The Philippines has gained traction as a dynamic emerging market, with gradual financial developments leading to greater investment opportunities. A known powerhouse in the business process outsourcing industry, the country continues to be a strong performer in Asia, managing upward forecasts of 6% GDP growth for 2016 and 2017, according to both IMF and ADB. Focused investments implemented through the private sector, sensibly budgeted infrastructure, and public-private partnership projects, together with an astutely skilled labor force have contributed to the Philippines’s intensifying global competitiveness.
The Largest English Speaking Population in Asia
Filipinos are primarily bilingual people, with one or several among 87 local dialects as the vernacular, and English as a secondary language. English has become an integral part of Philippine culture and everyday life, as common as Tagalog, the capital’s native dialect. Filipinos communicate in conversational English, but also employ English as a national standard across media, business, government, and academia.
In 2013, the Philippines garnered the top Business English Index (BEI) score for the second consecutive year, at 7.95. Norway and the Netherlands are the only other countries that scored above 7.0, from a sample based on 137,000 global respondents from non-native English speaking countries. The BEI quantifies an organization’s proficiency and Business English competency, stating that scores above 7.0 means individuals “can take an active role in business discussions and perform relatively complex tasks.”
Work Force Capability, Work Space Accessibility
Globalization has brought about a very competitive landscape for businesses that requires a large investment in human capital, resulting in the Business Process Outsourcing (BPO) industry. Besides providing affordable labor, the Philippines has proven skill sets in business intelligence as well as creative services. The country also boasts a globally recognized population of Overseas Filipino Workers (OFWs), prominent in industries such as healthcare, education, hospitality, and other service sectors.
The Philippines currently aims to provide 10% of the total global BPO requirements, which amounts to $25 Billion. Companies striving to be cost-effective drive demand and effectively lower barriers to trade, all without sacrificing quality of service. Significant technological advancements, on the other hand, lead to more efficient delivery of services. The combined revenues from the top two BPO companies alone amounts to over $1 Billion (Accenture Inc. & Convergys Philippines Services Corp.) This powerful revenue generation has already begun to overtake total OFW remittances.
Office rental costs offer some of the cheapest rates in the Asia Pacific region. These low costs continue to propel the Philippines as the prime destination for companies looking for BPO locations that provide the quality human capital required to create efficient systems.
Regional Developments and Economic Advantages
The Philippine Economic Zone Authority (PEZA) is a government agency under the Department of Trade and Industry which aims to promote special economic zones within the country where companies can enjoy incentives, particularly in export-oriented manufacturing and service facilities. Across the country, in bustling metropolitan cities like Cebu, Davao, and Clark, as well as resource-rich provincial districts, there are agro-industrial zones, IT parks and centres, tourism zones, and manufacturing economic zones.
Some fiscal incentives include 100% exemption from corporate income tax and the ability to import capital equipment and raw materials duty and tax-free. Non-fiscal incentives include a more simplified import-export procedure and the ability to employ non-resident foreign nationals to supervisory, technical, or advisory positions.
Driven by the forces of economic progress, inclusive industry growth, a wealth of human capital and the promise of untapped resources, the Philippines is poised to be Asia’s next thriving business destination.
Sources:
http://www.worldbank.org/en/country/philippines/publication/philippine-economic-update---april-2016
http://static.globalenglish.com/files/reports/Business_English_Index_2013.pdf
http://www.philstar.com/business/2016/01/03/1538601/bpo-revenues-soon-overtake-ofw-remittances