The Philippines “officially” overtakes India in call centers
January 15, 2011
Its “official” according to various reports and industry experts: The Philippines has now overtaken India in call centers and voice related work. According to IBM’s latest Global Locations Trend Annual Report, the Philippines is now the world leader in business support functions like shared services and BPO with India ranked as number two for the first time (and in turn followed by USA, Poland, China, Britain, Columbia, Costa Rica, Fiji, Ireland, South Africa, Sri Lanka, Hungary, Australia, Egypt, Chile, France, Canada, France, Singapore and the Netherlands). The IBM report specifically noted that the Philippines offered a similarly attractive business environment for international business support functions just like India but unlike India’s outsourcing hot spots, labor costs in the Philippines have not increased as much.
Moreover, consider the following facts and statistics about the Philippine and/or Indian call center industries that point towards the Philippines becoming number one:
- A recent article in Business Week quoted the Everest Group as estimating that the Philippines will have pocketed US$5.7 billion in 2010 for call center work from the US, Europe and Australia verses US$5.5 billion for India’s call centers. Nevertheless, India still leads in overall outsourcing revenue at an estimated US$70 billion verses US$9 billion for the Philippines.
- A recent article in Business World quoted Ivan John E. Uy, the Chairman of the Commission on Information and Communications Technology, as saying that the Philippines had exceeded India in terms of new employees hired – ending October with 15,000 new hires verses 13,800 new hires for India.
- A recent article in the Times of India quoted Benedict Hernandez, the president of the Contact Center Association of the Philippines, as saying that the Philippines had more than 500,000 people working in call centers and related services verses 330,000 in India.
- A recent article in the Philippine Daily Inquirer also quoted the Contract Center Association of the Philippines as saying that 350,000 Filipinos were specifically working in call centers verses 330,000 in India.
In addition, even Indian call center groups are now setting up call centers or BPO operations in the Philippines. In December, Tata Consultancy Services (TCS) opened its first BPO/Call Center facility in Southeast Asia in Metro-Manila’s Bonifacio Global City. The call center will initially have 400 seats to service three clients (including Citibank) but the Philippine Daily Inquirer quoted the company as expecting to grow to 1,000 seats and five client within two years.
Does loosing the number one status spell doom for the Indian BPO/call center industry? Not necessarily as the Financial Times has recently reported that Indian outsourcing companies are now in the process of moving much of their more basic back office operations to locations outside of India in order to focus on the delivery of more sophisticated software-based outsourcing products with countries like the Philippines being a major beneficiary of this trend.
Nevertheless, one must also remember that much of India remains underdeveloped and plagued by high unemployment or underemployment. Hence, the lost of jobs or potential jobs for Indians, even if its considered low level or basic work, to another country will still have an impact on India and its future growth rates.