Reasons Why Businesses Outsource to the Philippines

There are a huge number of reasons for outsourcing non-core business functions. Owners of both well-established and startups, as well as corporations, choose this option as a way to save costs, particularly in company operations. This business strategy is also utilised to drive the business into a more competitive position and solve manpower concerns without the costs of hiring more employees.


In most cases, businesses tend to outsource their functions to service providers located overseas. The Philippines, for example, is one of the most recognisable countries that provides outstanding offshore outsourcing services. 


In this article, we will talk about the different reasons why businesses outsource to the Philippines.


Cost Savings


Businesses outsource to the Philippines to save money. This is as the Philippines have a lower cost of living, which translate to lower salaries. This guarantees an approximate savings of 40% to 70% off the amount businesses would pay when they hire someone from their location (e.g.: the United States).


Offshoring to the Philippines is also one of the best recommendations due to the country’s favourable tax laws. The Philippine government introduced the Special Economic Zone Act which allows foreign companies to gain tax benefits and exemptions such as, a four-year corporate income tax exemption, local tax permits exemptions, permanent visas for foreign investors, and duty-free import of equipment, supplies, raw materials, etc.


In addition, foreign businesses can also register their business with the PEZA or the Philippines Economic Zone Authority to receive additional incentives and privileges such as tax exemptions as well as lower import fees.


Huge Pool of Quality Talent


One of the most common concerns of businesses is the quality of work. Some businesses hesitate to outsource and worry that outsourcing may result in a lowered quality of work. However, that is not the case for Filipino employees. 


The Philippines produce an average of over half a million graduates and come out to the workforce from local universities and colleges. This provides businesses access to the country’s huge talent pool. In addition, the government also sponsors several university courses that are specifically focused on skills needed for the country’s BPO industry.


This provides a boost to the country’s literacy rate which was recently recorded at 97.5%. Larger than other countries in the BPO sector such as India. This also provides a continuous flow of fresh graduates highly prepared for every business outsourcing needs.


Security Regulations and Data Privacy


Considered one of the main concerns of businesses when it comes to outsourcing or offshoring, your business’s data is safe if you’re planning on handling some of your non-core business functions to a BPO in the Philippines.


This is as the Philippine Government introduced a huge number of policies to safeguard data privacy. Following


this, the Data Privacy Act, in 2012, brought the Philippines’ data policies to international standards. With this act, any individual or company in violation of the Privacy Act can face imprisonment for up to 6 years and be fined a huge amount of over $20,000 to $100,000


Outstanding Track Record of the Filipino Outsourcing Industry


The Philippines has been providing outstanding outsourcing services since 1992. In addition, the country’s outsourcing industry currently provides almost one and a half million jobs, which is continuously increasing every year. 


This means that the Philippines has already established a culture and are fully accustomed to outsourcing practices and policies allowing businesses to get started easily and efficiently.