Outsourcing in the Philippines is still cheap

"That we can attract more companies to outsource to Manila because we are talented and cheap enough to do projects for other countries which means a larger economic growth for our country."

i don't think this will happen in the long run.  filipinos are very talented and i believe we have what it takes to succeed in the industry.  however, i believe philippine companies are not as competitive as those from other countries.

why? because no one's left in the philippines;  everyone's in some other country.  i don't see how the local IT industry can compete with a lineup of mostly junior developers with less than 3 years experience.  those are the people who are left here to implement whatever projects are given to the local companies.  that is the lineup that we show whenever we bid for a project against companies from other wealthier countries.

in the end, most of the time, the only thing that we can compete on is price. if you're looking for talent, sadly, you'd have to look for pinoys in some other country.  there's hardly anyone left in manila ....

"I hope it happens soon... really really soon."

yeah same here.  wish i shared your positive outlook keith.  i'm hoping this is just a depression phase on my part =)

it's been really tough recruiting new people lately; the first question that we get 80% of the time is "is this for singapore?"  so frustrating. it's hard to expand if you don't have people ....

anyways the devpinoy site is a really big step in the right direction.  hope the site grows in the years ahead.  good job keith.  we need more people like you here in manila.

I truly wish the best for all Filipino developers in finding more work from outsourcers.   I think that Filipino it workers have a lot to offer and are hard working.

One thing that does need to be understood, is that one can not compare the Philippines to Switzerland.  Wages everywhere in the world are for a large part determined by cost of living, people are paid what the local economy can afford to support.  For one thing while a IT manager may make 1/3, the cost of living in Switzerland is 10x greater.  An average meal can cost 30 euro, a modest home 700,000- million euro.  With one of the worlds highest costs of living, it is understandable that their workers need to earn those levels simply to survive.  That cost they are paid is absorbed by their economy...remember that money comes from somewhere.  The Filipino economy can't support those sort of income levels, so it simply isn't going to happen.  There are also another number of factors involving certain specialities with special skills that drive up the cost of labor.  You will also notice that other high economy countries are not paying their workers those wages including the USA, Canada, Germany, UK, Japan, and Australia.

What Filipinos need to do is look at other similar markets and learn to compete.  One of the best examples is India, however also includes the obvious like Malaysia and Indonesia.  Countries like India and Korea have set up programs to help IT workers and companies compete in the world marketplace.  Much more work is likely to come if the Philippines government starts to offer similar programs and incentives, and this is where the pressure is going to need to be put.  This will draw much more of an eye to the Philippines to be considered for anything other than the lowest cost IT services.

Even India, who has one of the worlds most knowledgeable IT workforces is finding it difficult to compete for "front office" type jobs with major corporations  which are the ones that are the highest paying, with Western Europe and North America.  The reason? Because the highest paying job are front office it management jobs which always will stay in the home countries of the company.  Jobs of lower responsibility, which have no true bearing on technical ability or talent are the ones that companies want to outsource.  It needs to be understood that companies outsource for one reason only, which is to lower costs.  If that can not be achieved, then it will not be done.  Especially considering that there are substantial cost involved in creating offshore facilities or setting up offshore outsourcing which must be made up for in long term savings of IT personnel.  

Wages that any company pays are going to be based off the going rate within that country's economy.  This means as long as Filipino companies pay those wages, no outside company is about to come in and pay higher wages.  That will continue to be the market value of those type of workers no matter their education level.  Keep in mind the goal of any company bringing IT services into the Philippines is going to be to lower existing costs.

It should be realized that on a worldwide level, there is not a shortage of IT talent.  Within the Philippines it is quite the opposite, there is a glut of available talent, making their market value go down.

Misleading information from the Government that the economy is somehow improving since the decline of the US dollar is not deceiving anyone outside of the Philippines.  They see government mismanagement, food shorages for common foodstuffs like rice, violience in southern Mindanao, high poverty, and low professional wages.  Many countries perceive the Philippines to  be too unstable by American and Western European standards even as it continues to grow a more educated workforce.  This makes it hard for any company to consider placing an investment of personnel within the country.  

The USA for one even discourages their citizens from visiting the country, continously issuing warnings.  This coupled with the lack of initiative programs or special IT training programs on the part of the Philippine Government keeps the Philippines from truly being able to compete in the world marketplace for these types of positions.

When the country is percieved as more stable and the government puts more focus on IT programs to draw foreign business and investment, that will be the time that Filipinos will be able to start enjoying an increase in IT market opportunity.

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