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PHILIPPINE
OUTSOURCING
PRIMER
Q1 2012
Philippine Outsourcing Industry Primer
SNAPSHOT OF THE
PHILIPPINES
The Philippines is an archipelago of 7,100
islands south of China in Southeast Asia. It
became the first republic in Asia when it was
ceded by Spain to the US (1898), the first to
be decolonized partially by a Western colonial
country (1935), and the first in Southeast Asia
to be granted full independence after the
Second World War following the Japanese
occupation (1946). Because of its strategic
location it has been a bridge between the East
and West, a rampart of Christianity, and a
showcase of democracy in Asia. The 21-year
rule of Ferdinand Marcos ended in 1986
when a widespread popular rebellion forced
him into exile. In 1992, the US closed its last
military base on the islands. The Philippines
has had five electoral presidential transitions
since the removal of Marcos. Benigno Aquino
III was elected to a six-year term as president
in 2010. The Philippine Government faces
threats from three terrorist groups. Decades of
Muslim insurgency in the southern Philippines
have led to a peace accord with one group
and on-again/off-again peace talks with
another.
GEOGRAPHY
Location
Southeastern Asia, archipelago between the
Philippine Sea and the South China Sea, east
of Vietnam.
Total Land Area
Slightly larger than the US state of Arizona,
the Philippines is an archipelago of 7,100
islands covering approximately 300,000
square kilometers composed of land area of
298,170 square kilometers and 1,830 square
kilometers of water.
Main Islands
Luzon, Visayas & Mindanao are the three
main island groups.
Climate
Tropical temperatures ranging from 23-32
°C. Two distinct seasons: Wet (June to
October) & Dry (November to May).
Time Zone
GMT +8 Hours
Average Flying Hours to Selected Locations
New York
San Francisco
Los Angeles
London
Paris
Sydney
Tokyo
Hong Kong
Seoul
Singapore
Bangkok
Jakarta
Kuala Lumpur
Shanghai
17:30
11:50
12:00
14:00
16:40
7:40
3:35
1:20
4:00
3:00
3:00
4:25
3:30
2:20
PEOPLE
Population
93.62 Million (2011)
88.6 Million (2007 Census)
Population Growth Rate
1.4% (2011)
Age Structure (2011 estimate)
0-14 years: 34.6%
15-64 years: 61.1%
65 years and over: 4.3%
Population Density
321 persons/sq. km (2011)
Labor Force Participation
64.3% (January 2012)
Unemployment Rate
7.2% (January 2012)
GOVERNMENT
Country Name
Republic of the Philippines
Capital
Metro Manila
Political System
The 1987 Constitution provides for a
presidential system of government with a
bicameral parliament and three (3) equal
branches: executive, legislative and judiciary.
Administrative Divisions
81 provinces and 118 chartered cities
© 2012 CB Richard Ellis • BPO-CALL CENTER SOLUTIONS GROUP
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Philippine Outsourcing Industry Primer
ECONOMY
The International Monetary Fund (IMF)
estimated the Philippines' GDP at US$216
billion in 2011. The Philippine economy is the
fifth-largest in ASEAN (after Indonesia,
Thailand, Malaysia, and Singapore). It
rebounded from the global financial crisis in
2010 and grew by 7.6 per cent, before
growth halved to 3.7 per cent in 2011.
Government
underspending
and
a
contraction in exports, including because of
weak demand for electronics in the EU, Japan
and the US, contributed to the slowdown. The
World Bank and IMF estimate the Philippine
economy will grow by 4.2 per cent in 2012,
on the back of an improvement in exports,
acceleration in private investment, and a full
recovery in government spending.
DOING BUSINESS IN THE
PHILIPPINES
PARTICIPATION IN PHILIPPINE
BUSINESS CORPORATIONS
There are 3 basic forms of business
organizations in the Philippines: sole
proprietorship, partnership and corporation.
