Pros and Cons of Outsourcing in Pampanga vs Manila

The Philippines has become one of the most popular destinations for multinational companies to outsource their services. The relatively low cost of living, cheap labor and large workforce of English speaking college graduates continues to influence more and more investors to be apart of the ever growing Philippines BPO industry.

While there may be outsourcing companies popping up all over the country it is still Manila and Pampanga that are the most popular. The government continues to make tremendous improvements to the infrastructure in these areas and even provides tax breaks and incentives to the foreign businesses operating there.

Despite the similarities in the two cities there is still quite a difference between them and it could make the difference in choosing the best place for outsourcing. Here is a quick review of the pros and cons when it comes to talent pool, operating costs and quality of life between the top two destinations for outsourcing in the Philippines.

Talent Pool

  • Manila. With 71,000 people per square meter, Manila is the world’s most densely populated city. By pure numbers alone the city is bound to be the best option for finding the most talented Filipinos. There are more than 300 colleges in the capital city with almost 200,000 new graduates every year.
  • Pampanga. While the workforce is nowhere near as large as it is in Manila, Pampanga does have more than enough available talent. The competition for the available talent is limited which makes it quite easy to find the right person for the required position.

Operating Costs

  • Pampanga. The most popular reason for outsourcing is to reduce costs and Pampanga definitely provides the opportunity to do just that. The minimum wage is below $8 per day, office space leases for less than $8 per square meter and there are foreign business tax incentives for companies operating in Pampanga’s Clark Freeport Zone.
  • Manila. Costs in the capital city are higher than the rest of the country which is common for most places around the world. The lack of available space have risen lease rates to over $15 per square meter. While the minimum wage is just $10 per day it is very unlikely to find talent suitable for the BPO industry at that rate due to the competition willing to offer higher salaries.

Quality of Life

  • Manila. Being located in the capital city comes with a lot of benefits when it comes to quality of life. The quality of shopping malls and hotels are unmatched and the international airport gives access to any destination in the world. Everything originates in Manila and then as it proves to be popular will start to be offered in other areas of the Philippines.
  • Pampanga. Over the last 5 years Pampanga has really started to develop their infrastructure and offer most of the benefits of what could be found in Manila. The cost of living is cheaper and there are plenty of newly built western type houses and apartments. Shopping malls, business districts and places of entertainment are being developed at astronomical rates. There is even an international airport that continues to get bigger and is constantly adding more destinations.

When it comes to outsourcing in the Philippines most companies will still choose Manila over Pampanga since it is more developed. With this comes a lot of traffic and heavy saturation of office space which drives prices up. Companies looking to take advantage of the true cost savings when outsourcing should consider operating out of Pampanga.