Is Outsourcing Good For The Philippines?

Is Outsourcing Good For The Philippines?

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In this post, we will talk about whether outsourcing is good for the Philippines, or does it bring more economic harm than good.

For two decades, the Philippines’ outsourcing industry has been experiencing a meteoric rise. And it may continue to do so in the next few decades. As a result, it leaves an impressive mark on the Philippine economy and may continue in the coming years. Younger Filipinos in the workforce are the most enthusiastic in the outsourcing industry. Most of them made decent to lucrative careers by staying in this industry for a long time.

With that alone, one can say that outsourcing has a good impact in the Philippines. Not only in the economic but also in the cultural aspect as well. But, the good always comes with the bad.

Read on to know how good outsourcing in the Philippines and the negative impacts that come with it. We are also going to add the effects of outsourcing to the Philippine economy, as well as the negative.

Outsourcing: What Is It?

Before we tackle the topic, let’s first define what outsourcing is. Outsourcing happens when a business brings its operations to another country. Many international companies transfer their operations to countries like the Philippines. Most of these companies bring their customer support operations here. But, call center is only one facet of the industry. There are many other kinds of jobs that companies from other countries can outsource. In recent years, businesses such as animation and marketing have offshore offices.

How Is Outsourcing Good For The Philippines?

Let’s go back to 2000. This is the year that the Business Process Outsourcing prospered in the country. Yet, most Filipinos back then didn’t know what BPO means. It’s during this year that most call center companies we have today were mere start-ups. 20 years after, the Philippine BPO industry became a huge industry. Florencio Abad, the then secretary of the Budget and Management Department, reported so. In 2012, the BPO industry garnered $13 billion in revenues. It’s also important to note that the revenue increased throughout the years.

Needless to say, outsourcing has done good for the Philippines. Even better. Below are some of the good effects of outsourcing business in the Philippines.

Rise In The Real Estate

Most high rises in big Philippine cities are residential, and we have the BPO industry to thank for that. Due to the rise in the middle-class market due to job generations, many people need to be near office. That’s why many townships and condominiums sprung out of nowhere in Metro Manila. Not only that, call centers and BPOs need colossal office spaces to run operations. Thus, there is also a rise in the construction industry.

Improved Telecommunication

The telco industry has been receiving flak from consumers, due to low speed. Be that as it may, we still can say that the Philippines’ telco technology has come a long way. Thanks to outsourcing, both government and private sectors have been taking actions. Gradually, they ensure that the country’s net services are reliable enough for work. Home Internet may be frowned upon by most consumers, but that isn’t the case in BPO offices.

Small Business Boom

Because there is an immense increase in offices in urban areas, the effect of the outsourcing industry boom in the Philippines also rippled towards small businesses. Somebody should cater to the needs of those who work in BPO companies. Thus, many food outlets and convenience stores opened in areas near call centers and BPO offices.

The Downside Of Outsourcing

Although outsourcing has done a lot of good for the Philippines, it also has some adverse effects. Below are the two main disadvantages of outsourcing to the Philippine economy.

Traffic Becomes A Bigger Problem

This is true, especially in urbanized cities. Since more and more people work in call centers and BPO companies, hundreds of thousands (even millions in some areas) commute daily from home to office and vice versa. As a result, cities experience traffic congestions during the so-called “rush hours”. The government has a difficult time in providing a solution to this problem.

Too Many People

While there are many cities in the Philippines, most BPOs focus on creating their base in only a few. Cities like Metro Manila, Cebu, Davao, and Cagayan de Oro are where most offices are located. So, those who live in smaller towns and provinces may need to relocate to the city to work. When there’s a massive influx of people relocating to the city, a pile of problems happens. Like the one mentioned above, traffic is just one of the many unfavorable effects in the country.

So we believe that, yes, outsourcing businesses is good for the Philippines. Although there are some downsides to it, the good ones will always prevail. If you want your business outsourced in the Philippines, our company can help you with that. Check our different services by clicking on the link.