Peza unfazed by drop in PH ranking as outsourcing hub

MANILA  -The Philippine Economic Zone Authority (Peza) has remained optimistic about the growth prospects of the country’s outsourcing industry, despite the Philippines falling behind three places this year in a global ranking of destinations for services in this sector.

Peza Director General Tereso Panga said they acknowledged the Philippines’ decline in the 2023 Global Services Location Index of global management consultancy firm Kearney, but noted that the country can recover.

“Peza believes that this is temporary given that there is a renewal and strengthening of ties with the United States under our current administration,” Panga said, noting that some American firms have decided to bring their outsourcing business closer to their home country.

“We are banking on the improved perception of the Philippines as an investment destination of companies from the western hemisphere and attract them to re-engage with the Philippines,” Panga said.

The Philippines’ ranking dropped to 12th place among 78 countries included in Kearney’s report amid the rise of Mexico and Colombia as nearshore capability centers with proximity to the United States.

Despite this, Panga noted that the Philippines remains a prime destination for the traditional information technology and business process management services.

“This is in part due to the high English language proficiency of our workforce as well as the high quality of our [information technology] engineers,” said Panga.

The Peza official also said that they are looking at “ally-shoring” or “friend-shoring”—meaning outsourcing to allies and friends of partners such as the United States—as stopgap measures while new digital hubs are still in the pipeline.

Panga also noted that most of the companies that have transferred to Mexico and Columbia are basically targeting the Spanish speaking market in the United States, citing that it was not the local industry’s core target market.

“Instead, we are looking at the [IT and Business Process Association of the Philippines]to target English-speaking countries like Australia and New Zealand as the new markets for their industry given the country’s recent accession into the [Regional Comprehensive Economic Partnership],” he said.