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How the Outsourcing Industry Disrupted the Philippine Middle Class

One of the Philippines’ major economic drivers is the Business Process Outsourcing (BPO) industry, which provides 1.3 million jobs and $25 billion in revenue. In 2017, the industry is expected to exceed remittances, the country’s traditional source of foreign exchange, with more foreign revenue. The World Bank estimates that by 2020 it could provide 2.6 million jobs and revenues of at least $50 million.

Within the past 15 years the industry has become a viable source of livelihood for Filipinos. The proliferation of companies outsourcing different types of functions has helped reduce the urgency for Filipinos to fly overseas in search of high-paying jobs, essentially expanding the middle class. Outsourcing in the Philippines started to gain traction after the 2009 Global Financial Crisis as American and European banks under regulatory scrutiny and cost pressure began offshoring complex functions such as portfolio management, fraud management, and financial modelling. And as The Philippines has a wide pool of English-proficient college graduates, it has been the top location for offshoring work.

The industry has since then created a financially inclusive middle class. It has enabled their purchasing power that property and auto sales in the country has spiked. In 2016, auto sales hiked 24.5% to 292,502 just as when neighboring countries such as Malaysia’s auto sales dropped 14%.

There are thousands of success stories from people who work in the BPO industry—from people who lived in rural areas making it as a call center agent in the city; employees who have been able to fund the purchase of property and construction of a house for their families; or people who have been able to achieve unprecedented career growth regionally and internationally.

As the majority of college graduates across the Philippines are proficient in the English language, BPO companies have expanded into the provinces such as Iloilo, Cebu, Davao, and Laguna. Today there are about 800 call centre companies in the Philippines, contributing 10% to the country’s GDP.

But the Philippines is now more than a capital for call centers and customer service. It’s a hub for outsourcing complex, high-level functions such as bookkeeping, graphic design, social media, lead generation, virtual administration, payroll management, and more. Flat Planet, for example, engages with companies by connecting them with experienced and knowledgeable professionals who are able to make impactful changes for their businesses by creating efficiencies that positively affect their growth.

The BPO industry has given the Philippines new opportunities, and a new set of aspirations. It has given hundreds of thousands of people access to a comfortable life with dignity, so that they can focus on the other important aspects in their lives in a way previous generations have not been able to. With the industry expected to grow more in 2017, the Philippine economy and its people will increasingly be empowered for years to come.

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