Outsourcing to the Philippines: What every business should know

Outsourcing to the Philippines: What every business should know

When every dollar counts, forward-thinking businesses don’t just cut costs — they invest in strategic solutions. And today, outsourcing to the Philippines is one of the most powerful ways to do it. Home to a $38 billion IT-BPM industry and over 1.8 million skilled professionals¹, the Philippines isn’t just a low-cost option - it’s a global powerhouse of skilled talent, cultural alignment, and operational flexibility. Whether you're scaling your business for the first time or reshaping how you deliver services, tapping into Filipino expertise can give you the edge you need.

In this practical guide, we’ll break down how to leverage outsourcing the right way:

• What to know legally, operationally, and culturally
• How to structure offshore teams for maximum impact
• Practical tips for outsourcing to the Philippines
• And a step-by-step guide on how to start outsourcing to the Philippines.

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If you're exploring how to outsource to the Philippines for the first time - or want to do it smarter this time - this is your playbook.

The Philippines has established itself as one of the world’s top outsourcing destinations. The country’s BPO (business process outsourcing) industry contributes nearly $30 billion to its economy each year, employing over 1.3 million professionals across more than 1,000 companies. With an annual growth rate of 8–10%, the sector continues to expand rapidly.

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The Philippines holds an estimated 10–15% share of the global BPO market². The country serves clients across the United States, Europe, Australia, New Zealand, and Asia, which makes the Philippines a go-to destination for high-quality, English-speaking talent across a wide range of industries.

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Reasons why businesses outsource to the Philippines

Saving up to 70% on operational costs is reason enough for many companies to start outsourcing to the Philippines³. But those who succeed long-term know it’s about more than just saving money.

Here’s why the Philippines continues to dominate the global outsourcing market and why it could be a game-changer for your business.

Skilled workforce

Each year, more than 500,000 university graduates join the workforce in the Philippines - bringing strong educational foundations, professional skills, and a cultural alignment that makes it easy to work with international businesses⁴. This annual influx of graduates spans diverse fields, including finance, technology, marketing, customer service, and administrative support. 

Strong English proficiency

One of the key advantages of outsourcing to the Philippines is the country's high level of English proficiency - a major asset for international businesses. English is one of the Philippines’ official languages and is widely used across education, business, and government.

The country consistently ranks among the top in Asia for English language skills, placing 22nd out of 111 countries globally in the EF English Proficiency Index⁵. This strong foundation makes communication with Filipino professionals easy and natural, ensuring they can quickly integrate into global teams and contribute effectively from day one.

Compatibility with Western culture

One of the Philippines' key strengths as an outsourcing destination is its cultural compatibility with Western businesses. This compatibility is rooted in the country’s history - particularly its colonisation by the United States from 1898 to 1946⁶. During this period, American systems of education, governance, and commerce were deeply embedded into Filipino society.

As a result, Filipino professionals today are highly familiar with Western business norms, and they are well-suited to collaborate with Australian, US, and UK businesses. Their adaptability, combined with a strong service-oriented mindset, enables smooth integration into global operations and minimises the friction often associated with offshore staffing.

Time zone advantage

One of the standout benefits of outsourcing to the Philippines is the time zone compatibility with key business hubs across the Asia-Pacific region — including Australia. The Philippines operates just two to three hours behind major Australian cities, making real-time collaboration and communication easy for Australian businesses.

The minimal time difference allows for onshore and offshore teams to work in sync, and it enables faster decision-making and smoother project execution. Australian businesses can initiate tasks and communicate with their offshore team during usual local business hours. This makes it easy to address issues, provide feedback, and adjust priorities as needed without long delays.

 This is especially valuable for functions like customer service, where maintaining round-the-clock support would be prohibitively expensive locally due to high wage costs. The Philippines' strategic time zone and workforce availability make it an ideal location for businesses seeking continuous operations.

Cost savings 

One of the biggest advantages of outsourcing to the Philippines is cost savings. While businesses can reduce staffing expenses by up to 70% compared to hiring in Australia, rising local wages are making this even more appealing. In late 2024, Australian wages went up by 3.2%. This rate, though positive, is outpaced by inflation. As wage pressures continue to rise, many organisations are turning to offshore solutions to maintain cost efficiency without compromising on quality.⁷

The Philippines has a significantly lower cost of living, where everyday expenses such as housing, transportation, and food are considerably more affordable than in Western economies. Filipino professionals can enjoy a comfortable standard of living at lower salary levels - allowing international businesses to offer competitive pay well above local averages while keeping overall costs down. 

