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The article lists the Top 8 Outsourcing Destinations in the Philippines as of 2022.
The Top 8 Outsourcing Destinations in the Philippines [2022]
Introduction
If you’re looking for a great place to set up your outsourcing business, the Philippines is an excellent choice. With over 7,000 islands to choose from and over 100 million people living within its borders, there are lots of options for you to choose from. We’ve compiled our list of the top outsourcing cities in the Philippines based on factors such as cost-effectiveness, infrastructure, and quality of life—all things that matter when choosing where to start your business.
Photo by Kim Gamara from Pexels
- Metro Manila/National Capital Region (NCR)
Metro Manila is the largest metropolitan area in the Philippines, and it’s also where the capital city, Manila, is also located. Its natives are the Tagalogs, but because of migration, plenty of other Philippine ethnic groups call Metro Manila their home. With that, the city is truly a melting pot of cultures, as its identity is also shaped by Spanish colonialism and American influence. It likewise also features Chinese, Korean, and Japanese enclaves, giving it a unique, rich character that its visitors can enjoy. As such, you can walk its streets and hear different local and international languages being spoken at the same time.
Likewise, the Metro is an economic powerhouse with many big companies headquartered there, including:
- SM Supermalls – a chain of shopping malls with 79 branches across the country and seven that are based in China.
- San Miguel Corporation – a multinational conglomerate engaged in food and beverages, oil, energy, and real estate, among others.
- Ayala Corporation – the oldest and largest conglomerate in the Philippines with investments in real estate, telecommunications, energy, and IT, just to name a few.
- Philippine Long Distance Telephone Co. (PLDT) – a major telecommunications player with assets in fixed and wireless phone services, broadband internet, and mass media.
Within its borders are several technoparks (McKinley Hill in Bonifacio Global City, Taguig; UP-AyalaLand Technohub in Diliman, Quezon City; Eastwood City, also in Quezon City) that are home to many IT and BPO companies.
Given that the capital has a robust business and investment climate, Metro Manila was ranked number 8 in the 2021 Tholons Global Innovation Index “Top 100 Super Cities” list. This is four points lower than in the previous year’s index.
Tholons, a “global strategic consulting, digital innovation, and investment advisory group” released their study to help Fortune 500/Global 2000 companies make better business decisions. According to the report, the index “evaluates, ranks, and provides desitnation strategies to multinational corporations, countries, governments, multi-lateral agencies, analysts and investors.” They look at attributes such as the availability of talent, the level of organizational support in a location, cost and infrastructure, digital innovation, and quality of life to determine placement on the list.
Photo by M&W Studios from Pexels
- Baguio City
If you’re looking for a place to vacation in the Philippines, Baguio City is one of the most popular choices. Known as the “Summer Capital of the Philippines,” those looking to escape the heat and humidity of the tropical lowlands should come to visit the city for its cool climate and rich vegetation. It’s also an ideal location for outdoor activities like hiking, biking, and horseback riding.
Located in the Benguet province, Ilocano is the predominant language in the city, but English is also widely spoken by the population. Originating as a master-planned community for American soldiers and their families looking for a chilly mountainous retreat in the early 1900s, nowadays the city is known for being an art and culture haven, aside from its growing prominence as a top outsourcing destination in the Philippines. In fact, the Philippine Economic Zone Authority – Baguio City Economic Zone (PEZA-BCEZ) recently invited Indian investors for a visit to explore their business options in the area. Currently, the BCEZ is home to various multinational firms engaged in manufacturing, outsourcing, and information technology.
Photo by Cody McLain on Unsplash
- Angeles City/Metro Clark
Angeles City is the largest city in the province of Pampanga and has become the Central Luzon region’s center for commerce, industry, and education. Much of the city’s growth depended on the establishment of the former Clark Air Base in 1903. Once known as one of the largest American military bases outside of the continental US, much of it was devastated by the 1991 Mount Pinatubo eruption, which lead to the departure of the US forces. Years later, the site (literally) rose from the ashes with the development of the Clark Special Economic Zone, which covers portions of Angeles City and the city of Mabalacat. It was in 2006 when then President Gloria Macapagal-Arroyo—a Pampanga native herself—signed Proclamation No. 1035 placing the ecozone under PEZA jurisdiction. This opened up the area to more foreign investors who were granted financial privileges to develop the zone.
