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Philippines set to earn $1bn a year from outsourcing

The Philippines' offshore IT-enabled services stand to earn approximately $1bn (£0.65bn) a year from the country's current pool of at least 290,000 IT-skilled Filipino professionals, according to a Gartner report.

Citing the results of an industry study carried out by Gartner Research and Advisory Services, Manuel Roxas II, secretary of the Department of Trade and Industry (DTI), said the expected revenue would come from global companies looking to outsource their backroom operations in the Philippines.

Recently, the government identified the IT-enabled services sector as one of the 10 industries that will bring in huge revenues for the country under the Philippine Export Development Plan or PEDP. Roxas said the study cited the Philippines as an "offshore destination of choice" for various IT-enabled services such as contact centres, business processing outsourcing (BPO) that includes shared service centres for multinational companies, application outsourcing like application development, maintenance and management, digital animation, and medical transcription.

He noted that a number of Gartner's commentaries validated and confirmed findings by both the government and the private sector on the country's inherent competitive advantages and important initiatives for the sector. Both the DTI and the Information Technology and E-Commerce Council (ITECC), the country's highest policy-making body for ICT, are pushing offshore e-services development to put the Philippines on the global IT map.   

Conducted last March 2002, the study focused on an analysis of the Philippine market's strengths, weaknesses, opportunities and in-depth discussions with local key IT practitioners.

It yielded reports on the offshore outsourcing opportunities in the Philippines and an in-depth assessment of the country for offshore IT-enabled services, said Roxas.

"The early findings that they [Gartner] have verbally conveyed is that they validate many of the assumptions that we have with respect to our branding and product positioning strategies," he said in a previous interview.

The research firm cited the country's English competency, high literacy rate as well as adaptability to Western business practice and culture, particularly that of the US, as its key advantages in the field of offshore e-services.

"With these advantages, Gartner sees quite a healthy uptake of transaction initiation, vis-a-vis the US market," Roxas noted. "This would also mean that transactions coming in would be of a higher level in the value chain rather than just passive transactions like the Q&A type of call centre service."

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