5 Reasons to Choose Software Development Outsourcing in the Philippines

Is Software Outsourcing Worth It in the First Place?

Business needs dictate the rules of the software development game. And every so often the best decision that a company can make is to hire an in-house team of programmers that will take care of every issue in the project. However, even though hiring locally and expanding your staff seems like a sound decision that can ensure your company's sustainability, that's not always true. Moreover, in-house engineering teams can hold you back from quite a few riveting benefits that outsourcing of software development grants.

Let's take a look at the table below to discover what you can gain if you reach out to outsourcing companies:

As you can see, there are many advantages that outsourcing can bring to your business. Sure thing, there might be a few drawbacks, such as the possible lack of control and transparency. However, you can remove them from the picture. And here's how:

• Set goals and requirements for the collaboration;
• Allocate responsibilities and establish a clear chain of command;
• Build honest and effective communication with an outsourcing partner and host regular meetings to track the team's progress.

Why Is It a Good Idea to Outsource Software Development to the Philippines?

Now, when you know about the benefits of delegating development to an external team, let's take a closer look at the software development outsourcing in the Philippines. What are the 5 advantages of this destination that make businesses settle down there?

English Proficiency Is High

People in the Philippines know English — that's a solid fact: the official languages of the country are Filipino and English. The report on the EF English Proficiency Index 2021 showed that globally, with their knowledge of English, the Philippines ranks 18th. As to Asian countries, it ranks the 2nd, giving way only to Singapore.

In this day and age, when English is the world communication language, its knowledge is a must. That said, if you choose the Philippines as the destination for software development outsourcing, you'll be able to share thoughts and ideas with your external team efficiently and freely.

The Filipino Mentality Is Close to Western, and Their Soft Skills Are Great

The Filipinos are flexible, adaptable, and hard-working. Any issues that might arise in the process of your collaboration will be more than manageable.

Moreover, the country was a colony of both Spain and the U.S., and thus these two influenced the Philippine culture and mentality a great deal. As a result, the Philippines is the most Westernized Asian country, and for a Western client, it will be much easier to find common ground with Filipino developers. Nobody will have to look for the same page — both parties will already have a bookmark there. And if you settle on a dedicated team, the level of the mutual understanding will simply skyrocket.

* By the way, if you'd like to gather your own dedicated team, feel free to learn more about this type of outsourcing collaboration on our website.

Labor Costs Are Very Affordable

According to Upwork, the average monthly salary of a software developer in Manila, the capital of the Philippines, ranges between $1030 and $2480, with $1700 being the most likely pay. This means that you can expect to pay Filipino software developers about $10/hour or less. In comparison, a programmer in the U.S. makes about $35/hour on average, with the potential of earning as much as $63.22/hour. Do the math: that's quite a difference, isn't it?

The Philippine Government Supports the BPO Industry

Business process outsourcing is the industry that allows the Philippine economy to prosper. It's only natural that the government is willing to create regulations and incentives that would encourage international businesses to outsource. That's why the local government established an organization responsible for fiscal and non-fiscal benefits — the Philippine Economic Zone Authority (PEZA).

According to D&V Philippines, here are some of the fiscal benefits that PEZA provides to the companies that are registered under it:

• 100% exemption from corporate income tax for up to six years;
• Tax and duty-free importation of raw materials, capital equipment, machinery, and spare parts;
• Exemption from the payment of all local government imposts, fees, licenses, or taxes;
• Exemption from expanded withholding tax, and many others.

Two other organizations that support the business process outsourcing industry are the IT and Business Process Association of the Philippines (IBPAP) and Contact Center Association of the Philippines (CCAP).

With such strong government support, the Philippines is a great place to make your business thrive.

Data Protection Laws Are Strong

Since the outsourcing industry is booming in the Philippines, outsourcing software development companies there deal with great arrays of sensitive client information. Consequently, a clear need for effective data protection laws made itself known.

In 2012, the Philippine government has adopted the Data Privacy Act, which was created on the basis of the European GDPR. Its goal is to increase cybersecurity and forbid unauthorized access to personal data. That's why the Philippines is perfect if you need to outsource software development in the banking and healthcare industries, as well as customer service.

Are There Any Disadvantages in Choosing an Offshore Team in the Philippines?

There are only a few disadvantages in outsourcing to the Philippines:

• Periodic natural disasters;
• A great number (18) of holidays per year.

Although it's not possible to establish total control over every unexpected event, you can prepare a plan of how to decrease the risks. For example, it's great if your Filipino partner has several offices spread across the country or allows remote work. Sure thing, this will work only for non-critical situations. However, natural disasters and political instability are something that you can never fully insure yourself against, regardless of the destination.

As to the latter, you can choose an outsourcing company that will adhere to your requirements and have their software development team follow your country’s or the Philippines’ holidays.

Phinal Thoughts

It's a big decision to entrust your software development project to someone else. However, it's not just about a company — it's also about a country. You have to make sure that the laws of your outsourcing destination are welcoming enough, if possible — even contribute to your business prosperity. That's the base. And if you can spice it up with good English, great communication skills, and affordable rates, you get the perfect recipe of a top-tier outsourcing pie.

What country serves a pie like that? The Philippines.

So, how about taking a bite?

If you need any clarification about outsourcing of software development, please feel free to contact us! We're open for consultations and partnerships.2