H-1B Visa: Threat to Philippine Outsourcing or Catalyst for Change?

Global policy shifts are reshaping the outsourcing landscape as the United States tightens rules on skilled foreign labor.

U.S. President Donald Trump recently signed an executive order imposing a USD 100,000 fee on new H-1B visa applications, a move expected to raise costs for companies that rely on international talent. The policy could alter the dynamics of the global outsourcing market, where labor mobility and cost efficiency have long been key advantages.

According to Everest Group CEO Jimit Arora, the largest users of H-1B visas include Microsoft, Meta, and Google, along with major Indian outsourcing firms. He noted that, alongside ongoing geopolitical tensions and tariff disputes, these developments are pushing multinational corporations to rethink their outsourcing strategies and build more resilient talent ecosystems.

The Philippines, now home to 170 global capability centers (GCCs), stands to gain as companies look to diversify beyond India. The country’s strategic location and English proficient workforce have positioned it as a regional outsourcing hub for markets across Japan, Australia, Taiwan, and Singapore.

Call Centers Under Scrutiny

Proposed U.S. legislation the Keep Call Centers in America Act of 2025 adds another layer of uncertainty. The measure aims to incentivize domestic employment by limiting access to U.S. federal contracts for companies that offshore customer service operations, potentially dampening demand for overseas call center services.

While acknowledging the risks, Arora underscored the broader implications of such policies.

“This will impact not only the Philippines but also India,” he said. “It will affect the earnings of U.S. companies, with potential domino effects on the stock market and the wider economy. That’s why we’re already seeing significant lobbying from large U.S. conglomerates that view the bill as harmful to business.”

Arora added that the proposal remains in its early stages and faces strong opposition from U.S. based companies, which could slow or block its passage.

Catalyst or Sign?

For the Philippine IT-BPM industry, the latest U.S. visa and labor measures could serve as both a warning and an opportunity. On one hand, stricter H-1B rules may disrupt traditional outsourcing flows and push global firms to localize operations. On t

he other, they may open new doors for the Philippines to capture a larger share of offshore services especially if it continues to strengthen its talent pipeline, digital capabilities, and AI readiness.

Whether this moment becomes a catalyst for transformation or a sign of vulnerability will depend on how quickly the Philippines adapts to the changing global talent equation.