Of these, the corporation is generally the
most appropriate vehicle for investments in
the Philippines.
Subject to nationality requirements pertaining
to the intended activity, Philippine law allows
foreign investors to establish and register a
joint venture corporation, a subsidiary, a
branch office, and/or a representative office.
The macro-economic fundamentals for the
Philippine economy remain strong. Inflation
and interest rates are low and the currency is
stable. Overseas Filipinos' remittance income,
which accounts for more than 10 per cent of
the Philippine economy, remains remarkably
resilient and continues to support domestic
consumption. Business Process Outsourcing,
an increasingly important driver of the
economy, has grown tremendously in recent
years. The Philippines now rates behind only
India in a sector that has diversified beyond
call centres.
Corporation: Under Philippine law, 5 or more
persons (but not exceeding 15) may
incorporate a domestic corporation for any
lawful purpose.
A majority of these
incorporators must be Philippine residents.
The board of directors may be composed of
not less than 5 but not more than 15
members. A majority of the members of the
board of directors must be Philippine
residents. Each director must own at least 1
share of the capital stock of the corporation in
his own name.
The Government has shown a commitment to
economic reform which has the potential to
open up areas for economic cooperation in
both trade and investment.
A corporation must have a president who is a
director of the corporation. It must also have
a treasurer and a secretary. The secretary
must be a resident and a citizen of the
Philippines. As a matter of policy, the
Securities and Exchange Commission (SEC)
requires the treasurer to be a resident of the
Philippines.
Currency Unit
Philippine Peso (PHP)
Currency Exchange Rate
US$1=PhP42.69 (April 2012)
Business Hours
Typically from 8:30 AM to 5:30 PM (Private &
Gov’t Offices), 9:00 AM to 3:00 PM (Banks)
GNP growth rate
5.8% (1Q 2012)
GDP growth rate
6.4% (1Q 2012)
Inflation
2.6% (March 2012)
A foreign corporation may establish a
Philippine subsidiary that has a legal
personality separate and distinct from its
parent company. The requirements to register
a domestic corporation apply to a subsidiary.
Branch: A branch is an extension of a foreign
enterprise and has no separate and
independent legal personality. It can carry out
the business activities of the head office and
may derive income from the Philippines.
Representative Office: A representative office
deals directly with the clients of its parent
company within the Philippines. However, it
© 2012 CB Richard Ellis • BPO-CALL CENTER SOLUTIONS GROUP
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Philippine Outsourcing Industry Primer
may not derive income from the Philippines. It
is fully subsidized by its head office. It
undertakes activities such as, but not limited
to, information dissemination and promotion
of the company’s products as well as quality
control.
Enterprises Registered with the Philippine
Economic Zone Authority (PEZA)
The Philippine government has established
several special economic zones (Ecozones)
where call center/BPOs may establish their
businesses and register with the PEZA as an
Ecozone IT Enterprise.
An IT Enterprise is a company engaged in any
of the following activities:
 software development and application,
including programming and adaptation of
system softwares and middlewares, for
business, media, e-commerce, education,
entertainment, etc.;
 IT-enabled services, encompassing call
center/BPOs, data encoding, transcribing
and processing; directories; etc.;
 content development for multimedia or
internet purposes;
 knowledge-based and computer-enabled
support services, including engineering
and
architectural
design
services,
consultancies, etc.;
 business process outsourcing using ecommerce;
 IT research and development; and
 Other IT related service activities.
Tax and other Incentives
As a general rule, the Ecozone Enterprise is
still entitled to the income tax holiday which
may be for a duration of:
 4 years for Non-Pioneer IT Enterprises; or
 6 years for Pioneer IT Enterprises.
The PEZA guidelines do not define Pioneer or
Non-Pioneer Enterprises. In practice, PEZA
only considers activities involving “new
technology” or “technology untried in the
Philippines” as the standard for determining
Pioneer Enterprise status.
Thus, call
center/BPOs currently registered under PEZA
are considered Non-Pioneer Enterprises.
