In recent years, the outsourcing industry in the Philippines has become one of the fastest-growing sectors in the country and has risen to a leading position globally. In 2010, the revenue of the Philippine outsourcing industry grew by 26% year-on-year, totaling $8.9 billion; the number of employees in the outsourcing industry reached 525,000, with an annual growth rate of 24%.
There are two main factors contributing to the success of the Philippine outsourcing industry: first, the advantages of talent and industry development; second, policy advantages. The Philippines currently has 29 million skilled workers, including 70,000 in the information industry and computer professionals, 35,000 engineers, 100,000 certified public accountants, and 100,000 business management personnel. 72% of the population can speak English fluently, and skilled workers are familiar with internationally advanced professional knowledge and user service standards, possessing good business capabilities and professional ethics. According to a survey of the global outsourcing market, the English expression and comprehension abilities of Philippine service personnel are even superior to those of India and Ireland. Additionally, the average labor cost in the Philippines is $234 per month, lower than that of most Asian countries.
At the same time, the guidance, encouragement, and support from the Philippine government have played a significant role in promoting the industry. The Philippine government has specifically launched the "Investment Priority Plan," incorporating the outsourcing industry as a priority development sector and introducing a series of specific preferential measures.
First, companies engaged in outsourcing in the Philippines can apply to the government for economic zone preferential policies in any region or business location. On one hand, there are financial incentives. Foreign companies conducting outsourcing business in economic zones enjoy a tax exemption for the first six years, and after the exemption period, they can continue to enjoy preferential treatment, such as paying only 5% business tax. Companies can also import special equipment and materials tax-free, be exempt from dock usage fees, and be exempt from 12% value-added tax on goods and services purchased locally. On the other hand, there are non-financial incentives. Relevant companies can use shipping equipment without restrictions, and when importing equipment or materials needed for business, they can enjoy customs facilitation. In terms of talent introduction, foreign citizens can work in management, technical, and consulting positions in outsourcing companies for up to five years, with foreign talent in executive positions eligible for longer residence visas.
Second, legislation has been enacted to protect intellectual property rights and data security in the outsourcing sector. The Philippine government has successively issued the "Intellectual Property Law" and the "Data Security and Privacy Law," using legal means to support the development of outsourcing companies.
Third, there is a strong emphasis on cultivating local talent for the outsourcing industry. To enhance the competitiveness of local talent, the Philippine government has allocated special funds to establish the "Applied Talent Training Fund" for outsourcing, providing training vouchers to job seekers who do not meet company hiring standards, offering various skills training for free, and promising that the personal income tax paid by those employed after training will be used to replenish the training fund. The Philippine government has allocated funds to this fund multiple times, each time amounting to $10 million. In 2007, the Philippine government also allocated $8 million specifically for 70,000 call center positions and other business process outsourcing workers.
Finally, there is a strong push to expand overseas markets. In addition to actively guiding, encouraging, and supporting the development of the outsourcing industry domestically, the Philippine government has also adopted proactive promotional strategies to showcase its achievements and advantages in the outsourcing industry globally. For example, in 2010, the Philippine Trade and Investment Center and the Philippine Outsourcing Industry Council jointly organized several events in the United States to promote the development achievements of its outsourcing industry to American companies. Currently, the majority of companies investing in outsourcing in the Philippines come from the United States, Japan, South Korea, and Europe, with the United States accounting for 60% to 70% of the Philippine outsourcing market.
The Philippines is confident about the future development prospects of its outsourcing industry. According to relevant agencies, it is predicted that by 2016, the annual revenue of the Philippine information technology outsourcing industry will reach $25 billion, accounting for 10% of the global market share. With the achievement of this goal, the number of employees in this industry will reach 1.3 million, and the industry's output value will account for 9% of the gross domestic product.
Philippine mining leaders claim that the Philippine mining industry will receive nearly $90 billion in Chinese investment over the next five years.
According to Philippine media reports, during President Aquino's visit to China, he facilitated the signing of four major contracts between Philippine and Chinese mining companies. An industry leader stated that this means the Philippine mineral industry will receive up to $14 billion (approximately 89.4 billion yuan) in Chinese investment over the next five years.
The Philippine Daily Inquirer reported on September 7 that Philip Romualdez, chairman of the Philippine Mining Association, stated at an event in Manila that during Aquino's visit to China, at least four mining contracts were signed with Chinese companies, including nickel mining. As many mining projects will transition from the initial stage to final implementation between 2011 and 2016, this will bring substantial investment to the Philippine mineral industry.
"If all projects come to fruition, we will receive $14 billion in mining investment from this year to 2016. We have already seen an increase in Chinese investment this year, including in nickel mining," Romualdez said. He also mentioned that Aquino led the management of 15 mining companies during his visit to China, which "reestablished the confidence of the Chinese government and enterprises in the Philippine mining industry and in the Philippine government's full support for national mining."
The Philippine central bank shifts its policy focus to maintaining economic growth.
According to the Philippine Business World on September 9, the Monetary Board of the Philippines decided to keep the key interest rate unchanged during its meeting on September 8, in line with market expectations. The central bank has lowered its inflation rate forecast for this year from 4.7% to 4.46%, and for 2012 from 3.74% to 3.4%, predicting an inflation rate of 3.23% for 2013, all within the central bank's target range of 3-5%.
Philippine central bank deputy governor Diokno stated that as of July, the central bank has adjusted interest rates or reserve requirements four times, and the market needs time to digest these policy changes. Currently, the central bank's monetary policy remains unchanged; considering the slow economic growth in the first half of the year, the central bank may implement an accommodative monetary policy, but there are no specific plans at present. In August, the inflation rate in the Philippines slowed to 4.3%, and the GDP growth rate in the second quarter significantly slowed to 3.4%.
