Philippines’ Rise as Call-Center Nation Lures Expats Home

Having grown up poor, Denise Sese found herself still mired in debt. It was 2009. A college dropout and one-time cashier at a Jollibee Foods Corp. fast-food outlet in Manila, she was out of a job.

At a Manila mall one day, she spotted a booth advertising a free call-center training program. She signed up and eventually landed a job, Bloomberg Markets magazine will report in its November issue.

Today, at 27, Sese exudes confidence as an account manager at Concentrix Corp., a unit of Fremont, California–based Synnex Corp. (SNX:US) In a high-rise building in the Eastwood City complex in Metro Manila, she leads an eight-member team that sells products to U.S. companies on behalf of clients such as online retailers and manufacturers of consumer electronics.

Linguistic diversity is a characteristic of life in the Philippines, which at different times was under British, Spanish and Japanese rule before independence from the U.S. in 1946. Like many Filipinos, Sese listens to American pop music, studied English in school and grew up watching Sesame Street, Friends and other U.S. TV programs.

Over time, she’s picked up an American accent from her callers. This, she says, has elicited surprise from customers on the other end of the line: “When they find out I’m Filipino, they’d be like, ‘Oh, my God!"

Sese got her foothold at Concentrix when call centers in the Philippines were flourishing. During the past decade, business process outsourcing -- which encompasses call centers, health-care information management and computer animation, among others -- has emerged as one of the fastest-growing segments of the country’s $272 billion economy.

In 2013, the BPO industry generated $15.5 billion in revenue and employed 900,000 people, up from $3.2 billion and 240,000 people in 2006, according to the IT and Business Process Association of the Philippines, or IBPAP.

Along the way, the industry eclipsed tourism as one of the biggest sources of foreign revenue, behind remittances sent home by Filipinos working abroad -- payments that reached a record $23 billion in 2013. It’s grown so fast that Philippine Senator Miriam Defensor Santiago last year proposed legislation to safeguard the welfare of BPO workers and ensure their rights to unionize.

Citing International Labour Organization studies, Santiago said 42.6 percent of BPO employees worked night shifts, and many suffered from insomnia and fatigue. As of mid-September, her bill was pending before the Senate Committee on Labor, Employment and Human Resources. IBPAP Chief Executive Officer Jose Mari Mercado says the industry upholds high standards.

“Our assets are our people,” he says. “We take extra effort to ensure that we compensate them properly and provide them with health and wellness packages.” Mercado says that by 2016, outsourcing may generate $25 billion in revenue and employ 1.3 million people, matching cash remittances for the first time. And BPO workers offer a plus that the Filipino diaspora doesn’t, he says.

“The difference is that our 1.3 million are here with their families, and they spend all of their money here,” he says, adding that each outsourcing job generates as many as 2.5 jobs in retail, public transportation and other service businesses. The outsourcing boom is fueling gross domestic product growth that has averaged 6.3 percent since 2010 and hit 7.2 percent last year.

For all that, poverty remains widespread, with 18.4 percent of the population living on less than $1.25 a day, according to the World Bank. The economy is struggling to accommodate a strikingly young demographic. Half of the population is 23.5 years old or younger, according to the CIA World Factbook in 2014. By comparison, the median age in Thailand is 36.2; in Japan, it’s 46.1.

To boost the economy after he took office four years ago, President Benigno S. Aquino III has gone after tax evaders, cracked down on corruption, attracted foreign capital and invested in infrastructure and education.

On a visit in July, World Bank President Jim Yong Kim said Aquino’s policies have been good for the economy.

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