For example, the salary range for a software QA automation engineer in the Philippines is significantly lower than in Australia - even for highly experienced professionals. And it’s not just about the base salary. In Australia, you also need to factor in superannuation, work cover, equipment, training, and office space. Offshore roles come with their own costs too, but these are typically bundled into a single, transparent monthly fee - covering everything from HR support to infrastructure and employee benefits.

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Want a clearer picture? Our comprehensive outsourcing guide breaks down what talent really costs across the Philippines, Sri Lanka, India, and Australia with side-by-side role comparisons. 

Government support

The Philippines offers a strong, business-friendly legal foundation that makes outsourcing low-risk and cost-effective. The government actively supports the outsourcing sector through income tax holidays, policies, exemptions from certain local taxes, and preferential tax rates for qualified outsourcing activities that attract international businesses. Several business-friendly laws contribute to the country’s outsourcing appeal, such as: 

• Ease of Doing Business Act - Simplifies business registration and permits, making it faster for foreign companies to set up operations.
  
  
• Data Privacy Act (RA 10173) - Aligns with international standards to ensure secure handling of sensitive client and customer data.
  
  
• Telecommuting Act (RA 11165) - Supports flexible work arrangements, helping outsourcing providers attract and retain top talent.

Plus, organisations like the Philippine Economic Zone Authority (PEZA) and the IT and Business Process Association of the Philippines (IBPAP) help regulate and support the industry. They ensure compliance, promote growth, and give international businesses greater confidence when establishing offshore operations in the country.
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Common services outsourced in the Philippines

The Philippines has become a global leader in outsourcing for a wide range of business functions - backed by high-performing talent and strong government support. Today, it’s one of the most strategic locations for businesses looking to scale offshore. Some of the most commonly outsourced services include: 
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Customer service and support

With a reputation for excellent communication skills and empathy, the Philippines is recognised as one of the world's top destinations for customer service outsourcing - even earning the title of call centre capital of the world⁸. Filipino teams are highly valued for their professionalism and ability to deliver high-quality inbound and outbound call centre services, as well as email and live chat support.

In 2023, the Philippines' contact centre industry generated $31.5 billion in revenue, accounting for 83% of the entire IT-BPM sector’s revenue⁹ - a testament to the country's continued dominance in the global customer service market.

Finance and accounting

Businesses tap into the Philippines’ strong pool of finance professionals for cost-effective support across bookkeeping, payroll processing, accounts payable, and receivable management. As of 2023, there are approximately 200,000 Certified Public Accountants (CPAs) in the country¹⁰. With the number of skilled accountants increasing each year, the Philippines is well-positioned to meet the growing global demand for qualified finance professionals. Filipino finance professionals are well-versed in international accounting standards and ensures compliance and accuracy in financial reporting. Outsourcing finance functions to the Philippines allows companies to benefit from high-quality services at a lower cost, leveraging the expertise of professionals trained in global best practices.

Marketing support

The Philippines has established itself as a prime destination for marketing outsourcing, with a deep pool of creative and tech-savvy professionals. Filipino marketers excel in digital marketing, SEO/SEM, content creation, and graphic design, which enables companies to scale their marketing efforts efficiently while maintaining high-quality results.

Notably, design and marketing services dominate the outsourcing market in the Philippines, accounting for approximately 30% of the sector's share in 2023¹¹. This significant proportion underscores the country's robust capabilities and growing prominence in the global marketing outsourcing landscape.

IT and software development

The Philippines is home to a rapidly growing pool of tech talent, making it an ideal destination for IT and software development outsourcing. As of 2024, the country boasts approximately 250,000 software developers¹², reflecting a growing workforce adept in web and app development, software engineering, and technical support. The country's competitive pricing, combined with its strong emphasis on STEM education, allows businesses to access high-quality tech talent at a fraction of the cost of hiring locally. 

Filipino developers are known for their problem-solving abilities, adaptability, and familiarity with global technologies, making them valuable assets for businesses looking to scale their tech teams efficiently.

Administrative assistance

Filipino virtual assistants and executive assistants are highly sought after for their exceptional organisational skills, attention to detail, and reliability. They play a crucial role in helping businesses streamline back-office operations, from managing schedules and coordinating communications to handling data entry and bookkeeping tasks. 