Upon the expiry of the income tax holiday, the
Ecozone Enterprise is subject to a preferential
rate of 5% of gross income. This is in lieu of
all national and local taxes.
Because an IT Enterprise is also considered an
Export Enterprise, it is further entitled to the
following incentives:
 zero-rate Value-Added Tax on export
sales;
 exemption from duties and taxes on
importation
of
merchandise,
raw
materials, supplies of equipment and
machineries, including importation of
capital equipment, construction materials,
specialized office equipment and furniture,
specialized
vehicles
and
other
transportation equipment, professional
instruments and household effects;
 tax credit for import substitution;
 exemption from wharfage dues, export tax,
import or fee;
 additional deduction for training expenses;
 tax credit on domestic capital equipment,
breeding stocks and genetic materials;
 additional deduction for labor expense;
 unrestricted use of consigned equipment;
and
 employment of foreign nationals in
executive, supervisory, technical and
advisory positions, provided, the total
number of foreign nationals employed by
an Ecozone Enterprise shall not at any time
exceed 5% of its work force.
Post Registration Requirements
Briefly, after a company registers with the
SEC, it must comply with the following postregistration requirements before it can
commence operations:
Securities and Exchange Commission (SEC)
The company must register its stock and
transfer book with the SEC.
Bureau of Internal Revenue (BIR)
The company must register with and obtain a
Tax Identification Number from the BIR.
Depending on the activity it is engaged in, it
may have to register as a Value Added
Taxpayer.
The books of account of the
company (a ledger and a journal and other
subsidiary books as may be required, as well
as its invoices and official receipts) must be
registered with the BIR.
Social Security System (SSS)
An employer in the Philippines must register
with the SSS. Employees’ and employers’
contributions, by way of premiums, should be
remitted to the SSS to fund security and state
insurance benefits.
© 2012 CB Richard Ellis • BPO-CALL CENTER SOLUTIONS GROUP
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Philippine Outsourcing Industry Primer
Philippine Health Insurance Corporation
(Philhealth)
All private sector employees are required to
register with Philhealth.
Employers’ and
employees’ contributions, by way of
premiums, should be remitted to Philhealth to
fund the National Health Insurance Program.
Home Development Mutual Fund (HDMF)
The HDMF is a housing fund established by
the Philippine government. An employer in
the Philippines must register with the HDMF.
Employees with salaries of at least Php4,000
and their employers should remit their
contributions to the HDMF.
Bureau of Trade Regulation and Consumer
Protection (BTRCP)
The company should register its business
name or style with the BTRCP to enable it to
advertise or otherwise publicize its presence in
the Philippines.
Municipal Permit
The company is required to obtain a permit
from the municipality or city where its office is
located.
Philippine Board of Investments
The Omnibus Investments Code provides a
host of incentives, fiscal and non-fiscal, to
preferred areas of investments. Systematic
procedures are set in to help local or foreign
companies or business projects to register
easily.
Registered projects are granted a host of
incentives such as:
 income tax holidays;
 tax credits;
 tax and duty exemption for imported raw
materials and equipment;
 hiring of foreign labor;
 exemption from contractors tax;
 simplified customs procedure; and
 other tax incentives depending on their
category.
Basic Employment Conditions
Hours of Work: Eight (8) hours per day or 40
hours per week.
Rest periods of short
duration during work hours shall be counted
as hours worked
Work Day: A day is the 24-hour period which
commences from the time the employee
regularly starts work.
