How to Outsource in the Philippines (For Tech Companies)

With an English-speaking virtual labor force of 1.2M+ and average salaries for remote workers in the $400–1,000USD/month range (€353–882), the Philippines has long been a remote hiring hotspot for tech companies. ¹

When it comes to virtual assistants, customer support, and other back-office processes, the Philippines workforce is hard to beat on price and quality of service, even in 2024. It’s the center of the BPO (Business Process Outsourcing) industry for a reason.

The Philippines isn’t without issues, however. Spotty internet, cultural and communication challenges, and brain drain among skilled workers are just the start.

In this post, I’ll walk you through the pros and cons of the Philippines as a business process outsourcing location for tech companies, and establish exactly the types of tasks you should consider the location for.

I’ll also share some personal tips that have helped me retain Phillipines-based Virtual Assistants for 50% longer than the industry standard, without going over market rates.

Summary of the Philippines Among Offshore Labor Markets

World Trade Organization reports show that Business Process Outsourcing (BPO) accounts for close to 7% of the Philippines national economy — and it’s likely much higher when accounting for unreported remote labor. ²

On the whole, The Philippines has strong IT and tech talent but struggles to compete with other common IT outsourcing locations like Eastern Europe and South America in terms of volume of talent and culture fit.

India and Pakistan have a far higher volume of educated, talented engineers at similar salary ranges; in fact, India holds the number three spot for most GitHub accounts among world countries, while the Philippines doesn’t even make the top 30.

How much should outsourcing cost in the Philippines?

*Annualized salaries do not include any taxes, fees, or benefits, but do account for 13th month bonus.

VA Salary Level (Philippines)	Monthly rate	Annualized*
Low	$400-700	$5200-9,100
Mid	$700-1,100	9,100-13,200
High	$1,100-1,700	$13,200-22,100

The obvious advantage of outsourcing in the Philippines is cost: when hiring Philippines talent, expect to pay around one-tenth of the corresponding rate in USD for US-based workers.

You can find a full-time virtual assistant there for as little as $400–500 a month. Add a zero on that for the $5000USD/month cost of US-based low-mid-skill remote workers, and you can see why that matters for your business.

Any lower than $400–500/month and you’ll struggle to maintain quality and priority over other companies competing for workers. $1000/month is a good standard to go by; you can get high-quality talent for that rate, and they’ll prioritize your work and engage for "the long haul."

What kind of outsourcing talent can be found in the Philippines?

The Philippines has large, cost-effective workforces in the following functional areas:

• Virtual assistants
• Business Process Outsourcing
• Project management
• Data entry
• Call center support
• Chat support agents
• Abandoned cart outreach
• Email outreach
• UI and Graphic Design

All of these share two common reasons why they work well with Filipino talent:

1. Asynchronous tasks. Work that is less time-sensitive is a good fit for reverse time zones with high internet downtime.
2. Low-mid-education or self-education skillsets. The best value for talent in the Philippines is for skills that can be learned outside of an expensive formal education.

If the work you need done is highly technical in nature, and if you don’t have a physical office in the Philippines to conduct that business process, it’s not recommended.

What are the best cities in the Phillipines for BPO?

Manila — full stop. Unless you’re there in person, Manila (the capital city) has the most reliable and internet-enabled workforce. However, going rates are almost 20% higher than the median average in the Phillipines generally. You can save on salary by looking to lower-cost cities in the region, particularly for part-time talent.

Sourcing and Vetting Talent in the Philippines

If you’re doing anything more than a small contract team, you’re going to want a tax consultant to work with and make sure your legal ducks are in a row — especially if you’re building a core part of your business around any processes outsourced to the Philippines.

However, it can be surprisingly easy to find individual virtual assistants or small teams via platforms like Upwork, which may better enable you to build teams of up to a dozen people.

Of course, off-platform and in-person scouting will always be less costly in terms of money, but online freelancing platforms won’t cost you nearly as much time. Time is money, and the idea here is to get past the paperwork requirements and skip the difficulties of locating and securing that talent.

Upwork does bid up your pricing a little bit because of availability. Earlier, I mentioned that a virtual assistant at the low-end can cost you about $500 per month, but on-platform you’ll pay closer to $800+ per month. Additionally, your contractors can be more easily poached by other clients. After all, a 50-cent raise is a huge percentage of a $5/hr paycheck.

If you do go-off platform, consider incentivizing Filipino colleagues to recruit friends and family.

Should I hire developers in the Philippines?

