Business process outsourcing in the Philippines

One of the most dynamic and fastest growing sectors in the Philippines is the Information Technology – Business Process Outsourcing (IT-BPO) Industry. The industry is composed of eight sub-sectors, namely, knowledge process outsourcing and back offices, animation, call centers, software development, game development, engineering design, and medical transcription. The IT-BPO industry plays a major role in the country's growth and development.

The IT-BPO industry started from a single contact center, the Accenture Global Resource Center, which was founded by Frank Holz in 1992. This marked the beginning of the local BPO industry in the country.

In 1995, the Special Economic Zone Act, thus establishing the Philippine Economic Zone Authority, was passed by the Philippine Congress. This Act provided lower area requirements for developments and tax incentives, which consequently attracted foreign investors.

In 2001, a US-Based outsourcing center called the "People Support" had its operations moved to the Philippines, generating 8,400 jobs for the country.

In 2003, the Convergys Corporation opened up two more call centers in the Philippines. It was at that time when Jack Freker, the president of Convergys Corporation, announced the incorporation of the Philippines in the revenue generation plan and the global expansion of the company. In 2005, accounting for 2.4% of the country’s GDP, the Philippine acquired over 3% of the global BPO market. A year after, with ePLDT Ventus leading in the BPO industry, domestic economy increased by 5.4% and 11,000 more people were employed. In 2010, the Philippines was then declared the world’s BPO capital. From this point, the BPO industry continued to grow and generate more revenue, with the industry providing the most job opportunities in the private sector.

Since the 1980s, unemployment rate stayed between 8-11% in the Philippines. Even if the economy did have some growth, there was always the problem of job generation. The BPO industry has the most substantial contribution to economic growth, yet it only employs 1% of the labor force. The MTPDP (Medium-Term Philippine Development Plan 2004-2010) has set a target to create "1.5 million jobs a year between 2004 and 2010, or a total of 10 million jobs by 2010." Though the government came short of this success, in 2006 the government was able to identify nine employment-generating factors and these are cyber services, aviation, agribusiness, health services, mining, creative industries, hotels and restaurants, medical tourism and overseas employment. The BPO sector only accounted for 0.075% of the GDP in 2000 but rose to 2.4% in 2005 which indicated a great potential for generating employment. In this sector alone, it reached a staggering one million workers by 2010 and accounted for 27% of all new jobs.

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