BPO Philippines: The Digital Economy Drives Growth

Even before the COVID-19 pandemic, the eCommerce sector in the UK was huge. In 2019, online sales totalled nearly £700 billion in the UK. This figure was expected to grow, both because of overall economic growth but also as people’s preferences and habits changed. This affected not just traditional retail but also other sectors that had traditionally been based around high street offerings.

COVID-19 has accelerated the shift to electronic business. Perhaps the most notable has been in retail, where non-essential retail has been closed for long periods, forcing people to use online alternatives. However, the trends have also been felt in other sectors where the high street still dominated, like finance and healthcare.

Although the UK has a strong fintech sector, COVID-19 has pushed it to the forefront. People are naturally turning to online-only offers in areas like banking and even insurance, where they had previously used more traditional models like brick-and-mortar banks or brokerages. Even healthcare has seen widespread adoption of online options. In a nation where the in-person visit to a GP was at the heart of the healthcare experience, many people now expect a phone or video consultation and for their prescription to be sent direct to a pharmacist for delivery.

This growth has also meant that the Business Process Outsourcing (BPO) industry has seen an increase in demand. BPO companies in the Philippines have seen the growth in the digital economy, resulting in more and more calls not just to their contact centres but also enquiries about outsourcing to them.

The BPO sector in the Philippines is world class, having surpassed India as the top destination for contact centres. Over 1.2 million Filipinos work in BPOs, and the industry contributes over £20 billion a year to the national economy, all while helping clients keep costs low and offering top-quality services.

The sector has not been entirely immune to the pandemic. Many businesses hurt by the economic impact of COVID-19 scaled down, or even totally withdrew, their outsourced services. At the same time, BPO providers in the Philippines had to manage the pandemic themselves, ensuring they could still provide services while keeping their staff safe. They now face the challenge of having to respond to growing demand.

The BPO industry in the Philippines is, however, well-placed to meet the increased demand, despite the difficulties created by the pandemic. The large, experienced, and educated workforce means that BPO companies can easily scale to fulfil new projects or contracts. Long-term investment has meant that premier BPO providers have been able to adapt to new ways of working relatively easily, without sacrificing quality or security.

After two decades of rapid growth, the BPO sector in the Philippines had a difficult start to 2020. But after the first half of the year, as the situation settled, they have moved back into a more comfortable position to address the sector’s growth, although perhaps not as quickly as before. Ralf Ellspermann, CEO of Manila-based PITON-Global, highlights the unusual circumstances of the year: “The last twelve months have been crazy. I’ve never experienced anything like it in over twenty years in the Philippine outsourcing industry. But despite the challenges, we have seen an exponential increase in enquiries coming from companies that are operating and thriving in the digital space.”

BPO companies in the Philippines have several advantages over other outsourcing options. For many, the most important is the cost savings—labour costs in the Philippines are around 60% lower than the UK. They can also offer premium services, as the Filipino workforce is highly educated and has a high level of English proficiency, often with little or no discernible accent. This is a significant benefit when the main cause of complaints about outsourcing are difficulties in communications.

Ongoing investment has also helped the sector overcome some pandemic-related challenges. Leading Philippine contact centres have invested heavily in AI. While AI tools can sometimes handle customer service issues on their own, they are more frequently used to assist agents, offering them prompts and solutions. This electronic assistance reduces cueing and call handling times and increases customer satisfaction, meaning agents can work more efficiently.

“There are lots of explanations behind the success of the BPO industry in the Philippines,” says Ellspermann, “but talking to our UK-based clients, the combination of savings and excellent customer service is the key reason we are their preferred BPO partner in the Philippines.”