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Why Offshore to Philippines
2019-01-11 /

Why You Should Offshore Business to the Philippines

A lot of countries brought their nation as the top choice in offshoring. The Philippines is one of the countries considered as an excellent offshore outsourcing option. Currently, the Philippines is living to its title, yet there are still doubts about the capabilities of Filipino workers. With this article, let’s take talk about why you should offshore your software business to the Philippines.

New Developments in the Country Benefit Foreign Investors

The Philippines has made a name for itself in the business world for having the fastest-growing economy in Southeast Asia. Its GDP grew by an average of 6.7 percent in the first three quarters of 2017 and is expected to sustain such robust momentum in the next three years.

The country’s development is primarily driven by foreign investments. According to the World Investment Report 2018, the Philippines’ investment flow hit an all-time high at USD 9.5 billion, surpassing the annual target of USD 8 billion set by the Central Bank of the Philippines.

Top investors are from Japan, US, and Singapore. The US companies, in particular, outsource large parts of their operations to the local talent pool, because of its English-speaking and well-skilled workforce. The government has successfully implemented an integrated support system to prop up the enterprise outsourcing industry.

More and more projects are being fast-tracked each year. Improvements in infrastructure, higher quality education, streamlined bureaucracy, and better tax incentives make it more convenient for foreign investors to establish their business. If you’re planning to offshore business in the Philippines, here are some of the great news you can look forward to in the next few years: 

The Rise of New TELCO Prompts Improvement in Internet Infrastructure

The Philippines has lagged behind its neighbors in terms of internet speed and reliability; fortunately, a promising new service provider aims to change that. Last November, Mislatel Consortium officially gained approval from the government to become the third major telecommunications player.

They plan to start operations in the second quarter of 2019. Mislatel promises to provide 27 megabits per second of internet speed in its first year of operation and if successfully executed, it will be thrice the internet speed provided by the current available TELCOs.

With Mislatel seeking to provide faster and cheaper internet, it challenges the two other incumbents Globe Telecom and PLDT-Smart to improve their current services. The competitive market will spur better offers and service quality from Internet providers which will greatly benefit many industries, especially the business process outsourcing sector. The industry heavily relies on a fast internet connection to fulfill their daily operations and maintain their network overseas.

With faster internet, it will be easier for you to establish and manage your offshore business. You can look forward to a more efficient and affordable internet set-up and faster internet speed to run your daily routines.

10-year Basic Education Program

The successful implementation of the K12 curriculum equips the new batch of graduates with more skills and experience before they join the workforce. The Philippines used to be the only country in Asia and one of the three countries in the world that had a 10-year basic education program until the Government decided to change it in 2013.

The primary aim of the additional two years in high school is to prepare students for further studies, employment, and entrepreneurship. With the new curriculum, senior high school students can specialize in a field that they are good at and interested in. Senior high students will receive optimum workplace exposure related to their field and specialization through work immersion in the office setting so they will be more prepared to enter the labor force.  

The enhancement of basic education paves the way for a new batch of graduates who are workforce-ready and equipped with the right set of skills, a mature mindset, and experience.  

Reformed Tax Law Favors BPO Companies

The Philippines employs over 1.15 million people in the BPO industry and is expected to capture an even higher share of employment in the global BPO market in the next four years. The growth of its BPO sector has prompted changes to local policies regulating foreign businesses.

Among the changes is the rationalization of tax incentives offered to qualified international firms to pay lower or zero tax rates when they employ more people, provide additional training and career opportunities to staff, buy their resources locally and reinvest their profits. This tax incentive is included in Package 2 of the comprehensive tax reform program which aims to reduce the corporate income tax (CIT) and modernize the fiscal incentives system.

A lower CIT will drastically cut down your expenses when you’re starting your business. You can naturally meet the qualifications for these incentives when you’re growing your company in the country since it would require a good number of people to manage and maintain it.

Labor-intensive types of business have a good advantage when it comes to acquiring these tax incentives. Furthermore, these requirements will also benefit your company’s reputation in the local market, helping you build a good name in the industry.

With improvements in education quality and infrastructures, and with proactive and long-term support from the government, the country increases its appeal as an ideal offshoring destination. These new developments are already in effect and a lot more are expected to be implemented in 2019. It’s the best time to offshore your company while the Philippines, with its continued economic growth, is at its peak.

How the Offshore Business Works

Offshoring Software Business to Philippines

The process of offshoring business, in general, can be challenging and complicated. The rules differ in each offshoring destination. The Philippines, in particular, has a complex regulatory system that would require quite a lot of time and energy to study. You also need to weigh in whether or not offshoring is the most ideal strategy for your business. Your best option is to tap into a company that specializes in offshoring in the Philippines.

Listen to Episode 24 of the Startup Hustle – Offshoring and Matt Goes to Cebu

Full Scale has been offshoring talent in the Philippines for years and has even branched out to other places in the globe to run its operations. The company offers a wide variety of robust and scalable web development services, Illustration services, business consultation, content writing, and search engine optimization —all strategically designed to improve your business operations. We can connect you to the right people and help you offshore your business properly to the Philippines. Contact us and learn more about our services today!

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