The Minimal Effect of Social Unrest on Philippine Outsourcing

The Minimal Effect of Social Unrest on Philippine Outsourcing

Picture of Daven Michaels

Daven Michaels

New York Times Bestselling Author, 30-year business veteran, and Executive Chairman of CurrentC Group.

There has been significant political instability in the Philippines over the past decade or so. From the Oakwood mutiny of July 2003 to more recent incidents, the general perception was that the unrest would have drastic long-term effects on the country’s economy, including the service industry, of which the business processing sector is a major part. Although this perception was widespread and caused serious apprehension on the parts of foreign client companies who relied on Philippine outsourcing companies for significant parts of their business processes, it was eventually proven untrue as the resilience of Philippine society prevailed and stability was maintained.

This was especially true in the local and offshore IT industries of the country.

Analysts eventually found that the incident was relegated to being a mere nuisance, soon forgotten and without any lasting effects on the economy. It was also stated by research firms that the pronouncement and subsequent lifting of a state of emergency was just in time to avoid any lasting effects on the country’s economic growth. However, it is expected that over the short-term, some offshore contracts might be cancelled or suspended due to the client companies not fully understanding “ the real meaning behind events of social unrest in Philippine society ”, according to a statement released by the IT research firm XMG Inc.

Soon though, it is expected that things will even out and all the social unrest will have minimal effect on Philippine outsourcing, especially as service providers have continued their work with no modifications except for minor adjustments to regular business meetings due to political protests. They clarified that this in no way tampered with the quality of their services, or the efficiency with which they were delivered. Some companies have even announced plans to expand their operations while others have announced plans to recruit thousands of new employees. These expansions, in spite of the internal issues and international pressure from countries like China and India are expected to result in exponential growth in the industry, creating multitudes of jobs and increasing the market share controlled by Philippines outsourcing countries.

The booming Philippines outsourcing industry is deemed as essential to the economy by the country’s government and due to this, the government has drawn us a variety of incentives for foreign countries who intend to set up offshore offices there, or partner with indigenous companies.

The Philippines is still the most favoured country for the outsourcing of business processes.

This is mainly due to massive demand from the United States of America. Apart from the incentives that the government is offering, the favoured position is also due to the Filipinos’ excellent ability to use the English language and their familiarity with western culture as a result of historical cultural affinity.

Daven Michaels is a New York Times Best Selling Author and CEO of premiere global outsourcing company, 123Employee. The company employs hundreds of young bright individuals on three continents. His International event, Beyond Marketing Live! inspires entrepreneurs build & grow their business with revolutionary new theories and systems allowing them to design the business and personal lifestyle of their dreams.


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