Outsourcing revenues up, prompting sector to say 2016 goals on track

Posted on January 29, 2015

REVENUES from outsourcing reached $7.1 billion during the third quarter in 2014, 11.8% higher than the figures reported during the same period in 2013. The figure is also higher than the $4.7 billion and $6.1 billion reported in the first and second quarters of 2014, respectively, according to the latest estimates from the United Nations Conference on Trade and Development, and the World Trade Organization.

This infographic compares the service export growth rates of the Philippines with those of the World, Asia and Oceania, and Asian countries where data are available. Commercial service exports cover manufacturing services on physical inputs owned by others, maintenance and repair services, transport, travel, construction, insurance and pension services, financial services, charges for the use of intellectual property, telecommunication, computer and information services, and government goods and services.

Based on indicators such as number of new locators and expansions of existing outsourcing businesses, CEO and President of the IT & Business Process Association Philippines (IBPAP) Jose Mari P. Mercado believes that the Philippines is on track to meet the IT-BPO Road Map 2016’s goal of $25 billion in revenues.

However, it is unlikely that total service exports, which include non-commercial services, will reach the 2014 government target of 12.0% to 12.2% or $24.4 billion to $24.81 billion in revenues. According to Senen M. Perlada, the Department of Trade and Industry Export Marketing Bureau director, the growth rate for total service exports in 2014 will hover around 5%-6%, approximately $400 million shy of the lower bound of the target. In spite of this, Mr. Perlada recognizes the robust growth in the IT-BPO sector, which has contributed largely to total growth this year.

The increasing amount of road shows, sustained interest in services, and the favorable exchange rate contribute to the positive outlook for service exports in 2015, according to Mr. Perlada. -- Samantha Gonzales

Click to enlarge