Australian SME Micro-Offshoring in the Philippines: Opportunities and Challenges

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An increasing number of Philippine-based business process outsourcing (BPO) centers are targeting Australian small and medium enterprises by offering micro-offshoring services that reduce their costs. This Policy Note examines the sector and considers the potential economic and social gains of this expanding market. While the Philippine BPO sector has competitive advantages for Australian firms, this study found it still has to address several challenges, such as government red tape, poor infrastructure and traffic management, and biased adjudication of labor cases before the National Labor Relations Commission. It calls on the BPO sector to move up the value-added chain and provide more sophisticated services to generate greater labor productivity growth and longer-term lift in living standards.