Why You Should Reconsider Hiring in the Philippines

With sun-drenched beaches, a warm tropical climate, and friendly people, there’s a lot to love about the Philippines. For businesses looking to outsource, the country also offers significant cost savings and a diverse talent pool across many industries. 

It comes as no surprise, then, that many companies choose to hire in the Philippines for roles like customer service reps, virtual assistants, and developers.

However, for US businesses looking for something a little closer to home, it’s worth exploring whether the Philippines is the best choice.

While the country remains a popular outsourcing destination, challenges like time zone differences and infrastructure concerns have led many companies to reconsider. 

In this article, we’ll explore what makes the Philippines a top hiring destination, the potential drawbacks of outsourcing there, and why more businesses are shifting their focus to hiring remote talent in Latin America (LatAm) instead.

Why US Companies Outsource to the Philippines

The Philippines has been a top outsourcing destination for years. With nearly 115 million people and a 99.27% literacy rate, the country offers a well-educated workforce that has fueled the growth of its outsourcing industry. 

But education alone is only part of the equation and certainly isn’t the main reason businesses choose to hire in the Philippines. 

In fact, several key factors make it an attractive option.

Strong English proficiency

Communication is a major factor in outsourcing, and the Philippines stands out for its high level of English proficiency. English is one of the country’s two official languages, alongside Tagalog. 

The Philippines has an English proficiency score of 578, putting it on par with Poland (598) and well ahead of India (504). 

It’s one of the strongest English-speaking labor markets in Asia.

Cost-effectiveness

Labor costs in the Philippines are significantly lower than in the US. The minimum wage is just $9.26 per day, and even skilled professionals earn far less than their US counterparts. 

For example, a software developer in the Philippines typically earns between $430 and $1,258 per month, depending on experience and location.

Cultural compatibility with US businesses

The Philippines’ strong economic ties with the US have shaped its business culture, customer service standards, and workplace etiquette. 

Many Filipino professionals have remote experience working with US companies and understand communication expectations. Their strong quality of service and professionalism are also shaped by the country’s long history of US-influenced educational structures.

Additionally, outsourcing firms provide extensive training, meaning that employees meet the high standards expected by US clients.

A large, growing, and capable talent pool

The Philippines has a thriving outsourcing industry that spans customer service, IT, creative services, and back-office support. 

The country’s strong workforce development is reflected in its goal to achieve upper-middle-income status by 2026.

Most Common Roles Outsourced to Filipino Workers

The Philippines’ diverse talent pool makes it a top destination for outsourcing across various industries. From administrative support to specialized technical roles, businesses rely on Filipino professionals to handle essential tasks remotely. 

Here are some of the most commonly outsourced jobs:

• Virtual assistants: Virtual assistants (VAs) in the Philippines manage administrative tasks, email correspondence, scheduling, and data entry, offering affordability and strong communication skills.
• Customer support representatives: The BPO sector employs thousands of trained agents providing phone, email, and chat support for US-based companies.
• IT and software development: Some businesses outsource software development such as web design, app development, and full-stack development to the Philippines, a field where offshore developer rates vary widely based on expertise.
• Creative professionals: Filipino graphic designers, video editors, and SEO copywriters support digital marketing, branding, and multimedia production.
• Accounting and bookkeeping: Many companies outsource bookkeeping, payroll, and tax preparation to experienced financial professionals in the Philippines.

Despite the widespread outsourcing to the Philippines, businesses have encountered challenges with time zones, communication gaps, and infrastructure reliability. 

As a result, many are exploring business growth opportunities with nearshore hiring in Latin America, where time zone alignment and real-time collaboration provide additional advantages.

Challenges Companies Face When Hiring in the Philippines

Outsourcing to the Philippines has its advantages, but it’s not without its challenges. Companies looking to hire in the Philippines need to be aware of potential obstacles that can impact productivity, communication, and overall business operations.

The time zone gap

The elephant in the room when it comes to outsourcing in the Philippines is the massive time zone difference. The country is about as far from the US as you can get, making real-time collaboration extremely difficult.

When it’s 9 am in NY, it’s 10 pm in Manila—if you are on the West Coast, that gap is even larger.

While many Filipino remote workers adjust their schedules for US-based clients, they also have personal lives and responsibilities. Expecting employees to work overnight shifts indefinitely can lead to burnout, decreased productivity, and high turnover. 

