The ASEAN Economic Community 2015, also known as the 2015 ASEAN integration agreement, is an economic blueprint drafted by the ASEAN members to establish a regional integrated economic community. All member states will be subject to a “single market and production base” which will allow the free flow of goods, services, and investments, as well as the freer flow of capital and skills in the ASEAN region. However, this blueprint has been viewed by many as a looming threat to the BPO industry in the Philippines, which is slowly crippling India as the leader of the BPO industry in Asia.

The study conducted by the Asian Development Bank concluded that member states will meet different challenges including labor migration and fierce competitions between the Asia-Pacific neighbors. The Philippines as the emerging leader in BPO industry will expect a heavy blow of economic loss because of the aggressive competition, and may slow down or decrease the country’s economic growth.

Tholons Inc., a leading US-based globalization and investment advisory firm, named the Philippines the second largest outsourcing destination in the world, in which India has a narrow lead over the Philippines as the top choice destination. According to the published article, the Philippines’ BPO industry has grown tenfold from US $1.55 billion in 2004 to $15.5 billion in 2013. It is also expected that this figure will proliferate as the Philippine government has invested heavily to further develop the industry.

However, as a result of intense competition between ASEAN nations, the ASEAN Economic Community 2015 agreement is expected to hinder this growth. As an illustration, international companies may rationalize offshoring to ASEAN member states, as lowering trade and employment barriers in the region has been unloosed because of the agreement.

On the other hand, despite the different challenges posed by the ASEAN Economic Community 2015 agreement, the Philippines remains to have the upper hand in the region, as it already cemented its credentials in the international trade. In addition to that, the country has dominant characteristics, which lure a lot of offshoring companies compared to its neighboring ASEAN nations such as: linguistic and cultural compatibility, lower labor cost, which are the main reasons why international companies outsourced their service. The full support of the government in developing the industry through proper legislation and improving the country’s infrastructure sector widely contributed to the long-standing sustainability of the BPO industry.