Filipino VAs and EAs are particularly valued for their ability to adapt quickly to various business systems and processes, ensuring seamless integration into existing workflows. This level of support allows businesses to focus on their core activities while enjoying the benefits of cost-effective, high-quality administrative assistance.

HR and recruitment

Filipino HR experts bring a high level of professionalism and cultural understanding. Their experience in global HR practices, combined with cost-effective service, ensures businesses can access top talent without the operational complexity typically involved in hiring internationally.

In December 2023, hiring activity in the Philippines saw an 18% year-on-year increase in HR and administrative roles¹³, which reflects the country's growing capacity to meet global HR demands.

Logistics and supply chain support

The Philippines is a growing hub for logistics and supply chain outsourcing, with Filipino professionals offering expertise in procurement assistance, freight forwarding coordination, and inventory management. These professionals are adept at streamlining the movement of goods, managing vendor relationships, and overseeing inventory levels.

The country’s logistics sector was worth over $55 billion in 2024 and is expected to nearly double over the next decade¹⁴. This growth is driven by increasing globalisation, the demand for cost-effective supply chain solutions, and the adoption of new technologies such as AI and automation¹⁵.

Best practices for successful outsourcing to the Philippines

1. Choose the right partner.

Not all outsourcing providers are created equal. The best partners go beyond just filling seats - they value people, invest in client outcomes, and operate with transparency at every step. Look for a provider that offers:

• Full lifecycle support, from recruitment to ongoing team management
• A clear focus on data security and compliance
• Transparent pricing with no hidden fees
• A proven ability to match talent based not only on skills, but also on cultural fit
• Strong employee engagement and development programs that help keep attrition low
• Disaster recovery and business continuity plans, including data backups, redundant internet connections, and alternative work locations to ensure stability during disruptions

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2. Invest in onboarding and integration.

First impressions matter. A structured onboarding process - with clear documentation, access to systems, and warm team introductions - sets offshore hires up for success. Clients should conduct proper handovers and create resource hubs to support knowledge sharing.

3. Communicate early and often.

Set regular check-ins, not just task updates. Frequent communication builds trust, strengthens relationships, and boosts productivity. Keeping teams engaged through video calls and project management tools helps ensure alignment and smoother collaboration.

4. Embrace technology.

Use collaboration tools like Slack, Asana, or Microsoft Teams to create visibility across teams. Simple tech adoption can erase the 'offshore barrier' and make everyone feel like part of the same team. At Teamified, we encourage clients to leverage our platform to track performance, manage teams, and keep everyone aligned - helping foster smoother collaboration across borders.

5. Set realistic expectations.

An offshore team isn’t a “set and forget” solution. Like any other team, they require clear direction, regular feedback, and consistent support to thrive. Setting realistic expectations and providing ongoing guidance ensures that your offshore team stays engaged, aligned, and capable of delivering their best work.

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A step-by-step guide on how to start outsourcing to the Philippines

If you’re thinking about building an offshore team in the Philippines but are not sure where to begin, here's a simple, step-by-step guide to help you get started. Each stage plays a crucial role in your long-term success.

Step 1: Define what you need.

Start by identifying the roles and responsibilities you want to outsource. Are you looking for marketing support, customer service, or software development? Clearly outline the required skills, experience levels, and day-to-day tasks. This clarity helps you and your outsourcing partner find the right candidates faster.

Step 2: Look for a trusted partner.

A reliable outsourcing partner can make or break your success. Look for one that understands your industry, values long-term collaboration, and offers end-to-end support - from sourcing talent to ongoing management and performance tracking.

Step 3: Develop a clear job description.

Once you’ve decided what roles you need, work with your outsourcing partner to craft a detailed job description. This should include required skills, expected outputs, team structure, working hours, and any tools or platforms the hire will need to use. A strong role brief creates alignment and sets your team up for success from day one.

Step 4: Set up systems and access.

Before your new hire starts, make sure they have everything they need - access to tools, clear documentation, onboarding materials, and communication platforms. This ensures a smooth start and reduces downtime in the onboarding process.

Step 5: Integrate them into your team.

Treat your offshore hires like an extension of your in-house team. Schedule team introductions, explain workflows, key performance indicators (KPIs), assign a point of contact, and create regular check-ins to build trust. 

Step 6: Establish communication protocols.