Striking a balance between company needs and respecting the free time of your remote team can be challenging.

Severe weather and infrastructure issues

In the US, businesses are no strangers to the power of natural disasters, but the Philippines faces some of the most extreme weather conditions in the world. The country experiences an annual rainfall of up to 160 inches (yes, you read that correctly), and power outages have totaled around 107.5 million consumer hours annually in recent years.

While dealing with these challenges is second nature to Filipinos, tropical monsoons and typhoons can cause widespread internet outages, especially for remote workers based on smaller islands. 

Companies relying on uninterrupted workflows may find these disruptions difficult to manage.

Employee retention and brain drain issues

High attrition rates are another major challenge. The Philippines has a job vacancy rate of 35.8%, particularly in the IT and healthcare sectors, due to increased demand and a shortage of skilled professionals. 

The country is also experiencing a brain drain, as many highly qualified workers leave for higher salaries abroad. For businesses, this means that retaining top talent can be a struggle, leading to frequent turnover and disruptions in workflow.

Legal and compliance complexities

Dealing with labor laws, tax regulations, and contractual agreements can be tricky for foreign companies. The Philippines has strict employment protections, making it essential to understand local regulations before hiring. 

Missteps in compliance can lead to legal disputes, fines, or unexpected costs. Many companies partner with local outsourcing agencies to handle these complexities or an Employer of Record (EoR), but this adds another layer of dependence on third-party providers.

While the Philippines remains a leading outsourcing destination, many US companies are exploring nearshore alternatives to sidestep these challenges. 

Why More Companies Are Hiring in LatAm Instead

The Philippines has long been a major outsourcing hub, but many businesses are now shifting their focus to Latin America. 

Nearshoring offers many of the same benefits as hiring in the Philippines while eliminating some of the most significant challenges.

1. Stronger time zone alignment

One of the biggest advantages of hiring in LatAm is real-time collaboration. 

Unlike the Philippines, where the time difference makes communication difficult, workers in countries like Mexico, Colombia, and Argentina operate within US business hours or with only a 1–2 hour gap, allowing for faster responses, smoother meetings, and better workflow continuity.

2. Highly skilled workforce

Latin America has a rapidly expanding talent pool in industries like software development, customer service, digital marketing, and finance. 

Countries such as Brazil have invested over $45 billion in IT and technology in recent years, and the entire region is seeing a 156% increase in interest from US businesses looking for highly qualified professionals.

3. High levels of English proficiency

While the Philippines ranks high in English proficiency, several LatAm countries, especially Mexico, Argentina, and Colombia, also perform well. 

Many professionals have extensive experience working with US companies, making communication natural and clear.

4. Established outsourcing market

Latin America has a well-developed outsourcing sector that serves US businesses across multiple industries. Many professionals have spent years working with American clients, making them just as familiar with US business practices as their counterparts in the Philippines.

5. Competitive costs without the downsides

Outsourcing to LatAm remains highly affordable, with salaries in Mexico, Colombia, and Brazil significantly lower than in the US. Unlike the Philippines, which is facing challenges with labor rates and infrastructure challenges, LatAm offers more stable connectivity and fewer disruptions.

For businesses looking for cost-effective, skilled remote talent without logistical challenges, LatAm is emerging as one of the best offshoring alternatives to the Philippines.

Final Thoughts

The Philippines has been a leading outsourcing destination for years, and for good reason. It has strong talent, and you can reduce your overhead costs by hiring there.

But there’s something to be said for having your team actually working while you’re working. When your VA in Manila is trying to stay awake at 3 am for team meetings, you’re not getting their best work—and they probably won’t stick around long term.

That’s why more companies are shifting to Latin America. Your team is online when you’re online. No more waiting 12 hours for answers to simple questions or trying to coordinate meetings across impossible time zones. When you need to jump on a quick call to solve a problem, everyone’s at their desk and ready to go.

This isn’t just about convenience. It’s about building a sustainable team that can actually collaborate effectively. We’ve seen companies go from struggling with overnight shifts and constant turnover in Asia to having stable, high-performing teams in LatAm who are fully integrated with their US operations.

Want to see how the costs compare? Check out our LatAm vs. US Salary Guide to understand exactly what you’d be looking at for different roles and experience levels.

Or if you’re ready to explore your options, let’s have a conversation. Book a free consultation call, and we can walk through the specific roles you’re trying to fill and what that looks like in the LatAm market.