The Philippines has become the call-center

capital of the world

By DONLEE
FEBRUARY1,2015,4:26PM

REPORTINGFROMMANILA

versinceJoahnnaHorcalostherfather,adoctor,inaSouthChinaSeatyphoon,her
largefamilyhasstruggledtomakeendsmeet.

SoafterHorcaearnedacollegedegreeinsocialwork,anoldersisternudgedhertohelpsupport
thefamilybytakingabetterpayingjobatacallcenter.
Thatwaseightyearsago,whentheoutsourcingindustrywasjusttakingoffinthePhilippines.
Today,it'sthejobofchoiceformanyyoungpeoplehere.Morethan1millionFilipinosnowworkat
callcentersandinrelatedoutsourcingbusinesses,mostlyservingAmericancompanies.
ThecombinationofcheaplaborandspecializedskillshasmadetheFilipinoworkforceinvaluable
toagrowinglistofU.S.companies,whichusethemtofieldcustomercomplaints,generatesales
leads,codedata,formatdocumentsandreadmedicalscansandlegalbriefs.
Horca,30,eventuallygothersocialworkerlicense,butshecouldnevertearherselfawayfromthe
callcenterjobforaU.S.bankingcompany.It'sdrainingwork.Shehandlesasmanyas100callsa
dayfromangryAmericans,oftenworkingthegraveyardshift.
Butshemakesabout$700amonth,morethanmanygeneralphysiciansearninthePhilippines,
letalonesocialworkers.
TheindustryinthePhilippineshasgrownsofastthatithasovertakenIndiaasthecallcenter
capitaloftheworld.Indiastillrulestheinformationtechnologyoutsourcingrealm,butanarmyof
FilipinocollegegraduateslikeHorcanowdominatesmosteveryotherkindoftaskknownas
businessprocessoutsourcing,orBPO.
Bynextyear,expertsestimatethatthecountry'sBPOindustrywillgenerate$25billioninrevenue,
accountingforabout10%ofthePhilippines'economyandasmuchasthetotalamountexpectedto
besenthomebythe11millionFilipinonurses,sailors,musiciansandothersworkingoverseas.
TheEnglishspokenbyFilipinosisclosertoAmericans'thaninIndia."Ourcultureisverysimilar,"
saidFredChua,alifelongManilaresidentwhorunsacallcenter.AcousininSanFranciscodrums

upbusinessforthecompany,MagellanSolutions."Wedon'tyellonthephoneoften.We'revery
customercentric,"Chuasaid.
ThathelpsexplainwhythecountryhasbecomeAmerica'stopoverseassiteforvoicerelatedwork
inbusinessoutsourcing.
CorporationssuchasCitibank,Safeway,ChevronandAetnaallhaveBPOoperationshere,asdo
smallercompaniesrangingfromaGeorgiamedicalcollectionagencytoaNewYorkspaoperator
thatoutsourcesitscustomerappointments.
Theoutsourcingboomhashelpedpropelthecountry'seconomy,oncealaggardofAsia,intoone
oftheregion'sfastestgrowing.TheindustryhasspawnedbustlingbusinessdistrictsinManila,
withskyscrapers,24hourbuffetsandcondosthatsellfor$500,000.
Formostofthelastfourdecades,whileEastAsiantigereconomieswereroaringahead,the
Philippineswallowedamidrampantcorruption,lousyroadsandsluggishinvestments.
Butafter25yearsofslowandpainfulreforms,thecountryisontracktoachieveannualgrowth
ratesof7%to10%overthenext10years,accordingtoBernardoVilegas,aHarvardtrained
Filipinoeconomist.Theeconomyexpanded7.2%in2013andslowedtoalittlemorethan6%last
year,comparedwithChina's7.4%lastyear.
OneofthePhilippines'biggestadvantagesisitslargeandgrowingyoungpopulation:About90%
ofits100millionpeopleareunder55,comparedwith61%forJapanand73%fortheU.S.Most
FilipinosalsospeakEnglish,whichisoneoftwoofficiallanguagesalongwithTagalog.
ForyearsforeignremittancesbyFilipinosworkingabroadwereapillarofthecountry'seconomy,
alongwithagricultureandmining.Nowtheresurgingeconomyisdrawingsomeofthoseworkers
backhome.
ButchValenzuela,55,leftManilaintheearly1980stoescaperiotingasmassesprotestedthe
strongarmruleofFerdinandMarcos.ValenzuelawenttoCalifornia,attendedUCLA,rosethrough
theranksatamanufacturingcompanyandbuiltacomfortablelifeinOrangeCounty.
Butafewmonthsago,Valenzuela'swifesoldtheirhouseinIrvineandmovedbacktoManila,
joiningherhusbandwhohadreturnedtothePhilippinesseveralyearsearliertosetupacall
center.
ValenzuelalaunchedVisayaKnowledgeProcesswith14workers.Hehasyettomakeaprofit,butit
hasgrowntoabout200"seats,"whichisthewaytheindustrymeasuresthesizeofanoperation.
Visayaisoneofabout1,000BPOoperationsinthePhilippines.AfewgiantsledbyConvergysand

