Software Development Outsourcing? The Philippines Might Be Your Best Bet

When choosing an outsourcing destination, there are several factors to consider:

• Time zone differences
• Cultural differences
• Language barrier
• Education
• Government norms
• Cost of employment
• A highly developed IT market

The Philippines is not the first country that you'll think of when you think of outsourcing software development. But many factors make the Philippines a top outsourcing destination for custom software development, especially for businesses in the United States.

This article lists the reasons why the Philippines is one of your top options for outsourcing software development.

The Philippines is a world-class outsourcing destination for your software development because:

High concentration of world-class software development companies

A glance into Clutch reviews will tell that the Philippines is host to many top-quality software development companies.

The Philippines is not new to offshore software development. Many software firms have been operating for two decades now, from the capital of Manila to the city of Cebu, and various areas in the south of the country.

A report by Google Trends shows that the search for software development companies peaked in the mid-2000s, nearly two decades ago.

This signals a long-standing trend of hiring software developments from the Philippines.

The dropped in searches? One could surmise some possibilities: many companies have opted for other countries; or software companies have built enough networks abroad that open web searches are not as frequently used to create new connections.

IT culture is on the rise

In one year, tech startups in the Philippines saw an increase of 179% in funding.

The increase in the demand for tech professionals also triggered an increase in business management and data analytic roles.

Why does this matter? An increase in the number of tech companies and professionals means a larger talent pool.

The Philippines continues to shape up as a source of high-quality talents in technical and non-technical roles. Expect to be able to find a software development company that covers everything from project management to marketing, with a top-notch quality of software development roles in between.

Although the country was previously known for its call centers, these recent strides in tech make the Philippines an even more attractiver destination for software development outsourcing.

In 2017, the Philippines produced 74,000 IT graduates, a figure that likely rose in recent years.

These trends (increase in experienced and young tech professionals) is setting up the Philippines as a competitive choice for international companies that want to outsource their software development.

Near-native proficiency in English communication skills

According to the English proficiency index of Education First, the Philippines ranks 18 among 112 countries that were surveyed for English proficiency.

For many young Filipinos, English is their first language. They grow up speaking it. It is the language of their television, street signs, grocery aisle, and school subjects. Although textured with Filipino usage, the variant of English spoken in the Philippines is based on American English. Moreover, the Philippine Government recognizes English as an official language.

Currently, there are 600 American companies based in the Philippines across different industries. American business owners find it easy to cross the cultural gap because English is a strong bridge they share with Filipinos.

In terms of building software, this means that you spend less time talking and more time building.

Filipinos speak excellent English

On top of excellent writing and comprehension skills, Filipinos are also known for speaking English well.

This has proven to be an advantage in outsourcing software development, where online meetings can happen daily.

The Philippines has been cited as an excellent choice for companies who have no prior experience working with developers in Southeast Asia.

Shift towards STEM

There is an increasing number of new and experienced programmers

The country’s internet infrastructure is undergoing massive improvements

The Philippine high school curriculum has been redesigned to focus on STEM

Faster internet speeds

Between 2017 and 2020, the average internet speed in the Philippines increased by 80 percent. Newer internet infrastructures take credit for the rapid development, with the Philippine government aggressively pushing for more telecom infrastructure.

The government also passed laws so that telecommunication companies can share their infrastructures in order to increase internet speeds.

Low cost of living and good quality of life

The cost of living in the Philippines is less than a third of the cost of living in the United States.

The low cost of living is the main factor that drives software outsourcing costs down.

IT professionals in the Philippines enjoy a high quality of life. A report by the government body Philippine Statistics Authority shows that people who work in tech bring home three times the average wage.

The quality of life of the developers in the Philippines is a contributing factor to their productivity and happiness at work.

Data and security

The Philippines has been a destination for outsourced services for a few decades. Because outsourcing drives a significant portion of the Philippine economy, the government has taken steps to protect businesses engaged in outsourcing.

A foundational law for privacy was passed in 2012, named the Data Privacy Act.

The law applies to organizations and individuals who process data.

For companies who want to outsource their software development, this is an advantage. The Data Privacy Act of 2012 protects trade secrets just as it does sensitive data.

With a well-defined contract, businesses can have confidence that the plans, processes, and tools that they share with a Philippine-based outsourcing partner are protected.

Conclusion

Undeniably, there are drawbacks in terms of outsourcing your software development to the Philippines. Timezone differences and differences in working style may introduce some difficulties.

However, many strong points make the Philippines an excellent place to outsource your software development.

• Competitive costs
• High level of technical skills
• Excellent communication skills
• Support from the government
• Improving Internet speeds