Date Released: December 11, 2012
2010 ANNUAL SURVEY OF PHILIPPINE
BUSINESS AND INDUSTRY (ASPBI)
BUSINESS PROCESS OUTSOURCING (BPO) ACTIVITIES
PRELIMINARY RESULTS
Business Process Outsourcing (BPO)
is the leveraging of technology or specialist process vendors to provide and manage an organization’s critical and/or non-critical enterprise processes and applications. The most common examples of BPO are call centres, human resources, accounting and payroll outsourcing. Business process outsourcing may involve the use of off-shore resources. The major components of the Philippine BPO industry are contact/call centers, software development, animation/creative service, data transcription, back office processing and engineering design. This Special Release on BPOs is based on a special tabulation from the preliminary results of the 2010 Annual Survey of Philippine Business and Industry for total employment 20 and over, specifically from the sections on Information and Communication, and Administrative and Support Service Activities. BPO activities cut across these two sections of the economy.Most of the BPO activities are call centers activities (voice)
Of the 1,868 establishments in the two sections, Information and Communication (537) and Administrative and Support Service Activities (1,331), 506 or 27.1 percent of were engaged in BPO activities.
Almost half (226 or 44.7%) of the BPO activities were engaged in call centers activities (voice). This was followed by computer programming activities with 169 or 33.4 percent. Data processing with 39 establishments shared 7.7 percent. (See Fig. 1)
Bulk of the jobs is in call centers activities (voice)
Employment generated by BPO activities with 212,990 in 2010 comprised 42.8 percent of the total employment of the two sections (497,116) which had 85,998 for Information and Communication and 411,118 for Administrative and Support Service Activities.
The bulk of the jobs were in call centers activities (voice), which employed more than three fourths of the total BPO workforce or 164,897 workers. Far second were establishments engaged in data processing with 20,557 personnel or 9.7 percent followed by computer programming activities with 17,620 employees or 8.3 percent of the total workforce for BPO activities.
Most workers in BPO activities are female
More than half (54.9%) of the total workforce (212,990) for BPO activities or 116,866 were female workers. Data processing, application hosting services, customer relationship management activities, and medical transcription activities employed more female than male workers. On the other hand; software publishing, motion picture, video and television programme activities, motion picture, video and television programme post-production activities, computer programming activities and other information technology and computer service activities employed more male than female. (See Fig. 2)
Employees in software publishing receive the highest annual pay
Total compensation paid by BPO activities in 2010 amounted to PHP74.9 billion, equivalent to an annual compensation of PHP352,617 per paid employee. Call centers activities (voice) activities paid the highest total compensation of about PHP56 billion accounting for almost three fourths (74.6%) of the total compensation paid by BPO Activities. Computer programming activities placed far second with PHP9.5 billion (12.7%). Data processing, ranked third with PHP6.5 billion (8.7%).
Employees in software publishing received the highest annual compensation per paid employee of PHP762,999 followed by workers in computer programming activities with PHP543,229 and motion picture, video and television programme post-production activities with PHP495,084. (See Fig. 3).
Call centers activities (voice) get the lion’s share in revenue, cost and value added
Gross revenue realized by BPO Activities reached PHP146.8 billion comprising 29.3 percent of the total revenue (PHP501.8 billion) earned by Information and Communication (PHP337.5 billion) and Administrative and Support Service Activities (PHP164.2 billion) in 2010.
Call centers activities (voice) got the lion’s share in revenue generation comprising almost 70 percent of the total revenue earned by BPO activities (PHP102.7B). On the other hand, computer programming activities came next with PHP24.8 billion (16.9%) while data processing followed in third with PHP12.7 billion (8.7%).
Total costs (excluding compensation paid to employees) incurred by BPO activities amounted to PHP54.0 billion or 24.0 percent of the total costs (PHP225.5B) spent by Information and Communication (PHP165.3B) and Administrative and Support Service Activities (PHP60.1B).
Call centers activities (voice) likewise incurred the highest cost of PHP34.3 billion (63.5%). Computer programming activities and data processing followed with PHP12.4 billion (22.9%) and PHP3.8 billion (7.0%), respectively.
Value added generated by BPO activities in 2010 summed to PHP99.7 billion which is more than one third (35.3%) of the total value added (PHP282.1B) generated by Information and Communication (PHP170.5B) and Administrative and Support Service Activities n (PHP111.6B).
