Southeast Asia's Economies
The Philippines: Call Centres and Remittances
How business process outsourcing and money sent home by overseas workers became the twin pillars of the Philippine economy.
The Philippines has grown on two unusual pillars: business process outsourcing at home and remittances from millions of workers abroad.
Business process outsourcing
Since the 2000s, the Philippines has become one of the world’s leading destinations for BPO: call centres, customer service, back-office work and increasingly health care administration and IT services.
Advantages include:
- English proficiency and familiarity with American culture.
- A young, educated workforce.
- Lower costs than in the US.
The BPO industry employs well over a million Filipinos and earns billions of dollars in exports. It competes with India, which leads in IT services, while the Philippines has specialised in voice-based customer support.
Overseas Filipino workers
Around 10 million Filipinos live or work abroad, including:
- Nurses and caregivers in the US, UK, Gulf and elsewhere.
- Seafarers: Filipinos make up a large share of the world’s ship crews.
- Domestic workers and construction workers in the Gulf and East Asia.
Their remittances amount to roughly a tenth of GDP, supporting household spending, education and housing.
Government support
The Philippines has a dedicated ministry for migrant workers and systems for training, deployment and protection abroad.
Challenges
- AI may automate some call centre and back-office work.
- Family separation and the social costs of migration.
- Manufacturing has lagged compared with neighbours like Vietnam and Thailand.
- Infrastructure and investment gaps.
Parallels with India
Like India, the Philippines benefits from English skills and services exports. Kerala’s reliance on Gulf remittances resembles parts of the Philippines.
A graduate in Manila works nights answering calls for a US bank, matching American business hours. Her brother is a nurse in the UK, sending money home each month. Together, their earnings pay for their younger sister's university fees.
Philippine BPO has moved into health care, finance and IT services requiring specialised skills.
- The Philippines is a global leader in business process outsourcing.
- English skills and cultural familiarity helped it win customer service work.
- Remittances from around 10 million overseas Filipinos are about a tenth of GDP.
- AI automation and weak manufacturing are key challenges.
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