Philippines, India in BPO coopetition

07th March 2011
Philippines, India in BPO coopetition

The first-ever Philippines-India Outsourcing Partnership Summit was held last week in Bangalore, with CII Karnataka partnering  with Philippine Trade and Investment Centre, Commercial Section of the Philippine Embassy in New Delhi. The country has positioned itself as a strategic partner to India’s immense capabilities in ITeS as more and more Indian companies have made strategic moves to locate part of their global service delivery chains in the Philippines.

Gregory L. Domingo, Secretary (Cabinet Minister) of the Philippine Department of Trade & Industry stated that there has been an explosion of outsourcing demands due to telecom revolution, transportation and free flow of people. BPO is the fastest growing industry in the the Philippines and has employed nearly half a million people. This will grow by 15-20% in next couple of years. The forecast for this year for the BPO industry in the Philippines is to grow between USD 11 to 13 billion.

Aroon Raman, Chairman, Karnataka State Council Confederation of Indian Industry highlighted the increasing number of Indian companies in the Philppines “Today, like India, the Philippines is one of the leading voice-operated business process outsourcing (BPO) source in terms of revenue (US$ 5.8 billion - voice) and number of people (500,000) employed in the sector. In partnership with the Philippines, India has over 20 leading IT/BPO companies in the Philippines. Several Indian companies like WIPRO, TCS, HTMT, L&T Infotech, Aditya Birla Minacs and Genpact have already set up their BPO operations in the Philippines.”

Kapil Rampal, CEO, Creative Crest, which operates an outsourcing centre in Manila, said “The BPO industry started as an innovation. It offered new ways to manage business processes efficiently using outsourcing. This innovation has to continue. The Philippines offers avenues for continuing this innovation. The industry is still in infancy stage and has an immense potential to grow. The Philippines offers platform to compliment India's strength in Global Outsourcing stage.”

Aparup Sengupta, Global CEO, AEGIS BPO, which employs more than 12,000 employees in the Philippines added, “Philippines is an important destination in global outsourcing market. Other cities in Philippines like Cebu are emerging, and the country is growing beyond Metro Manila which is a positive growth for the BPO industry as well.” He appreciated the supportive Government policies in the country.

Swaminathan Dandapani, Managing Director, Infosys BPO Ltd. said, “The choice of the BPO destination lies with the client. Infosys BPO operates from multiple destinations across the globe, including The Philippines, to continue to give more value to clients.”

The Philippines, in order to sustain the growth story in the rising number of companies has come up with various provisions like: Duty free importation, Philippines Economic Zone Authority (PEZA) as the single window for BPO and call centres, tax incentives and more.

Martin Crisostomo, Executive Director, Business Process Outsourcing Association of the Philippines called India as the big brother of the Philippines in the outsourcing industry. As the country continues to develop capabilities into higher-value verticals including knowledge process outsourcing and the creative industries, it continues to aspire and look to India as a partner in the outsourcing sector. He also talked about the commencement of Filipino investment in the Indian BPO industry as well.
S Chandrasekhar, Vice Chairman, Karnataka State Council CII, concluded that the Philippines is not a threat to India, its complimentary. There is huge potential for both the countries to collaborate in the BPO and outsourcing sector for mutual benefit.

Analyst views:
Advisory, Investments and Research Firm, Tholons has ranked the world’s top 100 outsourcing destinations, placing Bangalore, India at the head of its list, followed by Mumbai and Delhi. Manila, Philippines comes in as number four and is rated , "BPO Capital of the World",followed by Chennai and Hyderabad  
Tech watcher Gartner, recently identified the Top 30 countries for globally sourced activities in 2010-11, each one rated according to 10 criteria, and found that eight new countries have made their debut in the Top 30.
The leading emerging offshore locations evaluated by Gartner in the Asia/Pacific region are (in alphabetical order): Bangladesh, China, India, Indonesia, Malaysia, the Philippines, Sri Lanka, Thailand and Vietnam.
Gartner continues to see foreign companies being attracted to the Philippines’ young, experienced labor pool specialising in contact centers and finance and accounting (F&A) business process outsourcing (BPO), complemented by good language and cultural compatibility with western economies. 

March 7 2011