subject: RP Set to Overtake Other BPO Rivals [print this page] ThePhilippines contact center is poised to overtake the world's top provider of business process outsourcing services as industry players firm up their strength and marketing efforts. The Philippines call center industry is expected to post a compounded annual growth rate (CAGR) of 62 percent, outgrowing three other primary destinations: China, India and Malaysia. The Philippines is poised to generate revenues of 4.1 billion dollars by year-end to corner 1.4 percent of the global market as a result showed of an intelligence report by the indepent ICT research and advisory firm XMG.
Cesar B. Bautista, co-chairman of the National Competitiveness Council (NCC), told the Philippine Daily Inquirer that the Indian cyber services sector was losing its edge as telecommunication infrastructure get saturated and costs go up. At the same time, Philippines contact center sector has started strengthening their organization into something like India's National Association of Software and Services Companies (Nasscom), which can represent the members as a bigger and more influential entity. He was alluding to the Business Process Outsourcing, which he said could now be more decisive because it had reformed its structure, unlike past years weak group. It was only expected that the Philippines would emerge as a leading provider of BPO services despite coming into it later than other outsourcing countries did.
The Philippine outsourcing industry has far exceeded all analyst expectations, the Philippines is experiencing an unprecedented growth rate of 62 percent CAGR, and will surpass Malaysia. Malaysia's revenue forecast by year-end is estimated at $3.6 billion, achieving 38-percent growth and cornering 1.2 percent of the global market share. In 2006, Malaysia and the Philippines was neck-and-neck with 1.04 percent and 1.02 percent, respectively, of the share of the global revenue. India is estimated to corner $34.1 billion in total revenue by year end 2007 at 29.5 percent CAGR and settling in with 11.5 percent share of the global market. China is estimated to have 4.4 percent share of the global market with 2007 total revenue figures forecasted to hit $13.1 billion while growing at 47.9 percent CAGR.
He noted that information technology-enabled services had become the fastest growing sector in the economy, which is expected to be providing some 400,000 jobs by the end of this year compared to 8,000 in 2000. To prove his point, Bautista cited to a report that US-based research firm Frontier Strategy Group released earlier this month, which identified the Philippines contact center as one of seven markets that would drive corporate profit growth in 2008 and beyond. Based on FSG's survey of at least 100 top executives from top performing firms in the world, 86 percent said the Philippines was a top destination in the Asia-Pacific-together with inland China, Vietnam and Indonesia.
The scope of the global market in this study includes both the onshore and offshore delivery of outsourcing services. The study is part of its year-to-end forecast conducted in the fourth quarter to estimate year-end performance of the global outsourcing market, now worth $297 billion and growing of 19.31 percent. The cost of operations in top outsourcing destinations is increasing due to wage hikes needed to retain good people, coupled with rising real estate prices and the effect of accelerated currency appreciation in Asia.
