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August 26, 2020

BPO Industry Philippines - Best Positioned For A Bounce Back

The business process outsourcing (BPO) industry will remain a major pillar of the Philippine economy even as the nation enters a protracted war against the COVID-19 pandemic.

“While COVID-19 had and continues to have a significant negative impact on outsourcing to the Philippines, there’s no doubt that the industry will bounce back. It might not be the quick, V-shaped recovery that we all hoped for, but the industry is best positioned for a bounce-back in the long-term,” said Ralf Ellspermann, CEO of PITON-Global, a leading mid-sized BPO provider in the Philippines that has helped the country achieve two decades’ worth of expertise in the field of outsourcing.

Some analysts believe the country’s economy is destined for a U-shaped path, or at worst an L-shaped one, which means recovery after a recession will take a much longer time to achieve. But it’s the same story that is set to hound many countries besides the Philippines.

“It can be expected that Fortune 2000 corporations will refrain from moving large number of seats to the Philippines for as long as there’s no cure or FDA-approved vaccine on the market.  Outsourcing executives are very likely not going to put their jobs on the line by moving hundreds of seats offshore. The risk of another lockdown is just too high for as long as COVID-19 is around,” Ellspermann added.

As it is, the government is bent on pursuing a growth track that will, for sure, include BPO as one of the main economic drivers.

“The value proposition of the Philippine BPO industry has not changed. The need for companies to reduce costs and improve operating efficiencies is, of course, also still there. And the best way of achieving these business objectives is by outsourcing core and non-core business processes to the Philippines,” Ellspermann said.

As a leading BPO provider in the country, PITON-Global was witness to how outsourcing companies in the Philippines endured throughout the years and became a top source of employment for many Filipinos.

The Philippines stood out as the best choice, thanks to the proficiency of Filipinos in the English language and the nation’s cultural affinity to the West. It also helped that the country has a 94-percent literacy rate, which is the second highest in Asia.

By the start of the new decade, outsourcing companies in the Philippines were already employing 1.3 million Filipinos. The industry also contributes 7 percent to the country’s gross domestic product, which is roughly US$26 billion in annual revenues.

When the government imposed a lockdown in mid-March, considered one of the stringest in the world, outsourcing companies in the Philippines remained open for business.

The downturn in demand from abroad as operations ground to a halt may have crimped operations of BPOs, but its services also proved vital as customers called in to cancel their planned trips.

The Philippines’ Department of Labor and Employment sees a resurgence of the BPO industry as the global recession forces countries in the West to offshore more jobs in order to cut down on expenses.

Labor cost in the Philippines is much lower by 60 percent compared to the United States, and by 70 percent compared to Australia and United Kingdom.

 “Small and medium enterprises (SMEs) are more likely to move faster and will continue to outsource their BPO requirements as soon as the dust settles. And we are here to support them,” Ellspermann said.

In the long run, BPO companies in the Philippines will continue to flourish as companies all over the world start to pick up the pieces. A recovery will also mean a big heave to an economy burdened by the impact of COVID-19.

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