BPO Philippines – Industry Poised To Bounce Back

BPO Philippines – Industry Poised To Bounce Back

The coronavirus (COVID-19) has crippled the global economy, with large firms forced to cut expenses and the supply chain below them also making hard choices to let go of people or even shutting down.

The business process outsourcing (BPO) industry in the Philippines is no different. Many BPO companies in the Philippines had to contend with declining demand as international companies that rely on outsourcing had to take a step back to review their financials in the hopes they can ride out the pandemic one important dollar at a time.

“For as long as there’s no cure or vaccine available, multinational corporations will most likely change their outsourcing strategy by keeping more work onshore and in-house. With COVID-19 still being around and with it the possibility of another lockdown, no outsourcing executive will take a gamble and risk his or her job by moving a large number of seats offshore,” said Ralf Ellspermann, CEO of PITON-Global, a leading BPO provider in Manila, Philippines.

For small and medium enterprises that have a few outsourced agents in the Philippines, that will not be much of an issue, Ellspermann added. “You can always and quickly re-shore five to 10 seats. But it’s a totally different story when you need to quickly move hundreds of seats,” he added.

For PITON-Global, which partners with dozens of high-growth startups and established brands around the world, the pandemic is not forever—and BPO companies in the Philippines will withstand the test of time, similar to how they were able to survive regulatory changes and various tax reform policies over the last few years.

“The BPO industry in the Philippines is pretty resilient. There’s no doubt that the industry will recover from the pandemic. How fast and to what degree is uncertain and largely depends on the duration as well as the progression of the pandemic,” Ellspermann said.

When lockdown measures were first imposed in mid-March to contain the spread of the virus, only essential businesses remained in operation. One of those was the BPO industry, which has buttressed the country’s economy, alongside remittances from overseas Filipino workers, through many changes in the political landscape.

BPO companies in the Philippines got down to work, knowing full well there were services that still needed to be delivered—from trip cancellations to insurance support and all necessary backup needed amid the pandemic.

BPOs in the country, taking a page from the global practice of their international clients, readily established stricter health standards and social distancing measures. Staff members, especially those living outside business hubs, were given accommodations, or, in the alternate, provided shuttle service to and from their homes.

The industry has always been regarded as a massive market place for high-value jobs for the Philippines’ English-speaking graduates. At the beginning of the decade, BPO companies in the Philippines were employing 1.3 million Filipinos. They were also churning out more than US$26 billion in annual revenues, equivalent to 7 percent of the country’s gross domestic product.

As more and more companies saw fit to expand their reach, outsourcing became a need. Today, there are more than 800 BPO companies operating in the Philippines.

Thanks to a population with a 94-percent literacy rate, which is the second highest in Asia, the country has become the country of choice for these companies in need of outsourcing—whether startups or larger firms.

The workforce of these BPOs has more than 20 years of experience, serving various buyer markets, including the United States (60 percent), Australia (25 percent), United Kingdom (10 percent) and other markets (5 percent).

The pandemic, for sure, will just be a hitch—albeit a challenging one—for this active industry. As the global economy is nursed to health, the BPO industry in the Philippines is ready to take new orders once again.

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