Reading time: 2 min
The Philippines is fighting to maintain its position as the world’s second-largest provider of IT and business process management services, even as neighboring countries Vietnam and Malaysia intensify their efforts to capture a larger share of the lucrative global outsourcing market.
Regional Competition Heats Up
Jack Madrid, president and CEO of the IT and Business Process Association of the Philippines, remains optimistic (International IT-BPM Summit 2025 ) about the country’s prospects but acknowledges the growing competitive pressure from regional rivals. While India continues to dominate as the top global provider, the battle for second place has become increasingly fierce across Southeast Asia.
Vietnam has emerged as a particularly formidable challenger, leveraging its lower labor costs and improving English proficiency to attract international clients. The country has been aggressively marketing itself as an alternative destination for companies looking to diversify their outsourcing strategies beyond traditional hubs like Manila and Cebu.
Malaysia, meanwhile, has been positioning itself as a premium destination for high-value IT services, capitalizing on its multicultural workforce and established infrastructure. The country’s strategic location and strong government support for the digital economy have helped it secure contracts from major multinational corporations seeking regional service centers.
Philippines’ Defensive Strategy
Despite the mounting competition, the Philippines retains several key advantages that have helped it maintain its market position. The country’s large English-speaking workforce, cultural affinity with Western markets, and decades of experience in the BPM sector continue to attract global clients.
The Philippine IT-BPM industry has also been evolving beyond traditional call center services, expanding into more sophisticated offerings such as software development, digital marketing, and knowledge process outsourcing. This shift toward higher-value services helps differentiate Filipino providers from lower-cost competitors in the region.
What’s Next for Asia Pacific
The intensifying competition reflects the broader growth of Asia Pacific’s digital economy and the region’s increasing importance in global technology services. As companies worldwide continue to embrace digital transformation and seek cost-effective solutions, the demand for IT-BPM services across the region is expected to grow significantly.
For the Philippines to maintain its competitive edge, industry leaders like Madrid recognize the need for continued investment in workforce development, technology infrastructure, and service innovation. The outcome of this regional rivalry will likely reshape the global outsourcing landscape for years to come.
