An Analysis of the Philippine Business Process Outsourcing Industry

Publication | March 2007

This paper provides an analysis of the business process outsourcing industry in the Philippines and discusses constraints on the industry's growth.

This paper provides a profile of the Philippine business process outsourcing (BPO) sector; makes country comparisons with India and other BPO providers; and summarizes the results of an input–output analysis of the Philippine BPO industry's intersectoral linkages and its potential impact on compensation and employment.

The Philippine BPO sector's growth is largely driven by the contact center subsector due to its large share in total BPO employment and revenues, as well as by government support. The input–output linkage analysis shows that the BPO industry is not a key sector in terms of stimulating production in other sectors of the Philippine economy. However, growth in the sector's revenues can have a significant impact on compensation and employment. An increase in the sector's revenues will generate a considerable increase in the sector's total wage bill and in that of the other sectors.

If appropriate policies are enacted and with improvements in human capital, it is estimated that the Philippine BPO sector may become an important employment-generating sector. The sector can provide 7%–11% of the new jobs for the labor force entrants between 2007 and 2010. It is also estimated that the BPO total workforce size will reach 500,000 to 600,000 in 2010, which is considerable for a single economic activity.

Contents 

  • Abstract
  • Introduction
  • Industry Status
  • India's Experience: Lessons for the Philippines
  • Cross-country Comparisons
  • Input-Output Analysis of the BPO Sector
  • Employment Dynamics in the BPO Sector
  • Conclusions
  • Technical Appendix
  • References

Additional Details

Authors
Type
Series
Subjects
  • Economics
  • Industry and trade
Countries
  • Philippines
SKU
  • 030707
ISSN
  • 1655-5252 (Print)

Related

Subscribe to our monthly digest of latest ADB publications.

Follow ADB Publications on social media.