Daily Minimum Wage:
Metro Manila
PhP426.00 (US$9.98)
Other areas:
Baguio City: PhP272.00 (US$6.37)
Pangasinan: PhP248.00 (US$5.81)
Dumaguete and Cebu province: PhP260.00
to PhP305.00 (US$6.09 – US$7.14)
Laguna, Batangas, Cavite: PhP255.00 to
PhP350.00 (US$5.97 – US$8.20)
Iloilo and Bacolod: PhP265.00 (US$6.21)
Cagayan de Oro City: PhP271.00 to
PhP286.00 (US$6.35 – US$6.70)
Davao City: PhP286.00 (US$6.70)
*(US$1 = PHP42.69 as of April2012)
Overtime Remuneration: Overtime premium
is allotted for work exceeding the maximum
prescribed period. The rates per hour for
overtime work vary but the standard overtime
rate for a regular day is 125% of the
rate/hour.
Night-Shift Differential Pay: Night-shift
employees must be paid a differential of not
less than 10% of the regular wage for each
hour of work performed between 10:00 PM
and 6:00 AM
Service Incentive Leave: Every employee who
has rendered at least one year of service is
entitled to a yearly service incentive leave of
five (5) days with pay
Meal and Rest periods: One-hour
for regular meals
time-off
Mandatory Employment Contribution
MANPOWER RESOURCES
13th Month Pay: By law, companies are
required to give its employees a 13th pay
equivalent to one (1) month salary
The Labor Code of the Philippines contains
the laws on employment relations and labor
standards.
Some of the important
employment conditions
and employee
benefits are as follows:
Social Security System: As mandated by law,
both employer and employees are to
contribute for social security benefits of the
employees based on
the scale of
compensation
© 2012 CB Richard Ellis • BPO-CALL CENTER SOLUTIONS GROUP
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Philippine Outsourcing Industry Primer
National Health Insurance Program: As
mandated by R.A. 7835 on Medicare
Program which is administered by the
Philippine Health Insurance Corporation, both
employers and employees are to contribute
for medical insurance/benefits of the
employees
Home Development and Mutual Fund:
Companies/employers are also required to
contribute at least PHP100 per month to
HDMF
for
employee
benefits.
Companies/employers remit this contribution
plus that of the employees’ which will be
deducted from their payroll, in accordance
with the remittance schedule provided by the
HDMF.
Attrition Rates
Non-Captive Centers: 35-40%
Captive Centers: 25-30%
Employee Wages
Telephone System:
General assessment: good international
radiotelephone and submarine cable services;
domestic and inter-island service adequate
Domestic: domestic satellite system with 11
earth stations
International: 11 international gateways;
satellite earth stations - 3 Intelsat (1 Indian
Ocean and 2 Pacific Ocean); submarine
cables to Hong Kong, Guam, Singapore,
Taiwan, and Japan
Telephone & Mobile Service Providers:
 PLDT and Smart
 Digitel and Sun Cellular
 Globe Telecom
 Eastern Telecoms
 Bayantel
Internet Users:
Approximately 29.7 Million (2010)
1- Customer Service Representative (with or
without experience in the call center industry) P13,000-16,000 (basic) plus night differential
(differs depending on company), benefits,
food/transpo allowance, etc
Monthly Cost of Bandwidth: US$ 2,000 to
4,000
2- Team Leaders- P25,000-35,000 (basic)
Service Provider: The Metro Manila Electric
Company or MERALCO serves as the major
provider of electricity in Metro Manila.
3- Operations Managers - P50,000-80,000
(basic)
4- Trainers - P20,000-35,000 (basic)
5- Training Manager - P35,000-50,000
(basic)
6- HR Director, CFO and other Director level
positions- P180,000-P250,000
(basic)
7- Managing Director, GM level Php400,000 (minimum)
TELECOMMUNICATIONS
Telephone Land Lines Subscribers:
Approximately 6.7 Million (2010)
Mobile Phone Subscribers:
Approximately 79.9 Million (2010)
UTILITIES
Electricity
Industrial
Customers
based
on
typical
consumption levels
Small Industries
4,000 to 12,000 kwh
Basic
Charge
(in US$)
US$0.07
to
0.10 per kwh
Medium Industries
20,000 to 60,000 kwh
Large Industries*
60,000 to 180,000
Very Large Industries*
400,000 to 1.2 million
kwh
Extra Large Industries*
2 million to 6 million kwh
© 2012 CB Richard Ellis • BPO-CALL CENTER SOLUTIONS GROUP
US$0.09
to
0.11 per kwh
US$0.09
to
0.11 per kwh
US$0.09
to
0.12 per kwh
US$0.09
to
0.12 per kwh
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Philippine Outsourcing Industry Primer
*Note: Very Large Industries are customers
with demand of 2MW but less than 10MW,
and Extra Large customers with demand of
10MW and up.
