September 1, 2006

Philippines pushes for aggressive marketing promotions > of ICT and BPO in the US

The demand from global companies wanting to cut costs and focus on their core competencies remains a vital market for Philippine IT and IT-enabled services firms.

The United States is not new to this game, accounting for about 60 percent of the total business processing spending in the global market. Business processing work involves an outside company taking over various backoffice functions, including accounting, procurement, and human resources administration, and the like.

In fact, one of America's Fortune-listed companies Dell has already established a 700-seat contact center in the Philippines in 2005 for technical and customer support.

In 2005, the Philippine business processing sector grew at such a fast rate by 137 per cent or 2.5 billion dollars in revenues. During the same year, the industry saw a 53 per cent increase in the BPO workforce or 81, 000 new jobs generated.

As one of the Philippines' fastest growing industries, the BPO boom was led by the demand for offshore call centers. In fact, there were about 112, 000 workers employed in call centers in 2005, and the industry generated about 1.12 billion revenues during the same period.

In addition, the BPO industry in the Philippines has the largest number of accredited accountants in Asia. Filipino accountants are known for their flexibility in working with multiple standards in accounting.

According to neoIT's Annual Mapping Offshore Markets Update in 2005, the Philippines is ranked 3rd in the world's top BPO destinations. It is considered the most serious rival to India when it comes to BPO.

Aggressive marketing of ICT and BPO

On September 25-October 6, the Philippine business processing companies' foray into the global market will be given a boost through a trade and investment mission organized by the Department of Trade and Industry through the Center for International Trade Expositions and Missions (CITEM) and the Board of Investments (BOI).

"The mission aims to sustain the government's aggressive marketing promotions of the Philippine IT and BPO capability on customer relations management, procurement, financial, H&R, data transcription, design and engineering, as well as animation in the United States," explained Trade Assistant Secretary Fe Agoncillo-Reyes, executive director of CITEM.

Activities during the mission include a business forum on the Philippine IT advantage, pre-arranged business meetings, and a high-level networking reception. Telecom company Philippine Long Distance Telephone Company is sponsoring the business forum.

The United States remains the Philippines' primary source market for outsourced business processes and contact center services.

According to statistics, the global BPO market is projected to reach 173 billion dollars by 2007. In 2004, global BPO market reached 131 billion dollars. Presently, North America remains the dominant market for ITES-BPO services, accounting for nearly 60 percent of the total market.

"We would like to help our small enterprises in the BPO space who want to collaborate with international partners through this trade and investment mission. These local enterprises are going to be crucial players in the knowledge-based economy and the US mission can become a strong bridge for partnerships and investments," added Agoncillo-Reyes. "Also, we hope to invite delegations from the United States to attend e-Services Philippines, the government's flagship show for our players in the IT and ITES industries."

As more US firms focus on core competencies, Agoncillo-Reyes said, opportunities abound for niche back office services. For the Philippines, its cultural and geographic lead is already a key advantage. It is only a matter of developing scalable skills and resources required by target niches through domain expertise and continuous training.

"If we are to leverage on our unique attachment to the US model, there are vast opportunities present for customer contact center, business back office, human resources work, content management and development, arts and engineering, procurement, software and medical transcription," said Agoncillo-Reyes. "The challenge is to position the Philippines as a preferred sourcing destination of choice for US companies"