Philippine IT-BPO Industry Expected to Grow Through 2022
In 2017, the Philippine information technology-business process outsourcing (IT-BPO) industry grew 12.3 percent and generated US$ 22.1 billion in revenue. Growth is expected to continue through 2022, according to the Information Technology and Business Process Association of the Philippines (IBPAP).
“When we forecasted for the most recent Philippine [economic] roadmap, we projected growth — revenue-wise — to be around 9 percent, headcount-wise to be about 8 percent,” said Rey Untal, president and CEO of IBPAP.
Though percentage growth for 2017 was slightly below the previous year’s double-digit figures, Mr. Untal characterized development as still substantial. It remains well above the 5.7 percent growth predicted for the IT-BPO industry worldwide.
The World Bank forecasted Philippine IT-BPO revenue to reach US$ 38.9 billion by 2022. Tholons, a global outsourcing advisory firm, put the figure at 48 billion. Creation of an additional 654,000 jobs within the sector is expected for the same period.
Demand for High-Skilled Labor in the IT-BPO Industry
Advances in technology are expected to change the IT-BPO job landscape. The US, which represents 72.6 percent of the Philippines’ exported goods and services, has invested heavily in knowledge-based process outsourcing (KPOs). This investment ensures the Philippines diversifies beyond back office and call centers, and into more complex services such as legal work, fintech, accounting, engineering and animation. The IT-BPM Roadmap anticipates these mid-skill to high-skill jobs will represent 73 percent of the industry by 2022.
The government pledged a million IT-BPO workers will receive training in these fields within the next few years. In 2016, the Department of Internet Technology (DICT) was formed to develop talent within the sector, as well as improving IT services and digital literacy. Thus far 50 universities have created classes on analytics, internet technology, and service management. In partnership with DepEd, students as young as grades 11 and 12 are already learning the skills for the IT-BPOs of tomorrow. The Philippines already graduates roughly half a million tertiary students each year.
Even as the IT-BPO market expands, industry leaders remain confident of the strength of its current core sectors. Jubert Alberto, business operations head for International Data Corporation (IDC) Philippines, remarked, “…We still have sound macroeconomic fundamentals, a service-oriented labor force good at speaking English, and at this point, the country still has one of the lower labor operations costs in terms of onshore or anything that has to do with BPO, so the core strengths are still working for us.”
The Philippines as the Call Center Capital in the World
For the last decade, the Philippines has been the call center capital in the world. Benedict Hernandez, chairman of the Contact Center of the Philippines (CCAP) says the sector shows no signs of slowing down. He described this as an exciting era for the call center industry. Technological advances will augment, not replace call center workers. Workers are freed of more mundane jobs and can move up the value chain.
In 2017, Google opened a new headquarters in Manila. Amazon recently opened a new call center in Cebu City, creating up to 1000 new jobs.These leading firms go beyond customer service, focusing on “customer experience.” It’s a role Filipinos are uniquely qualified to fill. The Oxford Business Journal described the country’s workforce as loyal, adaptable, authentic, hardworking and naturally friendly. A neutral accent is an additional perk.
According to IBPAP President Untal, the combination of excellent English proficiency, superior customer service, and technology will make the Philippines unstoppable in the global IT-BPO market. “Who else can compete with us?” he said.