Water
Service Providers:
Maynilad Water Services – serves the western
part of Quezon City, Caloocan, Malabon,
Navotas, Manila and western part of Makati
and Pasay
Manila Water Company – serves the eastern
part of Makati, Pasig, Taguig, Pateros,
Muntinlupa, Las Pinas, Paranaque, eastern
part of Quezon City, Markina, Mandaluyong,
San Juan and Valenzuela
Residential Rates (in US$) – December 2006
First 10 cubic meter
Residential-$0.60
In excess of 10 cubic
meter
Residential-$0.25
to 0.26 per cubic
meter
Industrial & Commercial Rates (in PhP)
First 1000 cubic meter
PhP6 to 16
In excess of 1000 cubic PhP8.50 to 18
meter
per cubic meter
TRANSPORTATION
Mode of Transportation
The public sector takes the bus, taxis and
“jeepneys” which ply major routes in Metro
Manila.
Light Rail Transit / Mass Rail Transit
This is the most efficient way of going around
Metro Manila. The LRT runs along Manila
North to South. The MRT runs along EDSA.
For a cheap price you can get a ride and get
off in one of the many stations. Trains depart
on 15-minute intervals on ordinary hours and
5-minute intervals on rush hours.
Basic Transportation Fare
Jeepney: P8.00 first 5 kilometers (increment
of P0.50 per additional kilometer)
Taxi fare: P40.00 flag down rate (increment
of P3.50 per additional 300 meters)
LRT: P12.00 – P15.00 (increment of P1.00 per
4 stations)
MRT: P10.00 – P15.00 (increment of P0.50
per station)
Major Roads
EDSA Avenue - While not technically a
highway, this major road stretches across
Metro Manila passing through several cities
and municipalities. Major traffic is expected
any time of the day.
Rizal Avenue - 2 lane road dominated by the
Light Rail Transit system (Elevated train) and
the jeepneys (Public transport). It stretches
along Manila starting from the North
(Caloocan City) and ending at the central
commercial district before the Pasig River.
MacArthur Highway - starts from Caloocan
City, where Rizal Avenue ends, and stretches
all the way beyond the edge of northern
Metro Manila.
Roxas Boulevard - Runs along Manila and
Pasay City. Most picturesque as you get to see
Manila Bay. Roads here are generally wellmaintained.
Ayala Avenue – the major road that cuts
through the Central Business District of Makati
City.
Airport
The Ninoy Aquino International Airport (NAIA)
serves as the international airport located
south of Makati. The Manila Domestic Airport
on the other hand is located in Pasay City.
Seaport
The Manila North and South Harbor serve as
International/Local seaports
CORPORATE REAL ESTATE
Basic information on leasing an office space
is provided to prospective companies looking
to lease facilities in Manila.
While this
provides a broad range of useful information
in giving initial guidelines, companies are
advised to consult a professional corporate
real estate agent to discuss other terms and
conditions associated with leasing corporate
space.
A representative from the CBRE
Corporate Services team will be happy to
assist you.
