Offshore Software Development (Costa Rica vs Philippines)—5 Reasons to Choose the Philippines

Last Updated on 2024-10-11

The global race for tech talent is more intense than ever before.

Silicon Valley and major tech hubs need more skilled software developers and IT professionals.

This supply-demand mismatch has pushed companies to look beyond their borders for offshore software development solutions. 

Two countries often mentioned as top offshoring destinations are Costa Rica and the Philippines. Both offer significant cost savings compared to hiring locally.

But which nation provides the bigger advantages for your offshoring needs? Let’s examine the key factors.

Offshore Software Development in Costa Rica and the Philippines

Costa Rica and the Philippines have emerged as popular destinations for offshore software development. This is due to their stable political and economic environments, well-educated workforces, and strategic locations. 

Costa Rica shares the same time zone as the central United States. It facilitates seamless communication with clients. Meanwhile, the Philippines significantly overlaps with US time zones.

Also, both countries have invested in infrastructure and offer government incentives to attract foreign technology investments.

But which should you choose for your offshore development project?

Comparing Offshoring between the Philippines Over Costa Rica

While Costa Rica is an increasingly popular offshoring destination, there are several areas where the Philippines has distinct advantages:

Category	Costa Rica	Philippines
Cost of Offshoring	– Average offshore developer rate of $40-60 per hour	– A talented offshore software developer’s rate ranges from $25 to $45 per hour
Talent Pool	– High literacy rate and a well-educated population – Strong focus on technology education	– University of the Philippines alone graduates over 3,000 IT and computer science students annually – The Philippines produces far more tech graduates annually
Language Proficiency	– English is commonly used as a business language – English proficiency of 25%	– The Philippines has one of the highest English proficiency rates of any nation where English is not the main official language (only behind Singapore and the Netherlands)
IT Infrastructure	– A relatively well-developed infrastructure – Average download speed of around 50 Mbps as of 2021	– Well-developed and robust internet connectivity, especially in major tech hubs like Manila and Cebu
Government Support and Incentives	– Offers various incentives, such as tax exemptions and free trade zone benefits	– Has a longer history of prioritizing IT-BPO services industry – Generous tax incentives – Economic zones – Government-funded training programs
IP Protection and Security	– Has a legal framework in place for protecting intellectual property (IP) rights	– Solid legal system emphasizing the protection of intellectual property rights – Follows stringent security measures to manage and handle sensitive data
Potential Challenges	– Increased competition for the skilled but limited number of professionals, leading to potential challenges in retaining top talent

Cultural compatibility

The following is a comparison of offshore software development in the Philippines with Costa Rica:

Category	Costa Rica	Philippines
Work Ethics	– Exemplary work ethic, but may prioritize work-life balance over extra hours – Respectful of authority; may hesitate to challenge the status quo – Emphasis on process can sometimes limit agility	– Exceptional dedication; willing to go the extra mile – Proactive problem-solvers; take ownership of tasks – Adaptable to changing requirements and circumstances
Communication Style	– Polite and friendly communication; may avoid direct criticism – Good English skills; some accent variation – Emphasis on building rapport can impact productivity	– Clear, concise, and respectful communication – Excellent English proficiency; neutral accent – Balances relationship-building with a focus on results
Time Zone Differences	– Same or 1 hour ahead of US Central Time; enables real-time collaboration – Minimal overlap with European and Asian business hours	– 12 hours ahead of US; ideal for overnight project progression – Some workday overlap with Europe and Asia; supports global coordination

Why Companies Choose the Philippines for Offshoring

The Philippines has emerged as a leading offshoring hub for these important reasons:

1. Lower Developer Cost: Compared to places like the US or Western Europe, the Philippines’ low living costs translate into major savings for businesses offshoring software development work. For many firms, cost is the primary driver when considering offshoring.
2. Large Skilled Workforce: The Philippines’ large population and strong education system produce a vast pool of STEM graduates. Fields like computer science and engineering provide companies with skilled IT professionals to hire annually.
3. Fluency in the English Language: Thanks to decades of American influence, the Philippines’ fluency in English makes it the third-largest English-speaking country globally. This enables clear communication, which is crucial for successful offshoring.
4. Work Culture Compatibility: Software developers in the Philippines are known for their strong work ethic, result-driven, and warm communication style. Thus, it’s easier for foreign companies to build rapport and foster long-term partnerships with them.
5. Time Zone Advantage: The country’s developers can work a shift that overlaps with US business hours. This facilitates real-time collaboration, which leads to faster project turnaround times.

How Full Scale Helps Companies Succeed with Offshoring 

We’re a Kansas-based company with offshoring operations in the Philippines.

So Full Scale is perfectly positioned to connect clients with top Philippine software development talent. Some key advantages we offer include:

• A deep talent pool of thoroughly vetted developers across specialties
• Flexible pricing models 
• Easy scaling with the ability to quickly add or reduce staff as needed
• Time zone overlap to streamline communication and collaboration
• A proprietary management system like Full Scale Rocks to track projects and teams
• Guided development with training, mentoring, and quality processes

With over 300 highly-skilled offshore developers working directly for our clients, Full Scale has successfully delivered millions of hours of development work. We understand the offshore model and can help your business thrive through our unique staff augmentation solutions. 

Unlock the Potential of Offshoring in the Philippines

Costa Rica and the Philippines offer clear advantages for offshore software development over hiring domestically.

The talent scale, depth of professional experience, and supportive government policies in the Philippines give it an edge as the premier destination.

For businesses needing to quickly and affordably build out development teams, partnering with an experienced provider like Full Scale, based in the Philippines, makes smart business sense. Our company is here to help you access the talent and resources to turn your software vision into reality through our offshore expertise.

The time for offshoring to the Philippines is now.

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