Call centers activities (voice) with PHP73.9 billion contributed three-fourths share to the total value added for BPO activities. Computer programming activities ranked second with PHP13.1 billion (13.1%). Data processing came in third with PHP9.4 billion (9.4%). (See Fig. 4)
Revenue per peso cost is PHP2.72
For every peso spent, PHP2.72 was earned by BPO activities. Among the BPO industries, data processing registered the highest revenue per peso cost of PHP3.35. Motion picture, video and television programme post-production activities and medical transcription activities ranked second and third with PHP3.14 and PHP3.12, respectively.
Labor productivity stands at an annual average of PHP468 thousand
Labor productivity (value added per employee) in BPO activities stood at an annual average of PHP468 thousand in 2010. Computer programming activities, motion picture, video and television programme post-production activities, software publishing and application hosting services surpassed the national average for BPO activities. Computer programming activities shared the highest labor productivity with PHP742 thousand, followed by motion picture, video and television programme post-production activities with PHP635 thousand, and by software publishing PHP604 thousand.
Gross additions to fixed assets totals to PHP4.8 billion
Gross additions to fixed assets (capital expenditures less sale of fixed assets) by BPO activities totaled to PHP4.8 billion or 10.6 percent of the total gross addition to fixed assets (PHP45.5 billion) obtained by Information and Communication (PHP41.2B) and Administrative and Support Service Activities (PHP4.3B).
Call centers activities (voice) recorded the highest gross addition to fixed assets accounting 65.0 percent of the total gross addition to fixed assets acquired by BPO activities or PHP3.1 billion. Data processing followed with PHP1.0 billion (21.6%). Computer programming activities ranked third with PHP739.2 million (15.4%).
TECHNICAL NOTES
Scope and Coverage
The 2010 Annual Survey of Philippine Business and Industry (ASPBI) formerly known as Annual Survey of Establishments (ASE) was conducted to collect information on the structure and trends of economic activities in the entire country for the year 2010. Covered were establishments engaged in economic activities as defined under the 1994 Philippine Standard Industrial Classification (PSIC).
These establishments were classified into 18 sectors, two of which are Information and Communication (Sector J) and Administrative and Support Service Activities (Sector N) which covered, among others, establishments engaged in Business Process Outsourcing (BPO) activities.
All establishments engaged in BPO Activities nationwide were covered on a 100 percent basis except customer relationship management activities (N82211), sales and marketing (including telemarketing) activities (N82212), other call centers activities (voice), not elsewhere classified (N82219) and medical transcription activities (N82226) with Total Employment (TE) of less than 100, which were selected using stratified systematic sampling.
Response Rate
A total of 514 (92.28%) responded out of the 557 samples drawn for BPO activities establishments with total employment of 20 and over.
Concepts and Definition of Terms
Establishment - an economic unit which engages under a single ownership or control, i.e. under a single legal entity, in one or predominantly one kind of economic activity at a single fixed location. It is also defined as the unit that is engaged in the production of the most homogenous group of goods and services, usually at one location, sometimes over a wider area for which separate records are available that can provide data concerning the production of these goods and services and the materials, labor and physical resources used in the production.
Economic activity or business - is the activity of the establishment as classified under the1994 Philippine Standard Industrial Classification (PSIC). The main activity refers to the activity that contributes the biggest or major portion of the gross income or revenue of the establishment.
Computer and related activities establishment - Office or firm engaged in hardware consultancy, software publishing, software development, data processing, database activities and on-line distribution of electronic content, maintenance and repair of office, accounting and computing machinery and others.
Miscellaneous business activities establishment - Office or firm engaged in legal, accounting, bookkeeping and auditing; tax consultancy; market research and public opinion polling; business and management consultancy; architectural and engineering activities; land surveying services; technical and testing analysis; advertising; labor recruitment and provision of personnel; investigation and security services; cleaning of buildings of all types; pest control services; industrial cleaning activities; photographic activities; packaging activities; management and administrative services; bill collecting and credit rating services; business brokerage; stenographic, duplicating and mailing activities; fashion design; interior decoration services; call center activities; medical transcription and others.
Business Process Outsourcing (BPO) - is the leveraging of technology or specialist process vendors to provide and manage an organization’s critical and/or non-critical enterprise processes and applications.
Outsourcing (or contracting out) - is the delegation of non-core operations or jobs from internal production within a business to an external entity (such as a subcontractor) that specializes in that operation. Outsourcing is done to save money, improve quality, or free company resources for other activities. Outsourcing was first done in the data-processing industry and has spread to areas, including telemessaging and call centers.
Offshore outsourcing - is the practice of hiring an external organization to perform some or all business functions in a country other than the one where the product or service will be sold or consumed.
