The Business Process Outsourcing (BPO) industry is the Philippines most profitable source of income and is the number one factor of the steady growth to their economy. The success of the BPO industry can be accredited to how Filipinos culture and education are inlined with the typical jobs that are outsourced. Since the late 1990’s the Philippines has been one of the go to locations for foreign investors to setup a BPO company.
Initially these new BPO companies were only looking to occupy space in Manila’s major business hubs since they had the more downtown look with busy streets, places to dine and retail establishments. It was quickly evident that Manila was already way too saturated and the rent and labor costs would almost defeat the purpose of setting up overseas.
The last few years BPO companies have been locating to suburban areas like Pampanga to take advantage of the cheaper labor, lower real estate costs and lower overall cost of living. The recent advancements in infrastructure to Clark Freeport Zone and SM City Clark has resulted in Pampanga being the fastest growing BPO destination in the Philippines.
Why Pampanga is the Best BPO Location
- Infrastructure. Clark Development Corporation (CDC) has recently attributed $925 million dollars to complement the developments of the BPO hubs New Clark City, Clark Global City and Clark International Airport. This includes additional roads, entertainment complexes, public transportation additions and improvements to all of the freeports utility services.
- Workforce. The number of BPO workers in Pampanga continues to steadily increase at an average rate of 18% each of the last 5 years. Pampanga has an English literacy rate of 94% and more than 60% of their college graduates have degrees in Business Administration or Information Technology type fields which makes the labor pool ideal for BPO companies looking to hire. Typical employment wages are about half of what they are in Manila.
- Real Estate. Pampanga is best known for its state-of-the-art yet affordable office spaces that are readily available. BPO companies looking to get their foot in the door can rent a turnkey fully equipped office for less than $500 per month. Completed buildings can be leased at around $12 per square meter which is definitely very cost-effective considering buildings in Manila’s BPO hubs are going for about $20 per square meter.
- Tax Benefits. Foreign-owned businesses are granted fiscal and non-fiscal incentives from the Philippines government. These tax breaks are imposed on income taxes, import duties, value-added tax and exempt from the local fees and taxes from the local government. Some of these tax incentives were recently removed for foreign businesses located in Manila.
With so many global investors looking to start their expansion opportunities outside of congested Metro Manila it was just a matter of time until a single location would be the most attractive. With its modern infrastructures and competitive labour pools, Pampanga is now the fastest growing BPO destination in the Philippines.