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Software Development Outsourcing: The Philippines vs Indonesia

In the digital age, software development has become a core competency for businesses worldwide. Coupled with the rise of globalization, companies are looking for cost-effective ways to meet their software needs. One prevailing trend in the tech industry is the outsourcing of software development to countries with a robust talent pool and affordable labor costs. Among the top contenders for outsourcing software development are the Philippines and Indonesia. In this comprehensive guide, we'll delve into the strengths of each country and evaluate why Indonesia is the best country for outsourcing software development.

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The Philippines: A Closer Look at Software Development


The Philippines, with a population of approximately 100 million, is a prominent player in the Asian software development scene. The country's Gross Domestic Product (GDP) stands at $383 billion, ranking it 32nd globally. Despite a lower GDP per capita of $3,400, the nation has seen significant growth in its tech industry.

Education and Talent Pool

The Philippines boasts over 2,300 universities, producing an impressive number of tech-savvy graduates each year. Around 83,000 students graduate with degrees in engineering and technology, and another 74,000 with degrees in information technology. The country's talent pool is vast, with many individuals having worked for foreign companies at some point in their careers.

Language Proficiency and Cultural Influence

A significant advantage of outsourcing to the Philippines is the widespread English proficiency. The country ranked 20th in the 2019 English Proficiency Index, surpassing India. The country's historical ties to the United States have left a lasting impact, with English being its second official language and American culture influencing many aspects of Filipino lifestyle.

Indonesia: The Rising Star of Software Development


Indonesia, the largest archipelago in the world, is quickly emerging as a hot spot for software development outsourcing. The nation's dedication to technological advancement and digital transformation has positioned it as a strong contender in the global tech scene.

Education and Talent Pool

Indonesia has been investing heavily in education, particularly in the field of Information Technology. The country has a rapidly growing pool of tech-savvy graduates, making it an ideal destination for software development outsourcing.

Language Proficiency and Cultural Influence

Although Bahasa Indonesia is the official language, English proficiency among the younger generation and professionals is quite high. This eliminates the language barrier that often hinders effective communication in offshore software development.


One of the primary reasons why businesses are turning to Indonesia for software development is cost-effectiveness. Indonesian software developers are among the most affordable in the Asia-Pacific region, offering quality service at competitive rates.

Comparing Software Development in the Philippines and Indonesia

Developer Expertise

In the Philippines, over half of the software engineers are full-stack developers, with the rest focusing on front-end development, mobile development, and back-end development. In Indonesia, there's a similar trend, with full-stack developers making up a significant portion of the tech talent pool.

Outsourcing Costs

When it comes to cost savings, both countries offer significant advantages over hiring locally. However, Indonesian developers tend to be more affordable than their Filipino counterparts.

Cultural Similarities and Western Influence

The influence of western culture is more pronounced in the Philippines due to its historical ties with the United States. However, Indonesia, with its growing exposure to global culture and emphasis on English education, is quickly bridging the cultural gap.

Why Indonesia is the Best Country for Outsourcing Software Development

While both the Philippines and Indonesia offer significant advantages for software development outsourcing, Indonesia edges out due to a combination of factors:

  • The country's commitment to digital transformation and technological advancement is creating a robust tech ecosystem.
  • The growing pool of tech-savvy graduates is ensuring a steady supply of skilled software developers.
  • Indonesia's cost-effectiveness is a huge draw for businesses looking to get quality work done within budget.
  • Increased English proficiency and exposure to global culture are helping to eliminate communication barriers and cultural differences.

In conclusion, while the Philippines offers noteworthy benefits for software development outsourcing, Indonesia stands out as the best country for outsourcing software development. Whether you're a start-up looking to build your first app or an established company seeking to expand your software capabilities, Indonesia’s pool of talented, cost-effective, and English-proficient software developers is worth considering.