As the local BPO industry continues to grow, the Philippines is on the fast track to becoming one of the prime outsourcing destinations in the world. Next to Metro Manila, Cebu City is considered as one of the most important BPO destinations in the country. As more and more investors flock to the city, the “Queen of the South” is fast becoming the largest call center hub in the Visayas region.
Business Process Outsourcing (BPO) is one of the fastest growing industries in Cebu City. Because of the low cost of labor, more and more foreign and local companies are now setting up operations in the city. There are already a number of call centers in the area, and more are still on the way. Some of the large Metro Manila based call centers have already set up a second or “provincial center” in Cebu. Even a few small and medium BPOs have bypassed Metro Manila entirely and gone straight to Cebu. Coupled with an exceptionally skilled workforce and a lower cost of living, it’s no mystery that the Philippine BPO industry is alive and well in Cebu City.
The ability of most Cebuanos to understand and communicate in fluent English is also an important advantage in the city’s outsourcing industry. As English is considered the lingua franca of the call center industry, a rudimentary knowledge of the language is essential in fields like customer service and telemarketing.
The average salary of a call center agent in Cebu is between Php 13,000 and Php 15,000 per month, while the salaries of Manila-based agents range from Php 15,000 to Php 18,000. This is primarily because Manila is a Central Business District (CBD) and boasts a more competitive workforce than in Cebu. However, employee attrition rates are lower in Cebu, indicating higher job satisfaction among call center agents in the area.
In terms of operational costs, setting up business in Cebu is cheaper than in Manila. Rental rates are 31% lower in Cebu, commercial office space going for as little as Php 250 per square meter. The average rental rate for commercial office space in Manila is Php 800 per square meter. Electricity and other utility expenses are also 40% cheaper in Cebu, electrical expenses costing as little as Php 4,000 per month for smaller-scale businesses.
According to Gregory Kittelson, Outsourcing Consultant of Makati-based Kittelson and Carpo Consulting, “The growing number of foreign investors is a strong indication that Cebu City is fast becoming an important BPO center in the country. More and more foreign companies are now tapping into the local workforce, injecting large amounts of capital into the economy. I believe that this bodes well for the future of Cebu City’s outsourcing industry.”
The growing BPO industry has also created a number of job opportunities for Cebuanos, providing solid employment for the local workforce . This, in turn, has further boosted the local economy. A recent study by the Department of Trade and Industry puts the GDP growth at 4.5% in 2008. Experts are also expecting a steady increase in employment for the second quarter of 2010.
Although call centers in Manila work at a faster pace and are considered more professional, Cebu is still considered the #1 provincial destination for foreign multinationals and BPOs. And As the local outsourcing industry continues to grow, Cebu City will continue to establish itself as one of the prime outsourcing destinations in the Philippines.