"A curious sight has started appearing in the business districts of the Philippines: yuppies—coffee cup in one hand and a cigarette in another—hanging around the entrance of a building late at night or very early in the morning. The nocturnal office workers are call center employees, and seeing them taking coffee breaks during ungodly hours are bound to be more common.

Over the past few years, the emergence of numerous foreign- and locally-owned call centers in the country has made the contact center industry one of the most important segments of the Philippine economy. Aside from creating thousands of well-paying jobs for Filipinos, the call center industry also contributed 10% of the country's gross domestic product.

But what is truly phenomenal is the speed by which the industry has grown. In 2000, there were just four call centers in the country. By 2005, it has grown to include 105 inbound and outbound contact centers. Along with India and China, the Philippines is now considered as one of the world's key players in offshore call center outsourcing. The Philippine Board of Investors also reports that the industry has grown at a steady rate of 100% every year since 2001.

Insiders attribute the extraordinary growth of call centers in the country to many factors. First and foremost to the fact that many companies (particularly in the U.S.), choosing to streamline and focus on their core-competencies, have started outsourcing to countries like the Philippines where the cost of labor is considerably lower.

Conditions in the country are also very conducive to the growth of the call center industry. The Philippines has a large number of competent, English-speaking workforce (about 3 million Filipinos graduate from college each year) that can easily fulfill the needs of the contact center industry.

Another reason for the rapid growth of the call center industry in the Philippines is the fact that for many companies who outsource, Filipinos provide better service, especially when it comes to customer support, than their Indian or Chinese counterparts. So while labor costs in the Philippines are higher than in India, many companies still choose to outsource to the country because of the high-quality output and service Filipinos provide.

The 50 years the Philippines spent as a US colony and its penchant for Hollywood and most things American also contribute to the boom of the Philippine call center industry. Filipinos, the industry insider explains, are very familiar with what's happening in the US, their culture and slang. This makes us better-equipped to understand their cultural nuances than Indian or Chinese call center agents.

The fact that the country has stable and reliable infrastructure in place is another reason why foreign companies are outsourcing some of their services to the Philippines.

CONTINUOUS GROWTH

Experts note that the Philippine BPO industry's growth is bound to continue as many firms in the country are already expanding by offering more high-value services. Expressing their confidence, key players are targeting to take 5% of the $180 billion the global call center industry is expected to generate in 2010, and sustain the industry's rise.