But accent and cultural adaptability are not the only ingredients of success. Qualities such as education, domain knowledge and training are key determinants as well, especially for higher-end products and services. India is strong in these areas.

The backend

The Philippines is working hard to attract non-personal outsourcing services as well, such as medical transcription, accounting and tax preparation. "With non-personal BPO services, our strength is derived from the similarity of our practices with the U.S. in areas such as accounting, the legal profession and medicine," says Roxas. "For example, our accounting system matches the U.S.'s Generally Accepted Accounting Principles (GAAP) and our university system is modelled on the U.S. system." All this makes it relatively easy for, say, Filipino clerical workers to transcribe medical information that American doctors dictate into a telephone, which is then checked by Filipino doctors, to make sure it conforms with U.S. standards.

Several multinational firms have already set up backend processing operations in the Philippines. Energy giant Caltex International Pte Ltd and household-product manufacturer Proctor & Gamble Asia Pte Ltd (P&G) are examples. Both have outsourced their global accounting and finance functions to Manila, the capital city. "The Caltex Shared Service Centre (CSSC) employs mainly locals to support Caltex business units worldwide," says Marlene Mendoza-Vianzon, research director, IDC Philippines. "The P&G outsourcing centre serves P&G affiliates in Asia-Pacific and North America." A P&G executive was quoted in Forbes saying that a key reason why his company selected the Philippines was its healthy service-orientated culture. "You [just] can't go to any country and expect them to have that [same] attitude," said Randy Reed, vice president of global business services.

Low- to mid-altitude warfare

The Philippines, however, has long way to go before it can match India in providing high value-added services, such as in advanced medical research and complex financial analysis. This is partly because India produces a far larger number of science and engineering graduates and is one of the few developing countries endowed with institutes of higher learning that are comparable with the higher-echelon Western ones. "The Philippine [BPO] industry has acknowledged that India has climbed ahead of the Philippines in the value-added chain," says Mendoza-Vianzon.

"The Philippines has a participation at various levels of the value chain, but most of it is still at the lower end," adds Roxas. But there are areas where the Filipinos have excelled in providing higher value-added services. Telemarketing financial products and services is one example. "This sort of selling requires a seller to engage in a [sophisticated] conversation that cannot be formulated into a script."