Useful Information
Central Business District (CBD):
Makati City
© 2012 CB Richard Ellis • BPO-CALL CENTER SOLUTIONS GROUP
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Philippine Outsourcing Industry Primer
Prime & Grade A Office Supply:
8,318,602 square feet (772,817 sq.m.)
vacancy at 3.43% for Prime and Grade A
Ortigas Center
Grade A Supply:
5,493,335 square feet (510,533 sq.m.);
vacancy at 3.72% for Grade A
Alabang
Total Supply:
1,459,088 square feet (135,603 sq.m.);
vacancy at 0.41% for Grade A
Eastwood City and UP Ayala Technopark
Total Supply:
3,792,265 square feet (352,441 sq.m.);
vacancy at 2.73% for Grade A
Bonifacio Global City & McKinley Hill
Total Supply:
5,875,961 square feet (546,093 sq.m.);
vacancy at 1.74% for Grade A
Building Classifications:
Premium, A, B, and C
Short Term Lease: Typically three (3) years
Long Term Lease: Typically five (5) years
Required Security Deposit:
Three (3) months office rent refundable at the
end of the lease period.
Required Advance Rental:
Three (3) months applicable to the last three
months of the lease term
Succeeding Rents: Quarterly in Advance
Grade A Headline Rents:
Makati City –
PHP831.00/Sq.M./Month
(US$1.81/Sq.Ft./Month)
Ortigas Center – PHP586.00/Sq.M./Month
(US$1.27/Sq.Ft./Month)
Quezon City –
Rental Payment Classification:
“Net Rent” - electricity, water, air-conditioning
costs, insurance, association and building
management fees are for Tenant’s account.
General Hand-Over for “Fitted” Condition:
 external walls/partitions
 acoustic ceiling
 standard allocation of lighting fixtures
 air-conditioning ducts
 sprinkler system, fire hose cabinet, fire
extinguisher and smoke detectors
Space Measurement:
“Leaseable” or “Semi-Gross” area which
measurement is taken from internal finished
surface of permanent walls and from internal
finished surfaces of dominant portions of the
permanent outer building wall. Included in
the area are areas occupied by window
mullions, window frames, structural columns,
engaged perimeter columns or areas
occupied by additional facilities specially
constructed for individual tenants such as lift
lobbies, passage ways, toilet areas, pantry
and cleaners, cupboard and any similar
useable area. Excluded are all stairs, elevator
shafts and motor rooms and all vertical shafts
carrying services.
Typical Useable Floor Areas:
Grade A: 10,760 to 18,830 square feet for
traditional high-rise office buildings. Office
buildings designed specifically for call
center/BPOs, business process outsourcing
companies, and back office functions, which
occurred mainly in the past two years, tend to
offer floor plates of 16,140 Sq. Ft. up to
26,900 Sq. Ft.
Grade B – 7,532 to 10,749 square feet
Parking Allocation
1 slot per 1,076 square foot leased
Building Management Dues:
Covers cost of building maintenance of
common areas, staff salaries and normal
hours of air-conditioning operations, subject
to annual review.
PHP569.00/Sq.M./Month
(US$1.24/Sq.Ft./Month)
Fort Bonifacio – PHP753.00/Sq.M./Month
Makati City
Grade A –
(US$1.64/Sq.Ft./Month)
Alabang –
PHP537.00/Sq.M./Month
PHP187/Sq.M./Month
(US$0.40/Sq.Ft./Month)
Grade B –
(US$1.17/Sq.Ft./Month)
© 2012 CB Richard Ellis • BPO-CALL CENTER SOLUTIONS GROUP
PHP147/Sq.M./Month
(US$0.31/Sq.Ft./Month)
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Philippine Outsourcing Industry Primer
Ortigas Center
still the preferred locations as shown in the
chart.
Grade A –
PHP152.5/Sq.M./Month
(US$0.32/Sq.Ft./Month)
Grade B -
PHP95/Sq.M./Month
(US$0.20/Sq.Ft./Month)
Eastwood City
Grade A -
PHP90/Sq.M/Month
(US$0.19/Sq.Ft./Month)
METRO MANILA:
“THE CALL CENTER/BPO
HUB”
Metro Manila, also known as the National
Capital Region, is the country's capital and
considered the nation's gateway to the world.
