regular customers.
- Email and chat support have become increasingly popular forms of customer support in the Philippines. Aside from phone calls, BPO agents assist customers via email and live chat. They perform the same tasks as customer service agents but through specific channels.
2. IT and Tech-based Solutions
IT is the most commonly outsourced function globally. As such, business process outsourcing firms in the Philippines offer IT-related services and tech-based solutions to remain competitive. The country ranks second only to India in IT outsourcing (ITO). Below are tasks commonly outsourced to the Philippines:
- IT support is one of the primary services Philippine BPO companies provide. The tasks involve troubleshooting hardware and software, updating and maintaining systems, and managing networks. Other BPO providers offer IT services, such as cybersecurity and regulatory compliance.
- Technical support outsourcing has been a common service in the country since the inception of BPO. This function provides technical assistance to end users of technology products, such as computer devices, software applications, mobile phones, and other electronics. It usually consists of four levels of support, from the first to the fourth tier.
- The help desk is usually established in a BPO firm in the country. This center serves as a single point of contact (SPOC) to address all concerns of end users. This function typically combines technical and customer support via phone calls, email, and live chat.
3. Robust E-commerce Outsourcing Services
The pandemic has further accelerated the rise in popularity of e-commerce outsourcing. Businesses looking to handle a growing customer base, boost their online presence, and reduce expenditures outsource to BPO firms in the Philippines. Here are some e-commerce functions handled by offshore providers in the country:
- Data entry services are among the services BPO companies in the country offer. Offshore teams are responsible for verifying, updating, and maintaining product and customer information in digital formats. Some agents record, store, and secure customer details; others collect and publish product details online.
- Order fulfillment is another critical service provided by BPO companies in the country. This process starts with receiving customer orders and ends with product delivery. BPO agents handle order processing, packaging, and shipping.
- Inventory management is often delegated to reliable BPO service providers in the country. Offshore teams provide real-time monitoring and reporting of inventory levels. This function is critical to e-commerce operations to ensure products are always in stock and readily available for customers.
4. Patient-focused Healthcare BPO Solutions
Aside from e-commerce outsourcing, healthcare BPO has boomed since the pandemic. Clinics, hospitals, and other healthcare organizations outsource non-medical tasks to business process outsourcing firms in the Philippines. They do this to focus on their clinical operations and provide patient care. Below are healthcare services commonly outsourced to the country:
- Medical transcription is a vital service for healthcare providers. This function involves the accurate and timely conversion of patient medical records from audio to text format. BPO companies in the Philippines offer medical transcription services compliant with the Health Insurance Portability and Accountability Act of 1996 (HIPAA).
- Medical billing and coding are critical components of the healthcare industry. These functions entail coding medical services and generating super bills. Some BPO agents use HCPCS, ICD, and CPT codes to code medical diagnoses and procedures. Others calculate and produce medical bills.
- Claims processing is crucial in providing patient care and granting health insurance to members. Offshore teams in the Philippines are responsible for reviewing and adjudicating submitted claims. They work with healthcare providers to make sure insurance companies will pay for patient treatments.
5. Growing Creative Outsourcing Services
Creative outsourcing has rapidly grown in the Philippines. More and more businesses are recognizing the talent of Filipinos. They tap into their skills and expertise to produce creative output while reducing costs. Here are some creative tasks commonly outsourced to the country:
- Content creation is a vital aspect of business and digital marketing. Companies of all sizes hire copywriters, search engine optimization (SEO) content writers, and other content creators for their marketing copy. BPO firms in the Philippines provide these businesses with high-quality content creation services.
- Graphic design is another creative service available at BPO firms in the country. Skilled graphic designers create visual designs that communicate the brand’s message to the target audience. These designs include logos, brochures, banners, and other promotional materials.
- Web design is a growing area of creative outsourcing in the Philippines. BPO firms have a team of expert web designers who design and develop websites. These professionals ensure the sites are visually appealing, highly functional, and mobile-friendly.
