I’m making it too simple but an improved economy means more production needs and hence more jobs abound. When more jobs, especially high value-creation jobs are available, the operational “commoditized” work can be more easily justified to be brought off-shore to reduce costs and focus the work-force in the higher-value work.

Really, the biggest challenge to countries which rely on outsourcing is within. The recent spate of underground earthquakes highlighted that cost is not always the determinant factor over reliability of services.

Also, political (read, policy) instability is another major roadblock. This is one reason why countries like Singapore and Malaysia which generally have higher labor costs still enjoy a healthy following.

Hoping that the Philippines can rise up to the occasion.

Of course they don’t want this to happen but it will and they are naive to believe the companies will accept higher taxes without trying to find ways to bring down cost in other areas.

We just posted an article of why doing business in the Philippine is so beneficial on our Call Center Best Practices site.