Australian firms target Phl: PIDS
Most Australian firms prefer the Philippines to explore offshoring opportunities, as opposed to other rival potential business process outsourcing (BPO) destinations in the region, according to a study by government think tank Philippine Institute for Development Studies.
Favorable geographical time zone, highly literate workforce, and competitive labor rates are among the reasons Australian firms are attracted to the Philippines for their offshoring needs, according to former PIDS visiting research fellow Peter K. Ross and businessman Mike O’Hagan.
“The time zone in the Philippines favors Australian firms. It is the same as Perth, Western Australia, while there is only a two-hour difference to the Australian Eastern Standard time. This allows Australia-based managers to work with their Philippine-based staff in real time,” they explained.
Likewise, they noted that Australian shifts are also popular with Metro Manilabased BPO workers, as the time difference allows them to arrive and leave work two hours before Metro Manila’s main peak traffic times. In terms of geography, the two countries’ proximity makes it easier for Australian managers to commute to and from the Philippines with less resources.
“Philippines also has a highly literate and welleducated workforce currently increasing by around 600,000 tertiary graduates, including more than 3,000 public accountants annually. The variety of Filipino tertiary graduates also provides the varied skills that Australian SMEs need, such as the ability to speak in English fluently,” Ross and O’Hagan added.
Meanwhile, offshoring to the Philippines also gives Australian firms huge savings, which the authors approximated to be around 70 percent in terms of labor costs. Based on their estimates, median labor rates in the Philippines for call center type of work is about eight times lower than in Australia.
However, despite these advantages, the authors cited a number of challenges that the Philippine BPO sector needs to address. Government red tape, conflicting government requirements, poor infrastructure, traffic congestion, expensive and unreliable utilities, and biased adjudication of labor cases are among the red flags identified by the authors.