6. Efficient Administrative Tasks
Business process outsourcing firms in the Philippines handle administrative functions on behalf of companies. Startups and SMEs usually outsource these tasks so they can focus on their core operations. However, even big companies employ Philippine outsourcing to reduce operating costs. Below is a list of the administrative tasks that BPO companies in the nation handle:
- Accounting and financial (A&F) services are some of the most sought-after admin services BPO companies offer in the Philippines. The tasks include general accounting, bookkeeping, and tax reporting.
- Human resources (HR) outsourcing is another popular admin function handled by BPO firms in the Philippines. The services include recruitment, employee onboarding, performance management, and other HR-related tasks.
- Payroll outsourcing is common in the Philippines. BPO companies handle payroll processing, salary disbursement, and employee benefits management. By outsourcing these tasks to offshore providers, businesses ensure their employees are paid accurately and on time.
Five Real Benefits of Outsourcing to the Philippines
Businesses worldwide constantly look for ways to cut costs and improve operations. Outsourcing is a viable solution for achieving this objective, and the Philippines is a leading destination for offshore outsourcing.
Business process outsourcing firms in the Philippines offer several potential benefits. IBPAP’s official website highlights the country’s advantages as an offshoring destination:
- Robust and diverse talent
- Cost-competitive services
- Expanding infrastructure
- Strong linkages with government, academia, and industry
- Strong voice capabilities, with a growing capacity for IT and non-voice BPO
Let us expound on each of them.
1. Diverse Talent
The Philippines has a diverse pool of highly skilled talent, making it a top nation for businesses looking to outsource. Here are a few reasons you should tap into the country’s highly skilled workforce:
- Highly skilled workforce. The country heavily invests in its people for the outsourcing industry. For one, it focuses on producing graduates in various fields ready to enter the outsourcing realm. The government also supports the BPO industry’s workforce through talent upskilling.
- Strong English language proficiency. The country boasts a high level of English language competency. English is widely used in business and education in the country. In the recent English Proficiency Index (EPI), the country ranked 22nd worldwide and 2nd in East and Southeast Asia.
- Considerable Western cultural compatibility. Due to its colonial past, the Philippines shares cultural traits with Western countries, particularly the United States. This cultural affinity makes it easier for BPO firms to work with their clients, as they have similar cultural norms, work ethics, and business practices.
- Strong work ethic and commitment. Filipinos are notable for their excellent work ethics. They are committed and dedicated to their jobs, primary income source, and livelihood. They work hard to support their families, provide food, and make ends meet.
- Desirable traits and attributes. Aside from strong work ethics, Filipinos are known for their positive attitude. They exhibit hospitality, empathy, patience, and respect, which are vital for customer-facing tasks. They are also focused, diligent, and resilient, capable of handling toxicity in the workplace.
2. Competitive Pricing
Business process outsourcing firms in the Philippines offer competitive pricing. The industry transformed from providing low-cost services to high-quality output with reasonable pricing. Here are a few ways you can save money through Philippine outsourcing:
- Cheaper labor costs. The Philippines has lower labor expenditures compared to other developed countries. Outsourcing to the country can help you cut up to 60% of labor costs. Through this strategy, businesses can save on payroll, recruitment, and training costs.
- Reduced operating expenditures. Outsourcing to the country can also reduce operating expenditures for businesses. The same news report cites that you can reduce operating costs by 40% to 50% through Philippine outsourcing. You no longer need to spend on building infrastructure and investing in technology.
- Lower cost of living. The country’s lower cost of living equates to lower business expenses. You can save on office leases, utility bills, and other related costs. That is why some companies go as far as offshoring or establishing their centers in the country.
3. Expanding Infrastructure
The Philippines has established ecozones and information technology and communication (ICT) hubs. Government agencies and key players in the BPO industry heavily invest in infrastructure expansion. Here is how you can capitalize on its facilities and resources:
- Favorable laws and regulations. The SEZ Act is a perfect example of a Philippine law supporting the BPO industry. The government offers tax incentives and other benefits to businesses operating in ecozones. Other laws and regulations favorable for foreign investments are the Foreign Investments Act and the Omnibus Investments Code.
