Philippines replacing India as the favorite BPO destination: Economist Survey

India enjoyed the status of most favored offshore BPO destination for a long time since 2000. But the BPO market is witnessing paradigm shift according to the survey of Economist Corporate Network (Economist). According to the survey, 45 percent of the respondents prefer Philippines as the preferred off shore destination for the call centre services. Among the respondents only 25 per cent found India attractive for BPO services and the remaining thirty per cent voted China as the preferred location.

However there is relief to the Indian BPO industry according to the National Association of Software Services Companies (Nasscom). Nasscom forecasts a growth of 14% in the Indian IT-BPO services for the current year. The reason for this is the high demand for skilled qualified technical personnel. But a few analysts believe this would be a challenging target in the context of economic slowdown faced by the developed nations.

On the other side, Philippines reported an $11 billion in revenues and more than 600,000 job opportunities in the last decade according to the survey. The recent success in voice –based BPO services has helped Philippines to overtake India for the title of favored offshore BPO destination.

The main reasons behind the surge of Philippines in the BPO industry:

  • Growing literacy rate.
  • Fluent English Speaking Community.
  • Customer orientation approach of the people.
  • Affordable Human resources.
  • Low attrition rate.
  • Reduced operating cost.
  • Government aid in training human resource
  • Better infrastructure facilities.

In India the relatively changing tax and regulatory measures are threatening the foreign investments in BPO industry. The tax authorities revised the revenues generated by IT-BPO industry as on-site revenues from exports. As a result the companies end up paying high tax. Despite these unfriendly policies and other external pressures, India still holds the majority stake in the industry.

As per the survey, India generated revenue of $75 billion whereas China and Philippines earned $30.4 billion and $11 billion respectively for the year 2011. In Philippines the government continues extending their support in developing the human resource anticipating the BPO boom. There is also effort from the government side to improve the telecommunication infrastructure in order to attract more foreign investments.

Philippines population is relatively better off when it comes to speaking fluent English, which has unfortunately gone against Indian in voice-based call center services. Also the customer service oriented mindset of the Philippines people adds to their resource advantage.

Despite of all the privileges enjoyed, no industry can flourish if it is not productive. Hence, it is up to the Philippines to ensure that they maintain the status of world’s most preferred offshore destination and continues to prosper in the global market.

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