Computer consultancy and computer facilities management activities - includes planning and designing of computer systems that integrate computer hardware, software and communication technologies
Software Publishing - includes publishing of ready-made (non-customized) software: operating systems, business and other applications, computer games for all platforms
Computer programming activities - activities includes the activities of writing, modifying, testing, and supporting software, designing the structure and content of, and/or writing the computer code necessary to create and implement: systems software (including updates and patches), software applications (including updates and patches), databases, web pages; customizing of software, i.e.modifying and configuring an existing application so that it is functional within the client's information system environment
Data Processing - includes complete processing of data supplied by the customer, data entry services, scanning of documents , time share computer services etc
Database Activities and On-line Distribution of Electronic Content - some of the activities included in this group are compilation of data from one or more sources, online data base publishing, internet search sites ,,electronic learning are examples of the activities undertaken
Other Computer Related Activities - includes computer disaster recovery, software installation services
Call centers activities (Voice) - includes inbound call centers, answering calls from clients by using human operators, automatic call distribution, computer telephone integration, interactive voice response systems or similar methods to receive orders, provide product information, deal with customer request for assistance or address customer complaints; outbound call centers using similar methods to sell or market goods or services to potential customers, undertake market research or public opinion polling and similar activities for clients
Motion picture, video and television programme activities and post-production activities - includes production of theatrical and non-theatrical motion pictures whether on film, video tape, DVD or other media, including digital distribution, for direct projection in theatres or for broadcasting on television; supporting activities such as film editing, cutting, dubbing etc.; distribution of motion pictures or other film productions (video tapes, DVD's etc.) to other industries; as well as their projection. Buying and selling of motion picture or any other film production distribution rights is also included. It also includes production of motion pictures, videos, television programmes or television commercials. Post production activities such as: editing, film/tape transfers, titling, subtitling, credits closed captioning, computer-produced graphics, animation and special effects film/tape transfers Activities of motion pictures film laboratories and activities of special laboratories for animated films: developing and processing motion picture film, activities of motion picture film, reproduction of motion picture film for theatrical distribution
Total Employment - is the number of persons who worked in or for the establishment as of November 15, 2010.
Paid employees - are persons working in the establishment receiving regular pay as well as those working away from the establishment when paid by and under the control of the establishment. Included are persons working as full-time or part-time and those employees on sick leave, paid vacation or holiday. Excluded are consultants, home workers and workers receiving commission only.
Unpaid workers - include working owners who do not receive regular pay, apprentices and learners without regular pay, and persons working without regular pay for at least one third of the working time normal to the establishment.
Salaries and wages - are gross payments made by establishments to its employees in cash or in kind, that is, prior to deduction for employee’s contribution to SSS/GSIS, withholding tax, etc. Included are total basic pay; vacation, sick and maternity leave pay; overtime pay and other benefits.
Employer's contribution to SSS, GSIS, etc. - includes contribution to Employees Compensation Commission (ECC), Philhealth, PAG-IBIG, etc.
Revenue - refers to cash received and receivables for goods sold and services rendered by the establishment.
Cost - refers to all expenses excluding compensation incurred during the year whether paid or payable. Valuation should be at market price including taxes and other charges, net of discounts, rebates, returns and allowances. Goods received from and services rendered by other establishment of the same enterprise are valued as though purchased.
Fixed assets - are physical assets expected to have productive life of more than one year and intended for use and/or being used by the establishment. Included are land, buildings, fixtures, machinery, tool, furniture, office equipment, vehicles, and the like.
Gross additions to fixed assets - refer to the difference between the cost of acquisition of fixed assets acquired in 2006 and the value of sales of fixed assets during the year.
Capital expenditures - refer to the cost of acquisition of fixed assets acquired in 2006 whether or not full payments have been made.
Change in Inventories - is a derived indicator, is computed as the value of ending inventory less the value of beginning inventory.
Subsidies - are special grants in the form of financial assistance or tax exemption or tax privilege given by the government to develop an industry or production and to protect it against competition.
Inventories - refer to stocks of goods owned by or under the control of the establishment as of a fixed date, regardless of where the stocks are located. Valuation should be at current replacement cost in purchaser’s price at the indicated dates. Replacement cost is the cost of an item in terms of its present price rather than its original price.
Value Added - is gross output less intermediate costs.
Gross output - is equal to the sum of the total revenue (less interest income, rent income from land, dividend income, royalty income and franchise income), capital expenditures of fixed assets produced on own account and change in inventories.
Intermediate costs - is equal to the sum of the following cost items: materials and supplies purchased; fuels, lubricants, oils and greases purchased; electricity and water purchased; cost of industrial services done by others; cost of non-industrial services done by others; goods purchased for resale; research and experimental development expense; environmental protection expense; royalty fee; franchise fee and other cost.
Source: National Statistics Office
Manila, Philippines
Page last revised: December 19, 2012