- More ecozones and ICT hubs. Establishing ecozones and ICT hubs across the country has attracted foreign investment. In the past, BPO firms only operated in three metropolitan cities: Manila, Cebu, and Clark, Pampanga. Recently, the government has been preparing for Digital Cities 2025, primarily to accommodate the BPO sector.
- Ideal business environment. The Philippines has a promising business environment with continued progress and development. The country landed 15th in the 2023 Tholons Global Business Innovation Sustainability Index. Categorized as a “Big Kahuna” nation, the Philippines is one of the “new leaders having built a vibrant foundation.”
4. Industry Linkages
Various stakeholders collaborate for the success of the Philippine outsourcing industry. Business process outsourcing firms in the Philippines get the support of the government, academia, and other industries to help them grow and expand. Here is how industry linkages boost the BPO sector:
- Solid government support. The Philippine government has always been instrumental in the BPO industry’s success. At the onset, it enacted the SEZ Act and later established PEZA. Recently, it launched the IT-BPM Roadmap 2028 to provide strategies for policy and regulation, talent development, infrastructure expansion, and investment acquisition.
- Constant collaboration with the academe. The education sector is vital in producing highly skilled and competent workers for the Philippine BPO industry. Many universities and colleges offer courses and programs aligned with the industry’s needs. They also participate in talent upskilling to ensure a steady supply of skilled workforce.
- Robust participation of major BPO players. Key BPO players consistently participate in government initiatives for the outsourcing industry. They have representatives on IBPAP’s board who work together to create policies and programs for the industry. They also provide support and mentorship to new and emerging BPO firms.
5. Voice and Non-voice Capabilities
The Philippine outsourcing industry offers both voice-related and non-voice services. As the world’s call center capital, the country is known for handling customer-facing tasks. However, business process outsourcing firms in the Philippines also cover IT-related services and back-end operations. Here are some examples of what you can outsource:
- Voice-related services. Outsourcing Journal reported that the Philippines ranked first in voiced-related services, accounting for 13% of the global BPO market. The country is known for its call or contact centers providing quality customer service, sales or telemarketing, and billing and collections services.
- Non-voice service expansion. The same report cited that the Philippines aims to expand its back-office outsourcing capabilities further. Aside from email and chat support, BPO firms in the country recently started handling data entry, medical transcription, content moderation, and social media management.
- IT-based solutions. As ITO comprises the biggest share of the global outsourcing market, the Philippines is considering offering IT services. India and emerging players, such as Ukraine and Poland, hold the largest ITO share. However, the Philippines seeks to provide software development, data management, and other tech-related services.
Key Factors to Consider When Choosing a BPO Provider
Business process outsourcing firms in the Philippines are a dime a dozen. As such, the formula for outsourcing success is not to hire a major BPO player or engage with an emerging one. The key to success is to work with an offshore provider best suited for your business needs, company size, outsourcing budget, and industry or niche.
So whether you employ front-office or back-office outsourcing, consider the following crucial factors when choosing a BPO provider in the Philippines:
- Business reputation. As reputation says everything about a company, you want to work with a BPO partner with a good reputation. Ask for your prospects’ business licenses, certifications, and awards. Likewise, check online reviews, testimonials, and ratings from their previous clients.
- BPO track record. Aside from their reputation, check your prospect’s outsourcing track record. See how successfully they delivered services and met their clients’ service-level agreements (SLAs) and key performance indicators (KPIs). You can ask for their BPO portfolio and review their case studies.
- Industry experience. Choose an offshore provider with experience in your niche. The longer they have been in the industry, the better. However, strike a balance between longevity and quality. Ensure your chosen provider has provided its client with quality services.
- Areas of expertise. Tap into an offshore provider that is an expert in your field. This move ensures your hired provider has the necessary skills and knowledge to deliver quality services. For example, hiring a healthcare BPO provider to handle medical coding and claims processing functions if you run a clinic or hospital.