Accenture,whichhavetensofthousandsseatseach,dominatethebusiness.Butthepiekeeps
gettingbiggerasAmericancompaniesseekcheaperlabor.CallcenterworkersintheU.S.make
aboutfourtimestheirManilacounterparts.
Onarecentweeknight,itwashardtotellnightfromdayatVisaya'scallcenteronthe14thfloorof
anondescriptbuildinginMakati,anaffluentdistrictinManila.Thecurtainsweredrawn,andthe
clocksontheofficewallweredisplayingdifferenttimesinfourU.S.zones.
Atmidnightlocaltime,thecallcentercametolifeasdozensofworkers,sittingcubiclebycubicle,
beganmakingcallstogeneratecustomerleadsforagroupofCalifornia'sforprofitschools.
OtherworkersdialedAmericanhospitalstoverifyclaimsforinsurers.Allinall,itwasaneasyshift
forthestaffcomparedtowhentheyareassignedtodealwithunhappyHomeShoppingNetwork
customers.
Nomatterhowdifficultthecaller,Valenzuelasaid,"ouragentscan'thangup.Theyhavetofigure
outawayofcalmlyendingacall."
Industryturnoverishigh,onaverageabout60%,saidJoseMariP.Mercado,presidentoftheIT&
BusinessProcessAssn.ThatmeansatypicalworkerwhostartsinJanuarywillbegonebyJuly,a
signofhowstressfulanddemandingthejobscanbe.
YettherelativelygoodpaycallcenterworkersmakedoubletheaveragesalaryofaManilabank
tellerkeepsdrawingpeopleintothemarket.Mercadoreckonsthatbusinessoutsourcingtothe
Philippineswillgrowforyearstocome.
AmericanandEuropeancompaniesareincreasinglyoutsourcingmoresophisticatedworkthatwas
oncelargelydonebylegalsecretaries,junioraccountantsandmedicalstaffintheU.S.This
includespreparingresearchreports,formattingdocumentsandprovidingclinicalsupport.
"Weproduce3,000CPAsayear,"saidMercado,notingthatthey'retrainedaccordingtoU.S.
accountingstandards.
Likewise,lawschoolsinthePhilippinesfollowAmericancurriculum,makinggraduatesan
attractivelowcostoptionforsomeU.S.businesses.StartingassociatesatManilalawfirms
generallymakeroughly$700amonthaboutasmuchasJoahnnaHorcamakesatacallcenter.
"It'snotonlyaboutcost,butaboutefficiencyacrossalllinesofbusiness,"saidBobGogel,chief
executiveofIntegreonInc.inNewYork,whichhasBPOoperationsinadozencitiesaroundthe
world,includingManilaandFargo,N.D.
Heinsistedthattheoverseasboomwasn'teliminatingjobsintheU.S.WhilehisManilaofficeis

growing,hesaid,soistheoneinNorthDakota,whichhas175employeesbutisbeingexpandedto
300.
Integreon'sManilaofficeopenedin2007andalreadyhas700employees.BenjaminRomualdez,
thecompany'scountryhead,saiddemandisparticularlystrongforlegaltranscription,document
formattingandbriefpreparation.Integreonnowhas200Filipinolawyersonstaffandunder
contract.
Oneofthem,JuliusCerada,spendsmostofhisworknightsporingoverbriefsandhighlighting
partsthatmightbeofinteresttoU.S.clients.Ceradawouldn'tsaywhatheearns,onlythatit's
competitivewithwhathemadeasaninhousecompanylawyer.Itwasn'taboutthemoney,hesaid
ofwhyhequitin2013andjoinedIntegreon.
"Worklifebalanceisimportanttome,"hesaid,notingthathewasputtingintoomanyhours
before."Ijustturned50.Healthismyprimaryconcern."
don.lee@latimes.com
Copyright2015,LosAngelesTimes