US FIRMS PREFER THE PHILIPPINES FOR FINANCE AND OTHER BPO SERVICES

This is hardly surprising for some of us in the outsourcing industry. For quite sometime now, there are big American companies that has been using the Philippines as their base for their finance and other outsourcing requirements.

One big difference is that most of the finance and other BPO work were being done by their own employees. This is something that some US companies may try to keep confidential but some of them house their finance departments in the country. Furthermore, I was informed that some US accounting firms have also established working relationships with their Filipino counterparts and had the locals work on some of their processes.

Here are some selected quotes from a related article posted in a provincial news source:

Mr. Gary Reddick, Senior Vice President of AIG Worldwide Life Insurance, shared why his company selected, and is now running a business process operation in, the Philippines, stating “By locating in the Philippines, we are able to leverage AIG’s strong local presence in an environment that is highly conducive to US-focused outsourcing operations.”

AIG American General is the second largest life insurer in the United States. In 2002, it formed AIG-BPSI as a joint venture between AIG General and Philamlife, the largest and most diversified insurance company in the Philippines. AIG-BPSI was to provide outsourced backroom processing as well as contact center services to AIG and its various customers worldwide. AIG-BPSI launched full operations in January 2003. In April 2006, AIG American General completely bought out Philamlife interests in AIG-BPSI.

Mr. Reddick also noted that AIG selected the Philippines because of the country’s advantages over alternative Asian sites: Labor costs equivalent to China; lower and more stable than India; prevalence of spoken American English; cultural and social affinity with the US; modern and stable infrastructure such as water, power, roads, telecommunications; large pool of qualified college graduates seeking white-collar employment; access to specialized skills aligned with US professional standards; government support and tax breaks for the industry; and more familiar environment for expatriate trainers and managers than other Asian alternatives. He added that having a local partner like Philamlife helped a great deal.