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Outsourcing business booms in the Philippines

Posted March 19, 2008

Manila - Night becomes day at Eastwood Cyberpark in the Philippines capital of Manila. Although it is 2:30 am, the streets are crowded with people. Cafes and fast food restaurants are doing brisk business. A group of young people are laughing about a joke. Office towers soar into the night sky, their windows illuminated.

Eastwood Cyberpark is the workplace of thousands of outsourcing consultants servicing clients at the other side of the world.

The district is one of many outsourcing centres that are currently mushrooming all over the Philippines.

It's lunch time in Canada, and Mrs Phelbs just dialed the help line of computer manufacturer Toshiba.

"This is Michelle, how may I assist you?" the young consultant chirps into her phone.

Jobs at the call centre are much sought after. A beginner can earn as much as 16,000 pesos (392 dollars) per month. In contrast, government officials with decades-long experience make only 10,000 to 12,000 pesos.

The outsourcing business is booming in the Philippines. Last year it generated some 4.9 billion dollars (3.2 billion euros) in revenue through 320,000 employees.

This may still seem very little compared to India, which has a 30-per cent share of the worldwide business and generates more than 30 billion dollars annually.

But Oscar Sanez, president of the local outsourcing association BPA, estimates that business will increase by 40 per cent this year and provide an additional 200,000 jobs.

The Philippines is aiming to achieve a 10-per-cent global market share by 2010, he says.

The Toshiba hotline is operated by Siemens IT Solutions and Services company.

"Seven hundred and fifty employees, 600,000 phone calls per month," its boss, Sandeep Abraham, sums it up.

Abraham is an Indian national and hails from Bangalore, the world's outsourcing mecca. But nothing would bring him to return there, he insists.

"The Filipinos are much friendlier and more service-oriented (than their Indian counterparts)," he says.

Even Indian companies have discovered the Philippines in the meantime. WIPRO, one of the 10 largest IT companies in the world in terms of market capitalisation, just opened a call centre with 900 employees on the island of Cebu.

"Indian outsourcing agents have become a bit too arrogant," explains WIPRO boss TK Kurien about his decision.

Another company, TopDraw, produces animated cartoons for European and Canadian customers.

The production process is time-intensive and elaborate. Some 26,000 drawings are needed for a 30-minute program - ideal work to be handled in a country with low wages like the Philippines.

Individual artists earn 250 pesos per 1-second broadcast they produce, explains production manager Stella Dearing. That requires three major drawings.

One broadcast second needs another 22 frames to fill in the movement between those three drawings - a job done by "in-betweeners."

Dearing currently employs some 900 artists, who either draw the traditional way on paper or, alternatively, produce flash animation on a computer.

TopDraw produced the children's programme Eliot Kid for French television, among others.

"Business is great," asserts Dearing.

The Philippines is the world's third most populous English-speaking country and very used to Western culture after having been a US colony for some 50 years before becoming independent after World War II. English is the second official language after Tagalog.

The country produces at least 110,000 new business college graduates and 85,000 IT specialists each year.

Companies like Deutsche Bank draw on this pool. The bank currently has some accounting and back office work handled by 1,200 employees in Manila.

Other blue chip firms like Henkel, Nestle, Ericcson and Danish container shipping giant Maersk have similar services provided by Filipino employees.

The European Chamber of Commerce in Manila estimates that the European outsourcing sector is worth 20 billion euros.

"The Philippines' share of this pie is still relatively small, but we intend to change that," says Stephanie Weber of the European IT Service Center Foundation, which was established with the help of the chamber of commerce.

Christopher Boughton built the technical department of well-known UK publisher Cambridge University Press in the Philippines.

"For the same salary we spent on five people in Britain we can employ 35 here in the Philippines," he says. "We like their work attitude. They do exactly what is asked from them," he says.

by Christiane Oelbrich, dpa, March, 2008
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