Filipinos challenge India

BPO offshoring may be threatened by Philippines

Philippines is taking aggressive strides to catch up with India as the desired destination in BPO offshoring. According to a study by neoIT, an offshore advisory and management firm, Philippines is preparing eight other Filipino cities besides Manila to foster this growth in the country.

This country is developing Cebu, Davao, Clark, Cagayan de Oro, Illoilo, Bacalod, Baguio and Dumaguete and is making these destinations 'outsource ready' with a diverse portfolio of specialisations.

In India, centres like Gurgaon, Bangalore, Chennai, Hyderabad and Pune have been developed and now firms are being urged to branch out into second tier cities like Mysore, Mangalore and Coimbatore. The Phillipines seems to be adopting the same route.

According to the study, Metro Manila has long dominated the country's other cities as an outsourcing destination. Driven by a need for broad-based growth, the Philippines government has assumed the task of developing alternative, smaller cities in the Philippines and is putting a slew of catalysts like infrastructure, finance and people.

The report adds that though Manila is the most suitable city for offshoring, increasing costs of operation and competitive pressures on labour supply will continue to reduce the city's attractiveness.

"Cebu, Davao and Clark are emerging as attractive outsourcing locations, with competent labour pools, lower costs, strong government support and fast-improving technical infrastructure," the report highlighted.

The increasingly competitive environment in Manila has also led to some outsourcing organisations to consider alternative locations that still have room to grow.

"Having caught wind of that trend, other local governments have begun promoting their cities along with the national government to establish new economic and technology centres in multiple cities throughout the country as an additional incentive for ITO and BPO suppliers," the report noted.