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The Filipino Advantage: Top Reasons for Choosing Offshoring in the Philippines

The Philippines offers an offshoring landscape ready for innovation, growth, and excellence. It's a realm where your organization can thrive and redefine industry standards.
Top Reasons for Choosing Offshoring in the Philippines

Table Of Contents

Introduction

The Philippines, often called the “Pearl of the Orient,” is a premier destination for offshoring services worldwide. It ranks 12th as the most attractive country for offshore services according to Kearney’s 2023 Global Services Location Index (GSLI) and houses more than 1,000 BPO companies nationwide with almost 1.2 million employees.

With a rapidly growing talent pool, strong English fluency, and a culture of service excellence, this Southeast Asian nation has become a go-to hub for businesses globally looking to optimize their operations. This guide will detail some of the more strategic advantages of choosing the Philippines as an offshoring destination and why it could be your company’s next best strategic move.

Proficiency in English

One of the standout advantages of offshoring in the Philippines is the country’s high level of English communication skills – a consequence of its historic closeness with the United States. English is one of the official languages of the Philippines, making it a natural choice for businesses looking to partner with an English-speaking workforce remotely. With an impressive 92.5% English proficiency rating, Filipinos easily bridge the communication gap. This capability ensures effective communication and seamless collaboration, minimizing language barriers often arising in offshoring relationships. Moreover, their spoken English is accent-neutral, making it effortless to integrate them into a global team because it is easy to understand and hard to place. This observation is particularly invaluable when it comes to remote accounting and customer support functions where crystal-clear communication is needed.

Vast Talent Pool

The Philippines boasts of a vast and diverse talent pool, particularly in finance, accounting, IT, customer support, and more. Filipinos value education highly – in 2022, a reported 4.1 million students enrolled in colleges and universities in the country. With a steady stream of college graduates (roughly producing 350,000) and skilled professionals entering the job market each year, businesses can tap into a rich source of talent to meet their specific needs.

Cost-Effective Solutions

One of the primary reasons companies turn to offshore is to reduce operational costs while maintaining or improving service quality. The Philippines offers a cost-effective labor market, allowing organizations to access highly skilled professionals at a fraction of the cost compared to many Western countries. It is among the lowest in Asia, with an hourly labor cost (including wages and benefits) for eight service occupations averaging 13% of U.S. levels. This cost advantage significantly contributes to the bottom line.

Service-Oriented Culture

Filipinos are renowned for their hospitality and service-oriented mindset. Filipino hospitality, often called “hospitality with a smile,” is a hallmark of Filipino culture. It is a deeply ingrained value emphasizing warmth, friendliness, and generosity when welcoming guests, strangers, or acquaintances.

Filipino hospitality is deeply rooted in the concept of shared identity or humanity. It reflects the idea that all individuals are interconnected and should be treated with kindness and respect. Whether you’re a guest in a Filipino home or a traveler exploring the Philippines, you will likely experience the warmth and genuine hospitality that define this vibrant culture.
This cultural trait translates seamlessly into offshoring relationships, as Filipino professionals are committed to providing top-notch service and going the extra mile to meet client expectations.

Government Support

The Philippine government actively promotes and supports the offshoring industry through various incentives and initiatives. Fiscal incentives for BPO companies (Business Process Outsourcing) where offshoring falls under, in predetermined ecozones by the Philippine Economic Zone Authority, include an Income Tax Holiday, Special Corporate Income Tax, Enhanced Deductions, and even Importation Incentives. All these tax breaks contribute to the thriving offshoring ecosystem in the country.

Familiarity with Western Culture

The Filipino people have a distinct Asian background with a robust Western tradition. Like the US, the Philippines is a multicultural melting pot – with the latter having an Asian, Hispanic, and American influence. Because of various factors like trade, colonization, and work migration – Filipinos have a deeply ingrained understanding of Western references while retaining their work culture. They can facilitate seamless interaction with clients and customers from Western countries. This cultural alignment extends beyond language to understanding business practices, etiquette, and consumer preferences.

Time Zone Compatibility

The Philippines operates in a time zone that is highly compatible with many Western countries, particularly in North America. Because the Philippines has a 12-14 hour headstart from their US counterparts – the overlap in working hours ensures real-time collaboration and responsiveness, enhancing productivity and efficiency in offshoring partnerships. This often translates as a business advantage as it suggests running a business operation around the clock. In essence, the Philippines’ strategic time zone positioning catalyzes businesses, allowing them to maximize their operational capacity and capitalize on a truly global workforce – a distinct advantage that modern companies should consider.

Technological Advancements

The Philippines has seen significant advancements in digital innovation in recent years. The country’s tech industry has been growing steadily, with startups, tech hubs, and digital entrepreneurs contributing to innovations in various fields such as e-commerce, fintech, mobile app development, and more. Additionally, the government has been taking steps to support and promote the digital economy through initiatives like the “Digital Transformation Strategy.” While challenges exist, the Philippines is making strides in the digital innovation landscape and is considered a promising player in the Southeast Asian tech ecosystem. This commitment to staying at the forefront of technological advancements means businesses can access state-of-the-art facilities, software, and hardware to support their offshoring operations.

Conclusion

The decision to embrace the Filipino advantage in offshoring is a visionary step towards a future of bright possibilities. As businesses continue to evolve in a rapidly changing world, those who seize the opportunities presented by a dynamic global workforce will lead the way. The Philippines offers an offshoring landscape ready for innovation, growth, and excellence. It’s a realm where your organization can thrive and redefine industry standards. As we look ahead, the Filipino advantage becomes a compass guiding us toward new horizons and uncharted territories of success.

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Top Reasons for Choosing Offshoring in the Philippines - FAQs

The Philippines offers many advantages as an offshoring destination, including a strong proficiency in English, a vast talent pool, cost-effective solutions, and a service-oriented culture.
Filipinos have an impressive 92.5% English proficiency rating, making them easily able to bridge the communication gap and ensure effective communication and seamless collaboration.

Yes, the labor cost in the Philippines is very competitive compared to many Western countries, with an hourly labor cost (including wages and benefits) for eight service occupations averaging 13% of U.S. levels.

Yes, the Philippines has a diverse talent pool, particularly in finance, accounting, IT, customer support, and more. There is a steady stream of college graduates and skilled professionals entering the job market each year.
BPO companies receive an Income Tax Holiday, Special Corporate Income Tax, Enhanced Deductions, and Importation Incentives for offshoring operations in predetermined ecozones by the Philippine Economic Zone Authority.
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