It is geographically defined by sixteen (16)
cities and one (1) municipality, namely the
cities of Manila, Quezon, Caloocan, Makati,
Marikina, Mandaluyong, Las Piñas, Pasig,
Muntinlupa, Malabon, Valenzuela, Pasay,
Parañaque, Taguig, San Juan and Navotas
and the municipality of Pateros. It remains as
the country's major commercial, financial and
educational center and the heart of the
country's national government. It accounts for
30% of the nation’s economy.
The metropolis lists several trading centers
and shopping malls including the Ayala
Center,
Greenbelt
Shopping
Center,
Landmark (Makati), the SM malls in
Mandaluyong, Quezon City, Las Pinas and
Manila, Robinson's malls in Pasig, Manila, Las
Pinas; Rustan's Department Stores, Festival
mall, Trinoma and the Tutuban Center.
Recent additions are major commercial
centers such as The Fort Bonifacio Business
Park and the Rockwell Center in Makati.
Metro Manila is also home to the major
financing institutions including the Asian
Development Bank (ADB). There are 38
universal and commercial banks, 83 thrift
banks and two (2) specialized government
banks to date.
Metro Manila can be called “the call
center/BPO hub” since most of the call
centres / BPOs totaling to more than 460 are
located here with more than 600 sites.
Makati and Ortigas Center (and vicinity) are
Metro Manila hosts 309 higher educational
institutions, 1,784 elementary and secondary
schools. Popular educational institutions such
as the Asian Institute of Management (AIM),
University of Asia and the Pacific (UA&P),
University of the Philippines (UP), Ateneo de
Manila University (AdMU), University of Santo
Tomas (UST) and De La Salle University
(DLSU) are among the few that can be found
here. These institutions provide the pool of
labor where call center/BPOs usually source
their employees.
PROSPECT OF THE
OUTSOURCING INDUSTRY
IN THE PHILIPPINES
Philippine government has been very
aggressive in promoting the country as the
next call center/BPO and business process
outsourcing (BPO) hub. As a matter of fact,
several government agencies such as Board
of Investment (BoI) and Philippine Economic
Zone Authority (PEZA) have been very
generous in granting incentives to all locators
in the country and has also done their share
in aggressively promoting the industry
together with other private sector groups. The
Business Processing Association of the
Philippines (BPA/P) was established in July
2004 to promote the outsourcing prowess of
the Philippines and to ensure the industry’s
continued growth and competitiveness. From
call center/BPO services, business processing
© 2012 CB Richard Ellis • BPO-CALL CENTER SOLUTIONS GROUP
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Philippine Outsourcing Industry Primer
work,
animation,
graphics,
design,
engineering, transcription and software
development, our country is poised to be the
outsourcing hub of the world. Based on
reports, there are approximately more than
638,000 employees in the call center/BPO
industry at the end of 2011.
The outsourcing industry in the Philippines,
especially the call centers and BPOs, is the
fastest growing sector in the country today.
The industry has witnessed a significant
increase in capacity with the demand being
continuously dominated by US companies.
Inquiries from US based companies are still
strong and a number of Indian companies
are also starting to locate in the country.
These companies see a number of
advantages to locating in the Philippines. One
of the plus factor for most call center/BPOs is
the steady supply of highly educated labor
force who view contact center work as a
career job and therefore produces lower
attrition rates compared to other countries.
Add to this the labor pool’s fluency and
proficiency in American English. There is also
accessible technology and infrastructure in the
country.
Metro Manila is still the outsourcing center in
the Philippines. However, the country is
witnessing a geographical diversification of
call center/BPO locations. This is due to the
availability of labor force and the friendly
business environment of provinces being
extended to these companies. With available
infrastructure
complimentary
to
such
companies and additional local government
incentives, these provinces such as Cebu are
proving to be good choices for call
center/BPOs’ secondary and additional sites.
As a matter of fact, Cebu is the second most
popular destination of BPO companies next to
Metro Manila.
