Will Clark Become the Philippines’ Biggest Global Outsourcing Hub?

With the outburst of growing jobs in the outsourcing industry, there is a need to look for new locations for the next potential outsourcing hub. The major outsourcing hubs in the past have been in the capital cities of the Philippines and India but they are unable to meet the needs of the continuously growing outsourcing market due to the high cost of real estate. In recent years outsourcing companies have been popping up in newly developed areas outside of Manila and Bangalore, so what city will become the next global outsourcing hub?

The Clark freeport zone located a couple hours north of Manila has been attracting a lot of of global corporations in the past 5 years due to its always evolving infrastructure and world class facilities. This has resulted in the freeport zone to emerge as one of the top destinations in the world for outsourcing.

Enticed by unmatchable tax incentives, a huge workforce of English speaking college graduates and low labor costs, global outsourcing firms around the world are looking to setup operations in Clark. Office buildings are coming up at an extraordinary rate in an attempt to keep up with the demands of over 100 multinational companies needing additional office space.

Clark is not the only rapidly growing outsourcing destination in the Philippines. Cebu and Bacolod city are also beginning to put their face on the map of the BPO sector in the Philippines. Below is some brief descriptions on the developments of outsourcing hubs in India and other locations in the Philippines to determine if Clark is on pace to become the next global outsourcing hub.

Top Global Outsourcing Hubs Compared to Clark

Manila, Philippines – This city started the BPO industry in the Philippines and as of now has the highest number of BPO companies in the country. The city is filled with different business parks that qualify for economic zone tax benefits to foreign companies.

As mentioned earlier, Manila is overcrowded and will not be able to support the expected influx of multinational companies and not to mention has put an end to some of its tax incentives granted to foreign investors. Clark freeport zone is still eligible for all tax incentives and is building business parks at an astonishing rate. The most recent business park in the works is the new Clark Global City which when finished will have 2.2million square meters of office space.

Hyderabad, India  – While Bangalore might be leading the race as far as office space available in India, Hyderabad is putting up a big fight. With affordable property rates at about 20% cheaper compared to Bangalore it is projected that within 5 years Hyderabad is going to become the new IT outsourcing capital in India. The city is better prepared to handle the outsourcing needs of the world backed by top-notch infrastructure, manageable traffic and uninterrupted power and water supply.

Sound familiar? As Hyderabad is on pace to surpass Bangalore as the number one spot for outsourcing in India, Clark is on pace to pass Manila as the go to spot for outsourcing in the Philippines. The Philippines is already the number one country for voice outsourcing and call center needs. Investors continue to pour billions of dollars into Clark because they already know it is just a matter of time until it becomes the one of the top outsourcing locations in the world.

Keys to Clark Being Next Global Outsourcing Hub

  • Infrastructure. New world class buildings are sprouting up all over the freeport zone every month. With no shortage on space the potential is there for Clark to become the #1 destination for outsourcing.
  • Workforce. Pampanga has tens of thousands of graduates every year with specialized skill sets. The capital of Manila with its 12 million people is just a short distance away and is a common commute for many workers.
  • Property Rates. Clark has the most affordable office space rentals in the country. It is not uncommon to find prices as low as 75% less than what they would cost in Manila.
  • Tax Benefits. The government has made it extremely beneficial for foreign locators to setup their business on Clark economic freeport zone. They will be entitled to tax incentives that can not be found anywhere else in the world.

By analyzing the struggles Manila is having with saturation and high real estate prices along with seeing how Hyderabad is slowly taking over for Bangalore it can be concluded that Clark will be a major player in for the outsourcing industry in the Philippines within the next 5 years. Whether they will be able to takeover as the next global outsourcing hub in the Philippines can only be assumed as true.