- Workforce. Business process outsourcing firms in the Philippines are plenty. Choose an offshore provider with a robust team of skilled professionals and experts. Remember, the workers are the most valuable assets in achieving overall business success.
- Technology. Technological advances are a game-changer in today’s business landscape. Select an offshore provider leveraging the latest digital tools and modern technologies to gain a competitive advantage. See if your prospects are utilizing automation, AI, and cloud computing.
- Facility and resources. The goal is to ensure your offshore provider has the necessary infrastructure and equipment to handle your outsourcing project. If your budget allows, opt for a BPO firm with a state-of-the-art facility and world-class resources.
- Privacy and security. Outsourcing means entrusting your business and customer data to a third-party service provider. Your information is at risk if your offshore provider lacks privacy policies and security protocols. Hire a BPO partner with robust security technology and data privacy policies in place.
- Pricing model. Opt for a transparent and flexible pricing structure that best suits your outsourcing budget, whether a fixed price (FP), staffing, or time and materials (T&M) model. Always remember that offshore outsourcing aims to save money in the long run.
- Outsourcing cost. Business process outsourcing firms in the Philippines offer cost-saving benefits. However, that does not mean that you no longer perform due diligence. The last thing you want is to fall prey to hidden outsourcing costs. Hire a BPO partner with competitive pricing!
Best Practices for Outsourcing to the Philippines
Business process outsourcing firms in the Philippines can do wonders for your business, from reducing costs to optimizing operations. But you do not stop working once you have hired the right BPO partner for your business. Whether you outsource tech solutions or customer service, implement the following best practices:
- Study the Philippine BPO market. You must understand the current state of the Philippine BPO market, including the industry trends, labor laws, and government regulations. Gaining these insights will help you make informed outsourcing decisions and implement effective strategies.
- Hire the right BPO provider. Choosing the provider that best fits your business can be instrumental to your outsourcing success. Consider the crucial factors above for selecting the right offshore provider. A reliable and reputable BPO partner can help your business grow and succeed.
- Develop a comprehensive BPO contract. Clients usually create an outsourcing contract with business process outsourcing firms in the Philippines. Ensure your BPO contract is comprehensive, with terms and conditions entirely agreed upon by both parties. Highlight the SLAs.
- Establish constant communication. If possible, conduct regular check-ins and meetings with your offshore provider’s management team. This step ensures you align your expectations with their deliverables, address raised issues, and immediately act on feedback. Remember, communication is key to success!
- Monitor and measure BPO operations. While you set the KPIs for your offshore provider, establish a quality assurance (QA) team. The QA team audits and measures performance. Review their monthly reports to track your outsourcing progress and address areas for improvement.
- Offer training and development programs. These programs can either be for talent reskilling or upskilling, helping your BPO agents enhance their knowledge and hone their skills. Fostering a culture of learning will help increase job satisfaction and create a sense of community between the internal and external teams.
- Invest in the latest tools and technologies. Business process outsourcing firms in the Philippines always keep up with modern technology, such as automation, AI, and cloud. Expect access to the newest tools, such as CCaaS and customer relationships management (CRM) software for customer service.
The Bottom Line
Offshore outsourcing can be a game-changer for businesses looking to reduce costs, prioritize core functions, and optimize operations. Over 700 business process outsourcing firms in the Philippines serve companies of all sizes across different industries.
If you plan to outsource, consider the outsourcing services BPO firms offer in the country. Evaluate your prospects based on the abovementioned factors. Most importantly, select a BPO partner best suited for your business needs, budget, size, and niche.
The work does not end when you hire a BPO firm in the Philippines. Implement some of the best practices for outsourcing listed above. With these in place, you can easily leverage an offshore provider for your business’s growth and success.
If you are looking for a BPO partner in the Philippines, let’s connect! Since 2009, Unity Communications has had a proven track record of outsourcing. We handle front-office and back-end functions, helping businesses of all sizes, whether startups, SMEs, or big companies.