Economy



By Roy Stephen C. Canivel, Reporter


BPO sector sees revenue of $38.9 billion by 2022




Posted on October 28, 2016


THE Information Technology and Business Processing Association of the Philippines (IBPAP) expects the industry to grow in the next six years, earning as much as $38.9 billion in revenue by 2022 as it expands its reach in the global market.

IBPAP released yesterday its latest six-year industry road map, citing a shift towards middle and high-level jobs and a diversified portfolio pointing to the industry’s increased ability to service many segments.

“From a global market perspective, we’re going to go from 12.6% market share in 2016 to 15.5% in the next six years. I think that’s a significant growth. The global market is growing at around 6% and we’re going to get a bigger share of that market,” Manolito T. Tayag, vice-chairman of the association’s Board of Trustees, said in the Roadmap 2022 launch, referring to the global sector growth of 5.6% in 2022.

However, IBPAP said that the Information Technology and Business Process Management (IT-BPM) industry would grow much slower compared to the last six years, with the local compound annual growth rate (CAGR) seen at 9.2% from 17% previously in light of “a larger base and a backdrop of slower global growth in the sector.”

Voice revenue is projected at up to $22.2 billion, or more than half of the entire market in 2022. This revenue will be generated by contact centers, business process and outsourcing, global in-house centers (GIC), and health care.

The services portfolio of the industry will also be diversified with the share of non-voice services seen at 42% of total services in 2022 from 34% in 2016.

The structure of the work force will also shift to cater to more complicated requirements as the industry plans to climb the value chain.

Some 73% of the work force will be engaged in medium and high-level skilled jobs in 2022 from just 53% in 2016. The share of low-skill jobs, which currently make up nearly half of the entire work force in 2016, is seen falling to only 27% by the plan’s end-period.

Faster development is also expected outside the National Capital Region, with an 11% projected CAGR in terms of jobs, compared to 7% within the NCR.

IBPAP expects the full-time work force to expand to 1.8 million by the end of the period.

The current road map, which ends this year, is on track. So far, total revenue of the industry is $22.9 billion, close to its year-end target of $25 billion.

The industry is also close to reaching its work force target of 1.3 million, with around 1.15 million locals currently employed in the industry.

These gains are within sight as long as the country satisfies certain “enabling conditions,” namely: an upgrade in the talent ecosystem, competitive incentives and regulations, developed infrastructure in next-wave cities, sustained high business confidence, a pivot towards high-value services and a strengthened industry association.

Department of Information and Communications Technology Secretary Rodolfo A. Salalima assured the industry that the government will remain supportive while reminding everyone to “forget about the political noise.”

“It is clear that the creation of the DICT will make the country a prime spot for the BPO industry and we assure you that the same objective and mandate of our department will remain and be pursued,” he said in his speech during the road map launch.

IBPAP issued a statement last week seeking an audience with President Rodrigo R. Duterte after he announced a pivot to China, potentially alienating the industry’s US-heavy clientele.

Asked about the main points of discussion in the prospective meeting, which was yet to be scheduled, an IBPAP trustee told reporters that the association will discuss the fundamentals of the industry, particularly on its role in countryside development, policy agenda, and upgrading the talent pool.

“We have a couple of things that we want to bring up to the president. First is to reiterate that we are his biggest partner when it comes to countryside development,” Catherine S. Ileto, IBPAP trustee, told reporters in the press conference for Roadmap 2022.

When asked to explain the timing of the scheduled meeting, she said: ”It’s a practice of IBPAP to hand over the road map to the President.”

Benedict C. Hernandez, chairman of the executive committee of the IBPAP, declined to comment on whether the association will ask the President to tone down his rhetoric.