What Are the Outsourcing Rates in the Philippines?

Find out how much you can save with the Outsourcing Rates in the Philippines. Outsourcing in the Philippines is a strategic decision taken by most worldwide businesses because the region provides affordable services and high-caliber staff. Knowing the intrinsic cost that comes with outsourcing is vital if you want your business to be able to optimize budget allocation on operations and enhance the quality of services rendered.

Standard Outsourcing Rates in the Philippines

In the Philippines, home to a very strong BPO (Business Process Outsourcing) industry, services vary from call centers, data entry, and more complicated work like software development and administrative support. Outsourcing cost varies across the service type. For instance, beginner work in customer service or data entry may receive lower salary allocations per month compared to special services like software programming. Despite that, the cost is still affordable globally, especially when production is compared with countries like the United States or United Kingdom.

If you’re looking at administrative roles, see our back-office support services to understand how pricing works for data entry, transcription, and more.

Pricing Models in Outsourcing

There are varying price models when it comes to outsourcing:

• Hourly Rate: This is the best price model if you want the business that requires short-term services or any flexible services. Hourly charges will be between the price of $8 and the price that is valued at $45, with the price often determined by the complexity level of work needed.
• Project-based Pricing: For know work or work that is project-based, the price is given project-based.
• Full-time Equivalent (FTE): It ensures business avails specialized people as the price is taken on a monthly basis or every year. This is often utilized on prolonged work like customer support work or administrative work.

Here is the table showing the average 2025 outsourcing levels in the Philippines by job function; prices vary by industry and function of work:

These are rough estimate prices that can fluctuate by the particular service requirements, staff level, and price schedule of the outsourcing firm.

Reality check: In 2025, Philippine CSR salaries average about ₱21k/month, which translates with the same money when facilities, team leads/QA, security/compliance, and provider margin are factored in, as part of the same vendor program bids. It’s why quotes then are always 2–3× the take-home salary, but normal market-wide through the BPO markets.

How To Calculate Outsourcing Costs and Savings

1. Identify the Business Function To Outsource

First, decide which areas of your business will be helped the most by outsourcing. Typical functions are customer service, information technology support, and financial services. It should be determined in line with strategic intentions and the possibilities of economy and quality enhancement.

2. Find Total In-house Cost

Calculate the service management cost in the home country. In calculating, consider the direct and indirect costs including employee salary, benefits, training, infrastructural, and technological costs.

Here is an example table breaking down the possible expenses associated with retaining a business process in-house versus contracting out.

These are representative figures that represent how one can save money on a number of categories typically linked with keeping things in-house. All these categories represent high saving potential when one goes for outsourcing, including the savings on reduced requirements of physical infrastructures, direct employee charges, and connected operational costs.

Detailed Cost Comparison

Outsourcing is very cost-effective compared to in-house recruitment. For instance, customer service work sent to the Philippines will generally be between $8 to $14 per hour, whereas in-house staff in Western nations will be between $20 and $30 per hour or even more. An open-ended cost comparison will show that one can achieve up to 70% cost savings on operational expense by outsourcing customer service, data entry, or information technology support work.

Take into consideration costs like:

• In-house Pay: $50,000 annually as the in-house staff pay
• Outsourcing Pay: $15,000 annually for the purpose of outsourcing one employee

By outsourcing, a company can save around $35,000 per year per employee.

3. Calculate the Total Cost of Outsourcing

This is inclusive of the rate of outsourcing that the Filipino outsourcing firms impose, including the monthly remunerations of Filipino labour, administrative charges, as well as any incidental expenses on the transfer of services overseas.

4. Deduct Outsourcing Cost from In-house Cost to Obtain the Saving

The cost differential between handling these functions in-house compared to having them done in the Philippines is your hard cash saved. This figure frequently persuades businesses that the money works on the audit trail as far as the calculation goes.

Cost Breakdown Compared:

• Calculate Dollar Saved from Outsourcing: Begin with the in-house expense you save money on by outsourcing.
• Calculate Total Cost of Outsourcing: Accumulate all the outsourcing-related costs.
• Calculate Total Cost Savings: Reduce the total cost of outsourcing from the money saved.

