Competitiveness in the IT sector -India vs. Philippines

IT Offshoring

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According to the “Contact Center Association of the Philippines,” for the first time in 2011, the Philippines has overtaken India as being a preferred offshoring location in terms of number of call center agents. In this regard, the Philippines have a few advantages to their name: the accent of Filipino call center employees is better understood by U.S. customers, and a better understanding of American culture by the Filipinos improves communication. What does this mean for India’s future as an offshoring location?

The Philippines is a former colony of the United States (1902-1946). The country is still strongly influenced by the American culture. American television series, for example, is common knowledge to most Filipinos. This familiarity with the American culture combined with their fluency in English is a reason for their higher rate of success in handling calls from American customers. A Global English study from the year 2012 placed the Philippines among the 30 countries with the largest English-speaking workforce in terms of “fluency.” (). [4]

However, not all Filipinos reach the requirements of linguistic quality required to deal with U.S. customers right away. For example, a call center employee who has been watching American movies and TV shows, reading English books and speaking English since the age of 5, lost his first call center job because he did not understand U.S. customers. It would have taken about a year of training to understand and attain the desired accent. [5]

While Filipinos earn little more than Indian call center agents, Filipino centers have better infrastructure and lower attrition rates than Indian ones; while Indian call center employees remain in the company for an average of 11 months, the comparable figure in the Philippines is 19 months [figures of 2011, see 5].

Despite the growing importance of the Philippines in Outsourcing, [especially in the field of language services] India continues to be the undisputed number one, especially in areas such as software development. The Offshoring volume to India as a whole is about 10 times higher than that of the Philippines. Moreover, Indian players in the offshoring industry are using the growth in the Philippines for their benefit: For example, “Aegis Global” from Mumbai, acquired Manila based company “People Support” (2008), which employs thousands of Filipinos. Here more info on the IT industry in India: IT Industrie: Was macht Indien so attraktiv?

[1] “6 Indian cities among top outsourcing hubs“, in: “Times Of India”, Bangalore Edition, 23.01.2014, Seite 1
[2] “2014 Tholons Top 100 Outsourcing Destinations: Regional overview”, Anfrage der Studie unter:
[3] ”A New Capital of Call Centers”, Vikas Bajaj, in: Online-Ausgabe von “The New York Times”, 25.11.2011,[Seitenabruf am 12.03.2014] [4] “Move Over India, The New Offshore Darling Is The Philippines”, Debra Maxwell Monday, 29.10.2012, in: Online-Ausgabe von “Management Today”, [Seitenabruf am 12.03.2014] [5] ” India vs the Philippines: Where is the Future of Outsourcing?”, Marvin Sanchez, in:, 12.08.2011, Download des Dokuments unter:—Where-is-the-Future-of-Outsourcing.pdf
[6] ”BPOs shun India and Philippines; rush to near and on-shore works to be closer to clients”, Jochelle Mendonca, in: Online-Ausgabe von “The Economic Times”, 07.02.2014, [Seitenabruf am 12.03.2014

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