(First of two parts)

MANILA, Philippines - Less than a decade ago, few people could have predicted that the country would become a business process outsourcing (BPO) powerhouse, second only to India which has a vastly larger talent pool and a longer industry track record.

In fact, until 2001, what was known as the nascent ?call center? industry employed no more than a couple of thousand employees engaged in low value-added work like answering phone-in technical support queries.

But Gregory Domingo remembers the exact moment when the tide turned in the Philippines? favor.

?We were in the US during the President?s trip in late 2001,? said the former managing director of the Department of Trade and Industry?s Board of Investments. ?My boss, then Secretary [Mar] Roxas decided to invite some officials of [IT research firm] Gartner for a meal.?

Over dinner, both trade officials briefed the Gartner officials and analysts?influential voices in the information technology field?about the potential of the country to become a BPO location, banking on the Filipinos? traditional strengths.

?All of them were surprised that [the Philippines] had a small call center industry. The awareness was not there,? Domingo said. ?And they were even more surprised when we told them what we could do.?

The trade officials pointed out that the Philippines had proficient English speakers, fluency in the concepts of accounting and engineering, the technical infrastructure and even affinity to the culture of the United States.

So surprised were the Gartner analysts, he said, that the company soon released a report entitled ?The Philippines: Offshoring?s best kept secret.?

The report became the bible of US firms seeking to improve their competitiveness by shipping their backroom operations overseas where labor costs were cheaper.

Its release also became a watershed event for the country, forever changing the labor scene and even helping form popular culture, especially among Filipino youth.

?Almost overnight, the biggest names started coming to the Philippines to set up their BPO operations here,? Domingo said. ?If you ask me what did it, that dinner between the DTI leadership and Gartner was the tipping point.?

Before that, however, the prospects of the BPO industry were not always as rosy. According to insiders, the path to today?s success was a product of vision, meticulous planning and, sometimes, bold risk-taking.

One of the pioneers of the local BPO industry recalled the many obstacles that the early players, one of which was the lack of government support?mainly because the government was still unaware of the job-generating potential of call centers and BPO firms.

?I remember that President Estrada wanted a theme for his first visit to the US in 2000,? said PeopleSupport president Rainerio ?Bong? Borja.

Right there and then, they were confronted by the challenging prospect of explaining the potential of the BPO industry to President Estrada?who was notorious for having a short attention span?and convince him to adopt BPO development as the main thrust of his state visit.

?We had to convince the President that this industry was important, and it was the DTI who convinced him to adopt the information technology theme of ?bridging the digital divide?,? Borja said.

He added that the best chance they had for a breakthrough with the President was through the sympathetic leadership of the trade department. ?The DTI secretary then organized a meeting in Malacañang where we had to demonstrate to President Estrada what we were talking about.?

?We had to bring our products to the Palace, so I brought a live support system, using the Web, which allowed him to talk to a call center agent while calling from Malacañang,? Borja recalled, adding that President Estrada took turns trying out the products of each proponent present in the meeting.

The result was full-fledged support from the government that transcended the fall of the Estrada administration.

From 1,500 employees, the BPO industry is now setting its sights on hiring as many as a million workers in the near future. (To be concluded)