In addition to the success of the call
center/BPO industry, there are increasing
amounts of Business Process Outsourcing
companies providing medical transcription,
legal
transcription,
data
transcription,
animation,
software
development,
engineering design, and digital content
services to their clientele base.
The
Philippines has been actively competing with
the likes of India and China for the bulk of
BPO work.
NEXT WAVE OUTSOURCING
CITIES IN THE PHILIPPINES
METRO LAGUNA: Best place for IT-BPO
operations outside Metro Manila and Metro
Cebu. Metro Laguna is within a two-hour
drive to the Ninoy Aquino International
Airport (NAIA) in Metro Manila. It has good
roads,
excellent
power
and
telecommunications infrastructure, good labor
pool, and PEZA accredited sites.
METRO CAVITE: Emerging urban center
outside Metro Manila. Metro Cavite is close
to Manila’s high-density university belt and
labor force. Rental rates are lower than Metro
Laguna.
ILOILO CITY: Most cost-efficient city. Iloilo
City has the lowest average wage, rental and
power rates among the next wave cities.
DAVAO CITY: More than a million people.
Davao City is the only city outside of Metro
Manila with over a million residents and has
an ample labor pool. It also has IT-BPO
facilities ready to be leased at reasonable
rates.
BACOLOD CITY: Best business envorinment.
Bacolod City has a sufficient supply of PEZA
accredited leasable space.
METRO PAMPANGA: Best infrastructure.
Centered on the Clark Freeport Zone, Metro
Pampanga’s benefits includes an international
airport, world-class infrastructure with reliable
and
redundant
power
and
telecommunications and lifestyle amenities.
BULACAN EAST and WEST: Manila’s northern
neighbors between bustling hubs. Bulacan is
transected by two major north-south highways
and is less than two hours away from two
international airports (Manila and Clark).
CAGAYAN DE ORO CITY: Most costcompetitive city. Cagayan de Oro has the
cheapest power rates among the next wave
cities, and also has the lowest rental and
wage rates.
LIPA CITY: Proven host with potential growth.
Lipa City boasts of a good road network and
telecommunications infrastructure.
© 2012 CB Richard Ellis • BPO-CALL CENTER SOLUTIONS GROUP
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Philippine Outsourcing Industry Primer
CALL CENTER/BPO SITE
DISTRIBUTION MAP (NCR)
16 6
5
14
43
53
226
374
6
47
3
11
38
© 2012 CB Richard Ellis • BPO-CALL CENTER SOLUTIONS GROUP
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Philippine Outsourcing Industry Primer
CALL CENTER/BPO DISTRIBUTION
LOCATION MAP (Philippines)
METRO MANILA (980+)
BAGUIO (11)
CAVITA, LAGUNA,
BATANGAS (28)




PAMPANGA (26)



Digitel
Stream
Teletech
ACS
Convergys
SPI
Teletech
RIZAL (6)
CEBU (80+)
ILOILO CITY (11)



DAVAO CITY (19)
E-PLDT Ventus
Teletech
Sutherland



Stream Global Services
Sutherland Global
Synnex – Concentrix Corp
BACOLOD (14)



Convergys
Teletech
TelePerformance
DUMAGUETE (2)


Teletech
SPI Technologies
CAGAYAN DE ORO (4)

Synnex – Concentrix Corp.
Disclaimer: The information contained in this document has been obtained from sources believed reliable. While all reasonable care has been taken to ensure the reliability of such information at
the time of this document’s release, we make no representation as to its accuracy and completeness. This document is solely for the benefit of CBRE clients. Neither CBRE nor any of its officers or
employees accept any responsibility for any direct or indirect loss or damage arising from any use of this document and its contents. CB Richard Ellis Philippines, Inc. ©2012
© 2012 CB Richard Ellis • BPO-CALL CENTER SOLUTIONS GROUP
12