Business Advantages of Outsourcing in the Philippines

Small businesses, medium-sized companies, and large enterprises continue to experience the advantages of outsourcing. It allows organizations to focus on their core business functions while saving on costs and expenses related to fringe business functions such as back-office operations, customer service, IT, or data entry services.

Outsourcing companies in the Philippines continue to improve their processes and services to ensure that businesses will maximize profit and revenue from this business strategy. As such, the country has maintained its position as one of the best outsourcing destinations in the world.

In fact, Business Process Outsourcing (BPO) remains one of the top drivers of economic growth in the country. The outsourcing sector is expected to play a significant role in driving the Philippines’ economic growth in 2024, with projected contributions reaching 8% of the country’s total economic output.

According to the roadmap of the IT-Business Processing Association of the Philippines (IT-BPAP), the BPO sector’s total revenue will reach $37.87 billion in 2024. To meet rising demand, it is also forecasted to generate 1 million jobs by 2028.

Given the increasingly competitive market of the BPO industry in the country, outsourcing companies are continuously looking for ways to innovate and improve processes. Whether it’s customer service, creative services, or administrative processes, you can be sure that your outsourcing endeavor will be fruitful with these advantages of outsourcing.

9 Advantages of Outsourcing in the Philippines

Outsourcing to the Philippines offers numerous advantages for businesses, including cost savings, access to a skilled workforce, and English proficiency. This guide will explore the benefits of outsourcing and explain why the Philippines is a popular outsourcing destination.

Cost-Effectiveness

Cost is the top reason businesses outsource part of their operations to the Philippines. Labor, for instance, costs only a fraction of what it normally does in Western countries.

The cost of living is low, which trickles down to lower prices of goods and services, including office space rentals, infrastructure, recruitment, taxes, legal services, and more.

In fact, you don’t even need to worry about these costs, as the Outsourcing company will provide them for your offshore team. Outsourcing to the Philippines will allow you to save at least 60% on business costs and expenses.

Business Flexibility

Many businesses have demands, and outsourcing enables companies to meet these demands as they occur. When you outsource to the Philippines, you free up your resources and save on costs for other business needs.

Outsourcing part of your business functions to the Philippines allows your company to expand its operations and reach new markets. When the need arises, you can efficiently scale down while your company is reevaluating business strategies.

Competitive Technology

The Philippines is not far behind when it comes to technological advancements. Both the public and private sectors continuously push their limits to attain the latest available technology in telecommunications, IT infrastructure, data security, internet connectivity, and more.

Hardware, software, and infrastructure available in developed countries are mostly also available in the Philippines. If you need specific technology for your business, just ask your service provider, and they will be happy to accommodate your needs.

Even government regulations are aligned with the increasing demand for data security. In fact, the country’s Data Privacy Act of 2012 is on par with international industry standards.

Large Talent Pool and Highly Skilled Workforce

As of the end of 2023, the number of Filipinos in the workforce was reported at 1.7 million, with a labor force participation rate of 66.0%. That means that there are 6 out of 10 Filipinos who can work for your company.

The Philippine population also has a median age of 25 years old, so you maximize the advantages of outsourcing with access to professionals who have grown up with technology and are adaptable to any work environment.

More importantly, Filipinos value college education. The literacy rate in the Philippines was 97% in 2023. In fact, the country churns out an average of 500,000 college graduates every year. In 2023, the number even hit over a million.

Because the government recognizes the significant contribution of the BPO industry to the country’s GDP, even the Department of Education has implemented strategies to produce more graduates who are specifically trained and skilled in BPO jobs such as customer service, data entry services, IT, and more. 

English Proficiency

One of the best things about outsourcing is that your offshore team in the Philippines is highly proficient and fluent in English.

English is the formal business language and the official language of instruction. The Philippines has the 2nd highest English proficiency score in Asia. Out of 113 countries around the world, the country ranks 20th in terms of English proficiency. 

Tax Benefits

Government agencies such as the Board of Investments (BOI), Philippine Economic Zone Authority (PEZA), and other sectors are encouraging foreign investors to offshore their business functions in the country.

To make the country more attractive to foreign investors, these sectors have passed tax incentives and exemptions for foreign investors. These incentives include tax deductions, income tax holidays, exemption from import duties, permanent resident status for investors, and more. 

Reduced Legal Liability

This is one of the top advantages of outsourcing. When you partner up with a service provider in the Philippines, you’re transferring legal liabilities to them. The outsourcing company is legally responsible for the company and its employees in the Philippines instead of yours. 

Sharpened Focus on Core Business Function

Outsourcing to the Philippines will allow you to focus on developing and growing your business instead of worrying about countless administrative tasks, data processing services, and customer service or support.

It increases your profit and revenue phenomenally rather than dealing with issues in the office or operational problems that don’t contribute to your overall goals and objectives.

Better Work-Life Balance for Employees

Work-life balance is crucial to the mental health and well-being of your employees. When your key employees are stressed or overworked, they become less productive, and their quality of work declines, which is detrimental to your company’s success.

When you outsource business operations to the Philippines, your outsourcing provider will make sure that your key team members and stakeholders only need to focus on their core responsibilities. This will afford them the luxury of time and allow them to have a better work-life balance.

Maximize Your Potential with Philippine Outsourcing

The Philippines offers numerous advantages of outsourcing to businesses seeking to expand their operations, reduce costs, and enhance efficiency. With its abundant talent pool, competitive pricing, and favorable business environment, the Philippines has become a prime destination for outsourcing services.

By partnering with a reliable outsourcing provider in the Philippines, you can gain access to highly skilled professionals who are proficient in English and possess a strong work ethic. This allows you to offload non-core business functions, freeing up your in-house teams to focus on strategic initiatives and core competencies.

To maximize the benefits of outsourcing in the Philippines, it’s essential to choose a reputable and experienced outsourcing provider. Look for a company with a proven track record, a strong understanding of your industry, and a commitment to delivering exceptional results.

Contact us today to explore how our Philippine outsourcing services can help you achieve your business goals.