Prevailing perception is that India and the Philippines are competitors in the global outsourced businesses. “Their [trade industry] and ours may be competing, but as a commercial enterprise, we feel that both countries complement each other,” said Ernest Cu, president and chief executive officer of SPI.

This has also been the stand of both Indian and Filipino industry players who graced the e-Services forum in Mandaluyong City last February. Phil Hassey, associate director of research firm IDC Corp., said only 20 percent of the estimated US$1-trillion outsourced businesses are sent to countries outside the US and Europe. The combined market share of India and the Philippines account for only three percent of the total pie. About 30 percent are still destined for the US outsourcing companies and 45 percent for the European players. Thus, Sunil Mehta, vice president of India’s biggest outsourcing industry association, the National Association of Software and Service Companies, said India and the Philippines should see themselves as partners if they want to get a bigger market share.

The Philippines, according to research firm XMG Inc., has an edge in the call center business, largely because of its affinity to the American culture and the English proficiency of its graduates. XMG predicts that by 2008, the call center revenues of the Philippines ($3.6 billion) will overtake India’s ($3.3 billion).

India’s edge, on the other hand, is in the IT services, which include software development and programming. They have about a decade of headstart from the Philippines. Cu noticed that India definitely has a larger labor pool with higher degrees in hard sciences, like engineering, chemistry, physics, and math. But the Philippines also has enough graduates in various medical degrees. Filipinos tend to be better in consistently performing business process outsourcing (BPO) operations day in and day out. “So we mix them up. Even if the development center is in India, the actual processing is done here,” Cu explained.

But because of India’s longer and deeper experience in the outsourcing business, they have produced a wider pool of managers geared for handling outsourced projects. In fact, the Philippines has hired a number of Indian expats to manage Philippine companies engaged in BPO and call center services, according to Puneet Pushkarna, managing director of global outsourcing firm Headstrong.

SPI, for one, hired an Indian to be its chief financial officer. “We wanted someone who could really understand the business and its metrics, and what really drives the outsourcing activities financially,” Cu said. “The Indians have the experience, the exposure, and they know how to structure [mergers and acquisitions] in this field.”

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