Contact Center Solutions Featured Article

Study Identifies Weaknesses in Philippines as Outsourcing Location

September 18, 2007

When examining the opportunities in the offshore contact center market, we often look at the Philippines as an attractive location as it offers a growing contact center outsourcing sector, educated and skilled labor force, and infrastructure progression that supports growth from outside investments.


Contact centers in the information technology (IT) investors, specifically have found the Philippines to be a place of choice. According to an Economist Intelligence Unit study sponsored by the Business Software Alliance, the elements pulling down the country’s competitiveness include its infrastructure, productivity and legal issues.

This study ranked the Philippines better than China and India in terms of the ease of doing business, but scored the country as relatively low in terms of overall competitiveness. Out of 16 Asia-Pacific countries, the Philippines ranked 11th.  The country also ranked 47th out of a total 64 states surveyed by the Alliance.

Seow Hiong Goh, BSA director for software policy for Asia, noted that the country also ranked low in terms of research and development and infrastructure. The Philippines scored 68 percent in terms of business environment as the ease of doing business and a relaxed attitude to foreign ownership has drawn significant business from international firms from the United States, Japan, South Korea and Taiwan.

While the environment has helped create a competitive call center industry as a lower cost alternative to India, the Philippines also needs to address some of the weakness in human capital, IT infrastructure, research and development and legal environment in order to improve its ranking.

According to Hiong Goh, the government and the industry must continue to work together to create an environment that will allow people to exercise creativity and ingenuity as it will be a key factor in improving the country’s competitiveness in attracting IT companies and positions.

The study grouped twenty-five indicators into six categories, including overall business environment, IT infrastructure, human capital, legal environment, research and development, and support for IT industry development.

Focusing its efforts on attracting IT companies to the Philippines can deliver significant benefits for the country. For one, the positions that these companies offer require higher education and often also deliver a higher pay scale. A company with such an environment can certainly boost the economy of the city or country in which it is located.

On the flip side, the country has to have the right combination of attractive elements to offer to the organization in order to be considered a competitive alternative. Hiong Goh’s recommendation that the government and industry work together to create an environment conducive to alluring overseas investors makes sense and should be considered standard protocol to the benefit of the entire country.

Susan J. Campbell is a contributing editor for TMC and has also written for eastbiz.com. To see more of her articles, please visit Susan J. Campbell’s columnist page



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