For instance:

• Total Saved from Outsourcing: $590,000
• Total Cost of Outsourcing: $285,000
• Total Cost Savings: $590,000 – $285,000 = $305,000

So your actual cost savings are $305,000. This breakdown gives you the clear money advantage of outsourcing over in-house operations.

What Are the Factors That Affect Outsourcing Rates in the Philippines?

Workforce Costs

Affordability is one reason why Filipino labor is cost-effective, as the cost of living back home is lower compared to a majority of Western nations. It then enables local BPO businesses to provide competitive pricing without the quality suffering. For example, the customer service can be sent out of the country, and the price can be lowered substantially, still providing high levels of service.

Service Fees

These can vary a lot with the kind of tasks and the level of expertise needed. For instance, a simple customer service can be cheaper compared to a technical support that needs certain skills and specializations.

Government-mandated Benefits

Pursuant to the Philippine Labor Code, the employer is mandated to grant specific benefits when dealing with employees. However, in the case of BPO outsourcing, your partner will generally shoulder these expenses under the payroll obligations. It is helpful that you talk about each particular advantage in person with your BPO partner just to have better information on these.

Night Differential

It works on a different time zone compared to the majority of the Western world (e.g., 15 hours ahead of Arizona and 12 hours ahead of D.C., Washington). In the event that you need your offshore staff to work along with your local work schedule, they are also on the right to night differential pay, which is at least 10% of their base pay for work covered under the nighttime scheme.

13th-month pay

The 13th-month pay is required for all employees and is mandated by the Philippine Department of Labor and Employment. This bonus is equivalent to one-twelfth of an employee’s basic yearly salary. It is typically paid at the end of the calendar year, with the amount being prorated based on the date the employee started within the year.

Social Security System (SSS)

Both the employee and the employer pay towards social security, currently at the level of 15% of the employee’s salary (5% by the employee and 10% by the employer). Their levels will be raised to 15% by the year 2025.

PhilHealth

Contributions to the Philippine Health Insurance Corporation (PhilHealth) are at 5% of the employee’s basic wage as of the year 2020. Most companies also opt to complement this with personal health coverage as part of providing more extensive coverage.

Pag-IBIG

The Home Development Mutual Fund, better known as Pag-IBIG, is a government program designed to provide Filipino workers with savings and loan options, primarily for housing. Employers are required to contribute 2% of an employee’s basic salary to Pag-IBIG, facilitating long-term savings and loan benefits for employees.

These costs are typically managed by the outsourcing provider, meaning businesses don’t need to handle these additional expenses directly.

Economies Due to Specialization

And although the procurement can provide significant cost savings, one should factor in possible hidden costs, including:

• Transition Costs: They are one-time expenses associated with the initial installation, such as training and litigation expenses.
• Communication Costs: Overseeed team management could raise communication expenses, such as project management software or greater time spent on collaboration.
  Companies need to consider these additional expenses when estimating aggregate saving.

Businesses should factor in these additional costs when calculating total savings.

Quality of Workforce and Time Zone Premiums

One of the Philippines’ strongest advantages is the high quality of its workforce. Filipino workers are known for their proficiency in English, cultural adaptability, and dedication to work. Additionally, the time zone difference can work in your favor, allowing businesses to provide 24/7 support without extra staffing costs.

Delivery note – Cebu/Metro Manila

For back-office and voice, Manila and Cebu are the Philippines’ strongest English-speaking talent pools, with convenient ANZ overlap (UTC+8) and telco redundancy in business hubs (e.g., Oakridge / IT Park). In case you require U.S. prime time, combine a PH night shift Tier 1 shift with a small LatAm pod for escalations.

The bottom line

Outsourcing levels in the Philippines are determined by a number of factors ranging from the service type and the quality of the labor force to the need for regulations and cost of living. For companies that want to outsource, the Philippines is a combination of quality and affordability that is difficult to compete with. Knowing the factors that make up the cost of outsourcing and the factors that will make these levels, businesses can make the best decisions that will result in high levels of cost reduction and improved efficiency.

This definitive guide offers businesses a straightforward path towards grasping and capitalizing on the economic benefits of outsourcing to the Philippines. Be it customer service, information technology support, or any other unit, the affordability and process efficiency are strong reasons why the Philippines must figure prominently as a destination for outsourcing.

Frequently Asked Questions (FAQs)

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