*Metro Clark is a loosely defined area that covers sections of the provinces of Pampanga (which includes Angeles City) and Tarlac. The air base and the ensuing economic zone where many of the city’s BPO firms are within.
Today, the city is thriving with an ever-growing tech industry, filled with a young and talented workforce from all over the region. Tourists alike continue to troop to the area to experience the province’s cuisine, which is well-regarded around the nation as one of the best, as well as fun annual events such as the Clark Hot Air Balloon, Food & Music Festival.
Photo by Zany Jadraque on Unsplash
- Cebu City
Cebu City is the capital of the province of Cebu, as well as the city with the largest population in the Visayas. Like Metro Manila, it is also included in the 2021 Tholons “Top 100 Super Cities” list, placing at number 52.
More popularly known as the “Queen City of the South,” it is the oldest city in the country, the first Spanish settlement in the Philippines, and where Christianity began in the Far East. Known for its historic sites such as Magellan’s Cross and celebrations like the Sinulog Festival (a religious-cultural festival to honor the Santo Niño or Child Jesus), Cebu City is a culturally rich destination that many local and foreign tourists visit year in and out. Most of the population speaks Cebuano with English as a secondary language in the city.
Economically, Cebu City has a booming tourism industry, thanks to its proximity to numerous heritage sites and beautiful natural resources. Hotels and resorts dot its shores and the city center as awe-inspiring beaches are just a hop, skip, and a jump away.
It earns its place as a globally recognized digitally innovative city, as Cebu City is known as a major business process outsourcing destination in the Visayas region. At the beginning of the 2010s, many of the big names in the BPO industry from Metro Manila expanded their operations in the area. Eventually, local BPO firms began their operations. Today, PEZA’s records show that there are over 400 IT-BPO offices in Cebu City, and as of December 2019, the industry was estimated to employ roughly 170,000 people directly. As a result, the outsourcing sector brings roughly Php 86.2 billion into the local economy each year.
Photo by Brian Kairuz on Unsplash
- Bacolod City
Bacolod City is the capital and the largest city of Negros Occidental. It is located in the Western Visayas region and is also its most populous city. Nicknamed “The City of Smiles,” Bacolod is known for its historical sites such as Spanish-era churches and ancestral houses, delicious cuisine, and the MassKara Festival where revelers all wear colorful masks and celebrate by singing and dancing in the city’s streets. In fact, the city’s nickname was derived from this festival and the warm hospitality that welcomes its visitors. Its natives, the Bacolodians, speak Hiligaynon, as well as Tagalog and English.
Like Cebu City, Bacolod City is considered an IT-BPO hub of the Visayas region. In fact, the Department of Information and Communications Technology (DICT) named the city a “Center of Excellence” for IT-BPO. Bacolod shares this honor with other top outsourcing destinations in the country, such as Metro Manila, Metro Clark, Cebu City, Iloilo City, and Davao City. Likewise, the city was recognized as a “Business-Friendly LGU (Local Government Unit)” by the Philippine Chamber of Commerce and Industry in 2018—the only one recognized outside of Metro Manila. Beyond these titles, Bacolod also wins in environmental sustainability as a clean and green city, making it a top choice not just for business investors but also for property investors looking for a safe and progressive city to build their homes.
Photo by Kysha Porras on Unsplash
- Santa Rosa, Laguna
Once known as a weekend getaway for Metro Manila residents who want to visit Enchanted Kingdom—a popular theme park south of the country’s capital—the city eventually became known as a top location for IT-BPO ecozones and as the site of various manufacturing factories for the country’s biggest brands (San Miguel Brewery, Monde Nissin). Not only that, but it is also known as the “Detroit of the Philippines” for the numerous car manufacturing plants and dealerships found there, including Mitsubishi, Nissan, and Toyota.
