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Why Silicon Valley should Offshore I.T. Talent to the Philippines

October 4, 2019    |     Marella Gimenez

Silicon Valley: The Global Technohub

Silicon Valley, located in the southern region of the San Francisco Bay area, has long been highly regarded as the global center for high technology, innovation and social media. This technological hub is home to large technology corporations, thousands of tech related start up companies, and the headquarters of over 30 businesses belonging to the Fortune 1000 such as Alphabet (formerly known as Google), Apple, Chevron, Facebook, Intel, and Netflix just to name a few. 

 With all this known, the region has quickly become a dwelling place for great minds, tech savvy businessmen, and entrepreneurs looking to innovate and create the next big idea. Because of the constant influx of businesses looking to make it big in San Francisco, it continues to be the U.S.’ leading region for high tech development and accounts for about one-third of all venture capital investment in the country. On the other hand, the companies and corporations that have already made a name for themselves are always looking to take their businesses further, wanting to expand more outside the borders of their country.


Sunset view of the Golden Gate Bridge and fog from Battery Spencer,  Golden Gate National Recreation Area, in San Francisco, California.

Advantages to FDIs

With any new opening business, this comes with it the usual requirements of looking for the basics such as office spacehiring staff, and getting pre-requisite documents to permit a business to runThis, therefore, makes the Philippines an attractive destination for foreign companies to invest in with its steadily growing economypopulation and numerous outsourcing companies and IT-BPOs to help with hiring staff. 

 Foreign direct investments are always looking for more economies that will give them a friendlier environment to grow in. The Philippines is considered a late comer among the other ASEAN countries in terms of having optimized these FDI inflows. Ihas quickly got its momentum since then, even overtaking Malaysia in attracting FDIs in 2017 and 2018. This resulted in the country generating 10.26 billion dollars in 2017 and 9.8 billion dollars in 2018.  Foreign capital during this recent quarter came from Japan, China, United States, Singapore, and South Korea largely going in to financial and insurance, real estate, transportation and storage, manufacturing, administrative, I.T. and support service industries 

Despite the slow start, this has proven that the Philippines’ economy offers a cultivating environment for foreign businesses to grow in and is reliable in a number of industries due to its abundant talent pool, increasing every year. This gives companies an easier time looking for suitable candidates, whether it be through IT-BPOs or third-party outsourcing companies. The Filipinos’ mastery of the english language also make it easier for FDIs to acclimate to the country and for several foreign companies to communicate directly with the outsourcing providers and the local people without the hindrance of a language barrier. 



Another advantage in having a Silicon Valley business invest in the Philippines is the drastic difference in the cost of living. It is undeniable that the Philippines has one of the lowest costs of living in Southeast Asia compared to San Francisco, with it being considered one of the most expensive cities to live in. For insight in terms of real estate costs, average construction costs in San Francisco are 330 dollars per square foot, compared to the Philippines with its estimated average being 10, 621 pesos ($204.25) per square meter.

Foreign companies from the United States that decide to invest and build a base in the Philippines will definitely be able to cut back on costs while still earning a profit with the perks of the strong US dollar to peso exchange rate. More FDIs will also result in more CBDs to develop in the country. For now, the only strong CBD in the Philippines is Makati city, with BGC and Cebu quickly developing as well. As the real estate for businesses start to get more and more limited in Makati, a wave of new businesses will allow for more CBDs to pop up, spread out and expand.  

There are also numerous work share spaces and companies expanding these CBDs that offer real estate solutions for foreign companies looking for a space to grow in and offer great alternatives in terms of flexible workspace. 

Large Talent Pool

The Philippines also has a rapidly growing population, exceeding 100 million this year and growing 1.5% yearly, that allows for a bigger workforce for a considerably small country. As with any business that generates jobs, there will always be Filipinos looking to join this workforce.

As of January 2018, the Philippines has an employment rate of 94.7% and an estimate of 43.7 million people in the labor force as of 2019. The country is also home to a number ofthe best universities in Asia, ranking high in the Asia University Rankings, assuring that it is constantly producing the best and the brightest critical thinkers. The country was able to produce 325,157 college graduates from state universities alone and 77,747 of those graduates specialized in IT which is what is in high demand in IT-BPOs and otheroutsourcing companiesIt is projected that this is to grow in the coming years due to the high demand for I.T. talent.

 Filipinos are also known to be hard working and resilient, known through people who have had experiences with overseas Filipino workers and a majority are able to speak excellent english making it easier to communicate with a variety of people of different nationalities. 


Digitally-educated Locals

It is also a well-known fact today, that Filipinos are one of the biggest users of social media and even the Philippines being known as a number one user of Facebook. As of July 2016, the internet penetration in the population was 43.5% making the country the second largest Facebook market in Southeast Asia and this social media usage continues to grow to this day. Having a young staff that is up to date on trends and media will prove advantageous to a Silicon Valley business looking to expand in Asia.

 A majority of businesses are looking to take their business online through means such as online marketing, ads, etc. to better develop their company as we are now living in a digital age, where everything can be neatly compacted into a smartphone. Digital marketing has seen a boom over the past few years with several media agencies starting up due to the high demand in the country. Foreign and multinational companies can be able to take advantage of this through outsourcing staff here in the Philippines dedicated to digital marketing as they will also be able to get a feel of the local scene and get themselves familiarized with the market through online means, which in turn results in having a better understanding of the consumers’ needs. 


So if companies in Silicon Valley are looking to expand and build a base in Asia to be able to tap into its market, the Philippines proves to be a suitable choice for outsourcing with its steadily increasing population and talent pool, and a fostering environment for new businesses that will also be able to avail of assistance acclimating to the country through other third party companies that provide workspace and staff.  

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Posted by Marella Gimenez


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