It’s no news that India has long been the undeniable leader in the space of IT, Software, and Web Development Outsourcing. The Philippines, for the 7th year in a row, continues its growth of Full Time Employees (FTEs) since 2006 at a rate of 46% annually. In The Tholon’s 2013 Top 100 Outsourcing Destinations Report (source), the following 4 Philippine cities were listed in the top 100. Manila NCR (3), which claimed the third top outsourcing destination spot in this year’s List, ousting Delhi NCR (4) to number four. Cebu City (8) likewise moved up one spot in the List, from 9th to 8th position. The newcomers to the List are Bacolod City (94) claiming the 94th position, while Baguio City (99) pulls in at the 99th spot!
There are significant reasons why we are experiencing this remarkable growth in the space of Web Development in the Philippines. Much like the reasons that earned the Philippines the recognition as the current global market leader for voice BPO, Western providers, have embrace the Philippines as a potential rich domestic market for IT Services.
Language Fluency and Social Compatibility
Western culture is widely accepted in the Philippines. For reasons being heavily rooted in the country’s history, given that for almost 50 years until 1946 the Philippines was governed by the US. As result, English is the principal language used in business and in the schools. It’s quite remarkable that as much as 78% of the 100M+ population in the entire country are English speakers, compared in contrast to India, which is only 10%. In addition and a significant plus, Western culture is not only very popular throughout the country; you can see its influence in the people, their food, music, as well as the structure of their government.
Lower Cost of Labor
The current minimum wage in the Philippines is p466/day (approx. $10-$11) which is due to the lower cost of living within the country. The Philippines is almost as low as it is in India which proved to be one of the biggest draws that made India a very desirable option for Western Companies to Outsource IT projects to. Highly educated graduates can be employed for as low as $400-$500 per month. Software Developers do have higher salary rates, but Outsourcing Web Development in the Philippines can be provided at about 30%-70% of the cost of the same work done in a Western country.
Growing and Highly Educated Workforce
Up until the opportunities from the BPO space many of the country’s top graduates leave the country as OFWs (Overseas Foreign Workers) because of the need to earn in more developed countries to send money home. This is evidence that the graduates of the top universities in the Philippines can compete on international level. Now, more and more graduates prefer to stay in their own country where they can now be exposed to the same level of skills, without sacrificing their family life. For local Web Development Companies in the Philippines this means a greater pool of qualified graduates motivated and inspired to do their best.
Booming Economy and an Improved Political Climate
The Philippines has shown very stable progress over the last decade and its international investment rating continues to improve which has spawned a huge influx investor interest. Together with the fact that the government is actively supporting the Outsourcing Industry as it has become one of the country’s biggest revenue sources. We are even seeing Indian IT Outsourcing companies which have established branches in the Philippines which is a sign that a shift has occurred.
In summary, it is clear that the Philippines is one of the world’s prime destinations for Web Development. Although the US is still the majority of the companies who outsource to the Philippines, we have experienced an increasing interest from neighboring countries like Australia and Singapore.
