The Philippine government has also put in fiscal incentives, to lure private sector investors into the BPO business. "The government allows 100 percent foreign ownership and is currently offering four- to eight-year tax holidays, as well as tax and duty exemptions on imported capital, to service providers setting up in the Philippines, hiring local workers," says Mendoza-Vianzon.

The Philippines seems to have scored higher marks on security issues, as well. "Some U.S. medical-transcription firms refuse to outsource work to India on grounds of privacy, despite potential cost savings of up to 50 percent," The Economist, a U.K. magazine, reported more than a year ago. India's leading leading newspaper, The Times of India, reported in mid-June that India was just about to enact a law "to protect unauthorised use of data provided by foreign companies that subcontracted to Indian firms." The Philippines, on the other hand, has already enacted the neccessary data-protection legislation. "To date, we have not encountered any mention of data security issues from the clients of local BPO service providers," says Mendoza-Vianzon.

Many aspirants

Although the Philippines is culturally closer to the West than India is, this does not, however, in any way pave the way for it to turkey shoot its way to the top, even in areas that require direct human interaction. Although the Filipinos have been watching American television for a longer time than the Indians have (India's state-owned broadcasting authority hardly screened foreign shows until the early nineties) and the Philippines has a tradition of exporting service-oriented workers (Filipino nurses are desperately sought after by the world's hospitals), India, nevertheless, has had a head start in exporting outsourcing services. As a result, the Indians have acquired a lot of experience in managing person-to-person relationships with overseas clients.

Ironically, the two countries have been co-operating as well. This is because other competitors are looming on the world stage, such as low-waged English-speaking countries including Sri Lanka, Jamaica and Pakistan. It is this competition that has been pushing the Philippines and India to snuggle up to each other, in some areas. "Several Philippine service providers have struck up strategic partnerships and alliances with Indian companies," says Mendoza-Vianzon. "If a multinational company that already had a strong BPO presence in India was looking for another country to outsource some of its processes, to reduce exposure to India risk, it is the Philippines that is likely to be the next choice of location."