Over a decade ago, the Philippines’ Fort Bonifacio was an old military base created during World War II. But thanks largely to privatization and conversion programs, the city —- now known as Bonifacio Global City —- is a modernized financial district filled with condos, malls, and skyscrapers.
The city’s surging growth still speaks of its “unicorns” —- tech startups that grew to multi-billion-valuations. At present, the city has constructed over 30 unicorns. But with startups maturing, the growing-it-all-cost mentality will soon be replaced by profitability and capital efficiency.
BPO and Tech Startups
The Philippines possesses one of the biggest business processing outsourcing (BPO) in the globe. It currently employs more than one million workers and is forecasted to cap the $25 billion revenue mark next year. That’s a feat for a country with a GDP of $270 billion. Tech-enabled services are the country’s backbone. It’s also one of the fastest growing sectors with a demand for high-end skills which include data analytics, mobile app creation, and mid-level skills (copywriting, video creation, and financial analysis).
Tech startups are the Philippines’ recent customers and an increasing number of them are flocking the shores every year. Aside from savings in labor costs, the country is becoming an attractive spot for tech-related employment, especially for U.S.-based firms, due to its youth and educated workforce, and English-speaking population. Unlike that of other outsourcing hubs, most Filipinos are familiar with American culture.
Philippine universities crank out more than 100,000 IT and engineering graduates every year. A majority are skilled in computer programming and iOS/Android application development. A typical highly-skilled web developer (with a 5-year experience) can cost around $25,000 yearly.
Aside from such skills, there’s also a shift in the mindset of today’s young workers. Before, business process outsourcing is often related to high-volume and cost-effective work. Nowadays, working for a venture-backed tech startup is the preferred option. Such shift is good news for startups. Abandoning back office work, hiring a new batch of talent is all about being in the front line and creating new products and services.
New Market Opportunities
There are plenty of opportunities for moving into new markets, given the country’s strengths within Southeast Asia. Due to the familiarity of the English language, product managers are finding it easier to utilize Philippines as a testing market to carry out applications without having to translate to a non-English language.
Rising markets are a well-known destination for outsourcing affordable labour. But talent on certain areas can be of benefit for tech startups going beyond cost cuts and low-skilled hires. Filipino employees are now proving themselves to be valuable assets in today’s tech industry, and startups should be aware.