Although there are strong engineers to be found in the Philippines, they tend to focus mainly on app development and the call center industry and be more effective when working on-premise with local companies.

Compared with other tech outsourcing hubs in Latin America and India, the Philippines has lagged a bit on government engagement with STEM education. ³

What tech talent they have also tends to vacate the country to places like Singapore, for example, in order to find higher wages than are paid in Manila. That’s not to say there isn’t amazing IT and technical talent in the Phillipines; just that it’s not as easy to find when you’re not there in person compared with regions like Eastern Europe or South America.

How to improve retention of staff in the Philippines

Sadly, a lot of companies specifically outsource to the Philippines to take advantage of low regulatory standards.

The best retention tricks for Philippines-based workers boil down to “don’t be a jerk.” Decent pay combined with a few low-cost perks and basic amenities go a long way:

1. Sign workers up for a 13-month contract. This basically says that when you reach the one-year mark, you get an additional month’s worth of pay. It builds in an annual bonus that they’re going to want to stick around for every year, unlike quarterly or monthly incentive systems. Even if they don’t sign a formal contract, giving a bonus on this time table is recommended for retention.
2. Account for Catholic holidays. Catholicism is common to Filipino culture, so provide reasonable off time for holidays. Two weeks for Christmas is normal, even for remote VA-type contracts.
3. Keep track of their family situation. Family is hugely important in Filipino culture, so don’t feel like you’re overstepping if you ask “how’s the family doing” on catch-up calls. Asking how their family is doing on a catch-up call can go a long way towards building rapport, even if it might feel too personal when engaging with a US or EU-based worker.

Keep in mind that remote contractors in the Philippines may be sacrificing a higher wage tier for the sake of caring for family, given the higher salaries to be earned by simply leaving the Philippines. It’s common for virtual assistants to be “stuck” in areas with poor internet due to the requirement that they care for an aging family member.

Again, if you don’t just treat them as a number, they’ll be likely not only to stay, but to refer friends and relatives to your company.

Obstacles to Outsourcing in the Philippines

The internet and the time zone are going to be the two biggest logistical factors when outsourcing to the Phillipines.

• Massive gap between time zones. VAs in the Philippines commonly work the midnight shift to sync with US and EU clients.
• Frequent storms and natural disasters. Experiencing spotty connection or outright downtime is not an irregular occurrence in the Philippines. In fact, call centers will often have a handful of internet providers just for one building in order to avoid downtime. Working with individuals in smaller offices or their home, the issue becomes more pronounced and impossible to troubleshoot. Also note that residential internet providers in the Philippines cycle through IP addresses very rapidly.

Workarounds for common issues with Philippines BPO

Internet workarounds

1. If you’re working with virtual assistants, you’re likely working with people out of a small office or their homes. If they’re working from home, include their internet bill in the contract (and require a receipt each month) to ensure they have the best possible connection. This should also allow you to get them a dedicated IP, if needed for your tasks.
2. Get them a MyFi router or mobile wifi hotspot. A variety of companies in the Philippines offer this because when the physical line goes out, mobile reception from cell towers will probably still be operational. It adds another layer of security to keep processes flowing if the wired internet goes down.

In my opinion, purchasing high-quality home internet is one of the best perks for keeping employees happy and productive, offshore or otherwise.

Time zone workarounds

1. Establish (reasonable) expectations of daily work hours. Read between the lines try and assess what other jobs they might be doing, because they may be busy working multiple jobs. Normally with offshoring or nearshoring, I don’t recommend strange hours — but in the Philippines, virtual assistants more often prefer to work overnight, when fewer people are using up internet bandwidth.
2. Account for family and religious holidays. Related to what I mentioned about culture earlier, family is big for them; therefore, so is stability. They’re in a weak negotiating position, so set a process for giving out raises according to your budget. Even if it’s small and symbolic in nature, show the people who stay with you that they’re getting somewhere. If someone has worked loyally with you for five years, they shouldn’t be making only 5% more than what they started at.
3. Avoid putting them “on the spot” on conference calls. Although Filipino people speak excellent English, they tend to be self-conscious about their accent on group calls and more comfortable with text-based communications. When doing conference calls, they sometimes are cautious to engage, so save video calling for personal engagement moments. For example, if their quarterly raise is coming up, don’t just email them about it. Give them a quick call to remind them that you appreciate their hard work, check in, and let them know you’re giving them a raise for their hard work. For other purposes, though, email will work just fine.