UPDATES ON THE PHILIPPINE CALL CENTER

Topics: Outsourcing, Call center industry in the Philippines, Call centre Pages: 33 (8600 words) Published: December 1, 2014
UPDATES ON THE PHILIPPINE CALL CENTER INDUSTRY:
THE ISSUE OF SUSTAINABILITY

Aileen S. Alava
Assistant Professor
University of the Philippines, Diliman
College of Business Administration

Abstract
Facing high expectations as the newest “sunshine industry”, the call center industry in the Philippines appears to have dimmer prospects in the coming years. Having experienced rapid growth in the past, the industry is expected to disappoint a bit as analysts observe a slowdown in the industry’s growth from 2003 to 2005. Contrary to the fears that demand will be lost to neighboring competitors India and China, the industry may be losing speed not because of a shrinking market but because of decreased labor supply. Various reasons have been offered to explain why the slowdown is expected. Aside from manpower supply, local information and communications technology (ICT) infrastructure has also been identified as a possible constraint limiting the industry from fully achieving its potential. This paper will provide industry player and market information, as well as updates on how the industry’s participants are seeking to address these challenges.

The call center industry is heralded as the newest sunshine industry in the country, earning around US$1 billion in 2005 alone. The industry currently provides employment to around 96,000 Filipinos as call center agents. Employment for this sector has more than doubled every year, starting with 1,500 seats in 2000 and finishing with around 60,000 seats in 2005. The call center industry is part of the outsourcing industry, which also includes medical transcription, IT support, animation, software development, financial accounting and payroll processing services. Outsourcing is an outgrowth of the success of a deregulated telecommunications industry. Intense competition spurred massive

investment

in

technology

and

manpower

skill

among

Philippine

telecommunications service providers, leading to services that were better in quality, lower in price, and more advanced in technology—in some cases, more so than other

-1-

countries, making the Philippines, from a global standpoint, a relatively more attractive destination for telecoms-centric, IT-based services such as call center operations. The Board of Investments (BOI) reports that 2005 revenues in outsourcing amounted to US$2.49 billion, and projects revenues to jump upwards 52% to reach US$3.79 billion this year. The Business Process Association of the Philippines (BPAP) and the Commission on Information and Communications Technology (CICT) have jointly released forecasts predicting that there will be 103,000 new outsourcing jobs this year, a 44% increase from the number of new outsourcing jobs in 2005 of about 81,000. New jobs created last year, meanwhile, represented a 53% increase from jobs generated in 2004, about 53,000 new jobs. Call centers are expected to lead in employment generation in the outsourcing sector, much in the same way it has led investments for the last five years.

The Call Center
A call center is a customer-oriented business operation handling multiple types of customer-oriented functions such as marketing, selling and servicing, through multiple channels of customer interaction such as electronic mail, the World Wide Web, electronic messaging, voice messaging, fax messaging, and traditional mail. Call centers serve various stakeholders of an organization: from prospects to customers, suppliers to competitors, as well as distributors, partners, and employees. The term “call center” is used as a collective term to refer to these operations for the reason that the primary means of contact facilitated by these businesses are through telephone calls. Call centers handle both inbound and outbound calls. Inbound calls are initiated by the customer and the call center’s duty is to respond to whatever requests for information or service the customer has. Inbound calls include: ...

References: Computer World. March 7, 2005.
Frost and Sullivan. Assessment of the Asia Pacific Contact Center Markets. December
20, 2005.
McDougall, P. Automation Takes Toll on Offshore Workers. Information Week, January
26, 2004.
Rubio, J. Contact centers expand growth for 2006. Computer World. January 30, 2006.
Rubio, J. RP aims for $10B in e-service revenues. Computer World, January 26, 2006
Securities and Exchange Commission
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