Hello, This is Manila. How Can I Help You?

March 7, 2010

Last week I tried to pay my credit card bill online.  Using a different computer, the site wanted to verify my identity with a security question – “what is the name of your elementary school?”  After three failed attempts, the system locked my account, forcing me to call to re-activate.  When I called Capital One, the girl on the other end of the line spoke perfect English, though she had a slight, almost unnoticeable accent that has become very familiar to me over the last three months.  I asked where she was located, and she said Manila.

In order to get into the Philippines, you need a flight out of the country.  Back in November I booked a refundable ticket from Manila to San Francisco on United Airlines.  The other day I called up to cancel the flight and collect my cash.  The girl picked up the line and same song, second verse.  I asked if she was calling from Manila, and she confirmed – Makati, to be more specific.  “I was just in Makati for a conference,” I said.  “Yes, this is the business center of Manila, sir,” she responded.  I felt better knowing that I was dealing with a Filipino on the other end of the line.

If you call customer service for a major multi-national corporation – a bank or an airline, for example – there is a good chance you will be routed to Manila and will speak to a Filipina.  Her superior command of the English language will lead you to believe you are buying American, and her positive demeanor will leave you feeling satisfied with the interaction.  This, among other reasons, is why the Philippines has one of the fastest business process outsourcing (BPO) industries in the world.  The call center industry, in particular, which accounts for the majority of BPO in the Philippines, is highlighted in an article from the Wall Street Journal:

The Philippines’ share of the industry ?? the business of helping people rectify computer problems, pitching magazine subscriptions and other time? consuming tasks ?? has risen from virtually zero a decade ago to 15% today, the No. 2 spot, according to Dallas?based Everest Research Institute.

Meanwhile, India’s share of the global business?processing market, while growing in value, has fallen to 40% from about 80% in 2004 as the industry spreads to other parts of the world.

This shift isn’t because of a sudden aversion to India. India?based call centers still lead the industry, racking up $11 billion in revenue last year, according to the New Delhi?based National Association of Software and Services Companies, compared with the $6.8 billion earned by Philippines?based providers. India’s $29 billion?a?year sector for information?technology services dwarfs other contenders.

The BPO market generates hundreds of thousands of jobs for Filipinos, typically at much higher salaries than in other industries.  In addition, the qualifications to become a call center operator are high.  Proficiency in American-style English is a must, as is a college degree.  The next time you call to complain about your cable bill, you might be speaking to someone with a degree in mathematics, economics, or computer science.

The Philippines has one of the lowest labor costs in the world.

Labor costs here are a fraction of the U.S., and the government is becoming more business-friendly when it comes to this type of work.  The leading contender for vice-president and former secretary of the Department of Trade and Industry, Mar Roxas, introduced the Philippines to the business world in 2001:

That’s why during his time as DTI Secretary, he launched the program “Make IT Philippines”, where he brought the biggest global industry players in Business Process Outsourcing (BPO) to the country, encouraging them to build call centers and invest in Filipino talent. Ridiculed for his efforts at the start, the success of the industry, which now directly employs over 400,000 Filipinos, has vindicated Mar.

Campaign rhetoric is excessive here (not unlike anywhere else), but the point is salient.  Outsourcing seems to follow a specific trajectory.  First, a country with comparatively low labor costs offers a competitive advantage and major cost savings for labor-intensive work.  Some innovative entrepreneurs and foreign companies, with the backing of the government, open facilities to perform basic services – in this case, customer service.  The industry matures, becoming more competitive in its search for talent and more expansive in its product offerings.  Companies realize the potential in other services and branch out.  Now, companies can offshore not only customer service, but programming, accounting, and back-office work as well.  Medical transcription, for example, is a growing industry here.  Why?  Because doctors can send their recordings to an American company that will upload the recording and send it to Manila, where it will be transcribed and sent back at a fraction of the cost.  Any labor-intensive service is fair game.

At first, the major players will be international corporations.  One of the biggest call centers in the Philippines is called Convergys – a Cincinatti-based company.  But homegrown companies also come to dominate the scene, as smaller players grow larger.  The industry sees big investment dollars, and the economy grows commensurately.  As people become richer, they spend more, lifting businesses across the country.  In the case of China, the domestic market for the products it once outsourced becomes larger and larger.

Every country is unique, and I don’t know what the next ten years for the Philippine BPO industry looks like.  But it is good to see my adopted home country becoming one of the dominant players in an estimated $180 billion sector.

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4 Responses to Hello, This is Manila. How Can I Help You?

  1. Liz on March 8, 2010 at 8:13 am

    Oh so this was the thing you were telling me about! I hope you’re coming to love the Philippines.

  2. Drew McRae on March 8, 2010 at 8:34 am

    In terms of percentage of market share, I would look to the Philippines to continue to gain ground on India and increase their lead on other countries. In fact, several Indian BPO Companies have purchased or opened Call Centers here in the Philippines recently.

    One advantage may be one of the things that goes unnoticed here over Call Centers in other countries, accents. While language ability remains high throughout the Industry, accent plays both consciously and subconsciously upon the clients. English is taught here at an early age in school, with some Major schools in early and upper education, including college, requiring that all subjects be taught in English. This is reinforced in the culture through English cable television, Local programs in English and I have no problem catching a new Hollywood release at the local theatre, unsubtitled. The Filipinos have infixed the English speaking culture into their own.

    This sets the stage for not only the classic call center positions like Inbound/Outbound Service or Tech Support or the longer running Back Office Processes into the next Generation of opportunity in Sales and ‘Brach Office’ positions, working side by side (only an extension call away) with your offices across the globe.

    I don’t believe the world is quite flat yet, maybe more like a dinner plate, but as the visionaires continue to push the limits of desires, people like myself will be here to make it happen.

    Drew McRae
    dmcrae@ammex.com

  3. Fehmeen on March 9, 2010 at 1:25 pm

    Some time ago I read that the USA govt was planning to bring home some call centers to create jobs for locals. I see that obviously didn’t happen. Besides that, there are still some concerns call centers need to address to further improve their service:
    1-data security is not as stringent in developing countries
    2-some Americans/Europeans may get peeved by dealing with customer care reps that ‘pretend’ to be from their countries.

  4. Liz on March 12, 2010 at 3:19 am

    Sorry for the sort of irrelevant post. But anyway, as much as people suggest to me that I try applying in a call center, I am not really fond of the idea working in a call center.

    Other than stress and late-night shifts, I believe my work there will become a habit which I so despise. I don’t want a high pay for a job I will not like or something I have no knowledge of. But it’s great to hear that some people like the challenge of being in the call center.

    I’m happy with the job I have now. All I need to know is how to align my job with the company’s vision and mission.

    So there. Hehe. Josh, you’re really getting better with SEO and your articles here. Hah.

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