Forecast growth of the Industry
For the next 10 years
  According to International Data Corporation, the Asia/Pacific Outsourcing Services marketplace will experience strong growth rates across all countries in the region and types of services. The Philippines has been identified as a key outsourcing provider for US companies, emerging as a specific alternative to India’s (Bangalore IT Hub), developing steadily for the last 6 years. IDC estimated that demand for outsourcing services will reach US$180 billion in 2010. Customer interaction services will account for 24% of this figure or US$43.2 billion. It is estimated that there are around 1.5 million seats in the United States that can be outsourced.
   
  The factors which will lead to strong growth in the Philippine Call Centers over the next 10 years are the following:
  Quality and Availability of Manpower
  The Philippines is a premier outsourcing hub not just because of its affordable labor force; its political, social, cultural and economic environment contribute to the creation of a high-quality manpower pool and friendly business environment for the establishment of services. The country is ranked #1 in the availability of knowledge-based jobs and workers worldwide and ranked 4th among Asian nations in labor quality, according to a survey conducted by the U.S. based Meta Group. Aside from the huge pool of productive, trainable and multi-skilled labor force, the Philippines competes in the quality of its managers and IT staff and engineers. The unique edge comes from a high level of proficiency in English (the Philippines is the 3rd largest English-speaking country in the world).
   
  Cultural Factors
  The Philippines is not only a strategically located hub for both Asian and Western operations, its culture and infrastructure support cross-cultural needs such as time or zone differentials and physical networking. The democratic and liberalized structure for investment, ownership, and the low costs in terms of lifestyle and taxes make the country an attractive spot for investments for overall cost and profit efficiencies.

Due to affinity to U.S. culture, coupled with the English language proficiency, a number of providers cited that their up-front investment in people is lower compared to major competitor countries because two entire phases were not required: (1) cross cultural training; and (2) language training.
   
  Legal protection to information and intellectual property
  Another advantage of the Philippines is its relatively better legal system. Foreign clients are more confident about the protection it will have for its information and intellectual property. Also, clients feel secured that there will be a formal conflict resolution system in place to regulate contracts and disputes. An important aspect of the legal structure must also be that it the basic principles of law are similar to that in the client country. Some other countries in the region are noted for their weak legal systems and, in particular, their weak laws governing intellectual property. China, for example, does not have strong intellectual property laws and other safeguards.
   
  Cost Comparison
  A recent study made by SGV shows that Philippines has one of the lowest agent salary in Asia. Annual average salary of agent is around US$2,828 in 2003,lower than that of Thailand, Singapore and Malaysia. However, India, at US$1,689 has still the lowest average pay.
 
Country Annual Agent Salary in US$
China 2,804
Hongkong 16,438
India 1,689
Malaysia 3,960
Philippines 2,828
Singapore 11.748
Thailand 3,949
   
 

Even considering the increase in cost brought about by telecom and travel and management expenses, operating a call center in the Philippines would result in 40% reduction in cost compared to US operations (See chart). This represents a compelling argument for U.S. companies to migrate their operations to the Philippines.

   
  Processing Cost in the US vs Processing Cost in the Philippines