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Offshore Business Process Outsourcing Firms in the Philippines
What is Offshoring?
Offshore business process outsourcing is the movement of certain business dealings of a particular company from a certain area to another area, from one country to another, in particular. It involves any operations like manufacture and construction, production and fabrication or may either be services like editing, transcribing and the like.
What is the Reason why Companies do Offshoring?
The transfer or the relocation of certain business processes is done due to the main reason that the company wants to cut costs. Usually, they relocate in areas where there is lower operational cost.
Difference Between Offshoring and Outsourcing:
Oftentimes, these two terms are mistakenly or interchangeably used. Offshoring differs from outsourcing. Offshoring would be the movement of a particular unit of a firm, and its processes of course, from one place to another, whereas outsourcing is the transfer or the entrusting of some in-house business operations to another company whether domestic or abroad.
Offshoring in the Philippines
The offshoring business in the Philippines was introduced because of the closing of several industrial units and firms in America in the seventies. This has brought the US government a massive structural transformation since then. Due to this reason, they began to establish new factory units in different parts of the world including the Philippines.
As the internet has set itself in history and as technologies have developed, not only factories were offshored, so do with the newer jobs like call centers, medical transcription etc.
Why is the Philippines a Good Choice for Offshoring?
Usually, offshoring is done to lower the operational costs of international firms, since they have a higher cost of living their own country. Due to this reason, the tendency of these firms is to relocate to lower cost areas like that of the Philippines.
The country has been very attractive for foreign investors. This is so due to the fact that it is located in a comfortable area where there is a never-ending provision of natural resources. Moreover, it is proximately neighboring the best and the premium leisure services and amenities in the world.
Reports have shown that the Philippines have been ranked second to India in terms of its workforce. This is probably due to the increasing population of Filipinos. Hence, its people have been very competitive worldwide in terms of bringing good service to other countries.
The Philippine government has been so very concerned in this area such that it has been one of the main reasons why the country is now standing-up from poverty. The offshoring business has greatly facilitated the rise of economy though.
In this aspect, most of the established offshored firms in the country together with its government, they have decided to bring their employees abroad for an intense training. Having a well-trained group of personnel has been the most desirable asset of the Philippines from then on.
Not only, that they have well-trained personnel, but also, the country is very proud of their intellectual graduates who are used to the Western style of business as most of them are good English speakers.
Statistics of Offshoring Firms in the Country
For some obvious reasons, the call center industry is the most famous and the topmost emerging firms in the country. It has launched around 105 call centers with a total of 112,000 full-time workers. In 2005, it was estimated have revenues of 1.6 billion dollars with a seventy-five percent growth rate.
The next fast emerging firm is the software development. It has 300 developed companies nationwide. It houses 12,000 IT professionals. In 2005, its revenues were estimated to be 204 million dollars with a twenty percent growth rate.
Some firms to have developed in the Philippines are: Medical Transcription, Creative Animation Development or Engineering Design, Real Estate, Telecommunications and many more.
The rise of these firms has been proven to help the country from the verge of total economic loss.
Uses of Offshoring Firms in the Philippines
Offshoring firms are generally used by individuals and parties to safeguard resources as well as to alleviate or hold over dues and taxes.
Different kinds of offshoring firms indicate different purposes. However, whichever company it may be, their reason for offshoring would be the same. That is to reduce taxations and to shelter international financial resources. Some of the offshore firms would be: Intellectual Property Holdings, Subsidiary Holdings and the Real Estate Holdings Companies. Each of these holding firms has different kinds of uses depending on the needs of their own consumers.