Check in regularly to evaluate performance, gather feedback, and refine your workflows. Also acknowledge and celebrate accomplishments - big or small. A proactive approach ensures your offshore team continues to meet your business needs as they evolve.

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How Teamified helped their clients scale through outsourcing in the Philippines

Infuse Marketing

Melbourne-based marketing agency, Infuse Marketing, partners with some of Australia’s fastest-growing brands across industries like construction, finance, and food and beverage. To support their expanding client base, Infuse built an agile outsourced team in the Philippines through Teamified.

Key hires included a team of digital marketing experts, SEO specialists, and digital advertising specialists from the Philippines - broadening their capabilities across strategy, execution, and campaign support.

With the Filipino marketers’ support, Infuse Marketing drove a 63% increase in new website visitors and improved lead generation across campaigns for one of their major clients. The outsourced team has also supported strategic initiatives spanning LinkedIn, Google Ads, website content, and event coordination.

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Thriday

Thriday, an Australian FinTech company helping small businesses manage banking, invoicing, and tax in one platform, partnered with Teamified to build and launch their product while keeping costs under control. Teamified brought together a cross-functional team of 17 specialists - mostly based in the Philippines - across software development, DevOps, UX/UI design, customer support, and marketing.

The highly skilled Filipino talent helped Thriday move fast, reduce overhead, and launch a high-quality financial platform that now supports multiple areas of the business with efficiency and scale.

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Butn

Butn, a FinTech company offering invoice financing solutions, has also built a high-performing outsourced team in the Philippines since 2021 with the help of Teamified.

Starting with just one engineer, Butn gradually scaled to a team of seven across engineering, Salesforce development, operations, and solutions architecture. With a strong cultural fit and seamless collaboration from offshore Filipino talent, Butn’s offshore team now plays a key role in supporting the company’s growth and performance - boosting productivity, improving sprint delivery times, and contributing to faster product development cycles.

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Common challenges in outsourcing to the Philippines

While outsourcing to the Philippines offers access to a highly skilled and motivated talent pool, it’s important to acknowledge the challenges that can come with building a global team. Businesses may encounter hurdles such as managing time zone differences, navigating cultural nuances, and ensuring data security - especially in the early stages of remote collaboration.

The good news is that these challenges are all solvable. 

With the right support, businesses can put systems in place that not only address these issues - but create a foundation for long-term success. A knowledgeable outsourcing partner can help you adapt your workflows, build strong communication habits, and implement clear processes from day one.

If you’re exploring the idea of tapping into excellent Filipino talent, a good place to start is understanding whether your business is ready to outsource. Read our blog on the 5 signs your business is ready for outsourcing - it covers the key indicators to help you make an informed decision.
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References:

[1] Phl IT-BPM industry rakes $38-B in 2024 (tribune.net.ph)

[2] Future Of BPO Industry in The Philippines 2024 (nexford.edu)

[3] Outsourcing to the Philippines: A Guide for Australian Businesses (remotehirely.com)

[4] Are Higher Education Institutions Responsive to Changes in the Labor Market? (pidswebs.pids.gov.ph)

[5] The world’s largest ranking of countries and regions by English skills (ef.com)

[6] History of the Philippines (1898–1946) (en.wikipedia.org)

[7] Australian wages can’t buy what they used to (macrobusiness.com.au)

[8] Outsourcing to the Philippines, the top destination (outsourceaccelerator.com)

[9] Philippine contact center industry ends year with $31.5 billion in revenue (bworldonline.com)

[10] PH needs more accountants, says Board of Accountancy (abs-cbn.com)

[11] Rising Above: Tech Transformations in the Philippines BPO Sector 2024 (marketresearchphilippines.com)

[12] Top 10 software development companies in Philippines in 2024 (synodus.com) 

[13] Philippines records a 10% year-on-year rise in hiring activity in Dec 2023 (humanresourcesonline.net)

[14] Philippines Logistics Market Report and Forecast 2025-2034 (expertmarketresearch.com)

[15] Philippines Logistics Business Outsourcing Market Size and Forecasts 2030 (mobilityforesights.com)

[16] The Ultimate Guide to Outsourcing to the Philippines: Everything You Need to Know (kineticstaff.com)

[17] Outsourcing to the Philippines? Here's What You Need to Know (multiplymii.com)

[18] Philippine Outsourcing: All You Need to Know (outsourced.ph)

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