The highly turbulent market environment of the past two years has proven that contact center Philippines is practically recession-proof industry and is emerging as one of the most important contributors to its economy.
In 2008, output of the outsourcing industry increased to S$ 6.1 billion from US$ 4.5 billion in the preceding year. Overall, the business process outsourcing (BPO) sector accounted for 3.5% of the country’s gross domestic product in 2008.
The BPO sector actually grew by 25 percent in 2009 while the Philippine economy almost came to a grinding halt, growing at less than 1 percent. The industry generated US$7.2 billion in revenues last year, up by 19% year on year. This makes the Philippines the biggest BPO destination in the Asia Pacific and the second largest service provider in the world after India. Call center Philippines still account for the largest portion of the BPO revenues, 69% of the industry’s total take or $5 billion last year.
Even as other countries continue to struggle with their lagging job markets, BPO industry has been continuously opening up employment opportunities. Thousands of young graduates who would have been jobless found employment in contact center Philippines that sprouted all over the country in the past few years.
In 2009, the BPO industry saw an 18% growth in employment. Total hires reached 400,000 with 280,000 of those working as call center agents in the Philippines.
The BPO sector is not showing any signs of slowing down when it come to creating new jobs. In February 2010 alone, 72 percent of the 25,700 new BPO jobs in the world went to the Philippines, according to a recruitment, and training outfit for call center agents. This is still far from the industry’s employment saturation point.
“People are really ramping up. There are recruitments left and right, so we’re seeing a very steep recovery in the first half,” Gillian Joyce Virata, information and research director of the Business Process Association of the Philippines (BPAP) told reporters. Although she expects this demand for BPO workers to taper off by 2011 she said the industry has the capacity to employ one million Filipinos within the next five years.
As the global economy switches to recovery mode contact center Philippines is set to boost employment and investment in the country with new demands for outsourcing services. In anticipation of the surge of business growth in the United States and Europe, contact center Philippines are already expanding operations and all set to hire thousands of new personnel this year.
The contact center Philippines industry is also moving in on other English speaking markets outside the US and Europe. These include Australia, New Zealand and Middle Eastern countries where English is widely spoken. More Australian firms were looking to outsource to the Philippines, Virata said.
Another positive development, and proof of the importance of the BPO industry, is the recently signing of a memorandum of understanding (MOU) between the Department of Education and Spain’s Ministry of Education, Cervantes Institute, and the Spanish Agency for International Cooperation and Development (AECID).
The MOU aims to strengthen the reintroduction of Spanish language in public secondary schools. The agreement seeks to increase the competitiveness of the contact center Philippines in the Spanish-speaking market estimated to be worth $4 trillion.
Analysts predict that 2010 will be another banner year for the BPO industry. Contact center Philippines and other sectors of the industry could rake in between US$11billion to US$13 billion and open up 900,000 additional jobs. The industry’s expected growth in the near future is so strong some experts say contact center Philippines is within striking distance of outpacing India as outsourcing’s global capitol.
The spike in the BPO industry is spilling over to other industries in the Philippines. The expansion of contact center Philippines operations is projected to absorb the current oversupply in office space. Last year, the expansion of its BPO office portfolio doubled the revenues of Ayala Land, the country’s largest property developer to P1.99 billion.
By the end of 2009, contact center Philippines were occupying 178,160 squares meters of Ayala Land’s leased space. The property developer also earned bigger revenues from higher BPO lease rates from its two BPO office buildings in Makati.
In other regions of the country, the booming contact center Philippines industry is also spurring construction of new office buildings. The surge in the prices of cement and other construction materials indicate the rebounding demand for vertical property developments in and outside Manila. Ayala Land, for instance, is already drawing plans to build more BPO complexes in Pampanga and Davao City and Iloilo City.
While contact center Philippines continue to dominate the BPO sector, industry the sector is also evolving beyond voice and leaning, said Virata. It is moving toward higher-value services and Philippines is now in a position to take on higher-value jobs, after proving its worth as a premier destination for call center services, Richard Mills, director of the Canadian Chamber of Commerce of the Philippines, said.