A Metro Manila suburb, Santa Rosa is a fairly new city compared to the ones on this list, having achieved its cityhood only in 2004. It is part of the CALABARZON (Cavite, Laguna, Batangas, Rizal, and Quezon) region, an area formerly known as the Southern Tagalog region.
Originally a sleepy commuter town for people working in NCR, it saw its economy boom in such an impressively short time. In just three years from its transformation into a city, Santa Rosa emerged as a major business hub in the region from its many economic successes. In 2007, the city income breached the one billion mark in earnings, which is a huge feat amongst Philippine LGUs. Much of this success was the result of the contributions by the various industrial and economic zones which serve as homes to IT-BPO firms and the manufacturers that have their plants in the city.
Image by Jason de los Santos from Pixabay
- Davao City
A major business hub located on the second-largest island of the Philippines, Davao City is the largest city in Mindanao, the most populous in the region, and the third most populous in the country overall. Known as a premiere culinary destination—the city is nicknamed as the “Durian Capital” and “Chocolate Capital” of the Philippines after all—it is also a top outsourcing destination in the Southern Philippines. Tourists also flock to Davao City to check out the beautiful beach resorts in nearby Samal Island and enjoy the outdoor adventures they offer.
Its natives, the Dabawenyos, speak Cebuano as well as English for business and as a medium of instruction in schools. Other inhabitants include the different Moro groups who came from nearby provinces, as well as foreign communities (Davao City has its own Chinatown within its borders) who made this city their home
Recently named as the fourth most competitive city in the highly urbanized cities category last December 14, 2021, during the 9th Regional Competitiveness Summit, Davao City is a BPO hotspot that boasts a lower cost of living than its sister city Cebu City (and most other cities in the Philippines). This made the Southern city an attractive prospect for foreign investors from the IT-BPO industry. Local real estate developers are likewise looking to Davao City to grow tech townships (called “iTownships”) where modern amenities with an emphasis on green solutions are enjoyed by residents, tourists, and office space dwellers alike.
- Iloilo City
Iloilo City is the capital of the province of Iloilo and is considered the regional center of the Western Visayas region. It is located on the southeastern coast of Panay Island, facing the Iloilo Strait and Guimaras Island from its shores.
Home to Spanish-era heritage homes and a burgeoning art scene, Iloilo City is the destination of choice for tourists looking to immerse themselves in culture and history. But for those who would rather enjoy white sand beaches and palm trees, Islas de Gigantes is just within reach.
Beyond its reputation as a popular tourist destination, Iloilo City is a major hub for trade, finance, hospitality, education, information technology, and business process outsourcing in the Western Visayas. The popular fast-food chain Mang Inasal (“Mr. Barbecue” in the province’s local Hiligaynon language) hails from here.
This economic boom is spurred by a local government supportive of these economic investments through initiatives such as income tax holidays and free issuance of licenses and permits. In particular, those who operate under the six PEZA-registered ecozones get to enjoy these perks. In return, they earned as much as US$250 million in 2021 alone.
Outsourcing Destinations in the Philippines: Conclusion
The Philippines is a great place to do business. It has become one of the most preferred destinations for outsourcing in Asia, with a large number of expatriates working there.
There are many reasons why this is so. Filipinos are known for being diligent and hardworking, with a young employable population that’s highly proficient in the English language. Another reason why companies choose the Philippines as their outsourcing hub is that it offers great benefits such as tax incentives and visa exemptions for employees, including their family members, who have been hired by foreign companies.
We hope this article has helped you to better understand the top outsourcing destinations in the Philippines, their strengths as well as their potential for outsourcing.
Connext Global Solutions helps companies build custom, dedicated support teams in the Philippines. Learn more about Connext Global Solutions.
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