The business process outsourcing (BPO) industry of the Philippines, described by Oxford Business Group (OBG) in its “The Report: The Philippines 2017” as “an economic powerhouse” and “one of the largest white-collar employers in the country,” has been thriving on a confluence of favorable factors. “It benefits from over a decade of pro-investment government policies, a young and well-educated work force, and rising foreign investment in both third-party contact centers and global in-house call centers (GICs),” OBG says.
The first factor the research firm mentioned — pro-investment government policies — is particularly important. According to Industry.gov.ph, a Web site of the Department of Trade and Industry and Board of Investments that aims to serve as the central portal on industry policies, programs and initiatives affecting major sectors of the economy, the Philippine government is providing the information technology and business process management (IT-BPM) industry with one of the best investment environments so that it can operate productively.
“For instance, the Board of Investments (BoI) provide[s] income tax holidays, tariff reductions in capital equipment and streamlined business registration and coordination procedures for non-voice and knowledge process outsourcing enterprises which produce original content. The Philippine Economic Zone Authority (PEZA) also provides an incentives package for IT-BPM businesses, including voice-based services in its scope of qualified investors. Aside from better coordination procedures with government, IT-BPM enterprises benefit from a sound telecommunications infrastructure in the country as well as a stable pool of skilled professionals in urban cities, where the population base is growing at stable replacement rates. These conditions assure that businesses can conduct their activities within a stable macroeconomic and investment climate,” the site says.
Citing data from IBM’s “Global Location Trends 2010” report, OBG notes that the Philippines has been the leader in global voice and call center services since 2010. “That year, data from the Contact Centre Association of the Philippines (CCAP) showed employment in the industry reached 350,000 against 330,000 in India, while segment revenues stood at $5.7 billion that same year versus $5.5 billion in India,” it says. OBG adds, “Figures have since increased to 686,000 Filipinos employed and $11.7 billion in revenue in 2014. The industry, which also includes customer support, software development and financial services, has risen to become one of the fastest-growing sectors in the country in recent years.”
In 2016, the revenue of the IT-BPM industry came in at $22.9 billion, and the number of employees working in it totaled 1.15 million, OBG notes. The research firm says US ource, a small group providing clients with outsourcing needs, expects BPO revenue to more than double, reaching $55 billion in 2020.
The Information Technology and Business Process Association of the Philippines (IBPAP), which serves as a one-stop information and advocacy gateway for the industry, has created a road map for accelerating the growth of the IT-BPM industry until 2022.
“The Philippine IT-BPM Roadmap 2022 is all about accelerating the growth of the PH IT-BPM industry — strengthening domain expertise and capabilities in the emerging sectors, leveraging advancements in technology and ensuring the Filipino talent is future ready. As we see rapid innovations in the areas of digital transformation, artificial intelligence, big data and analytics and evolving delivery models, it is imperative that the IT-BPM Industry evolves with the changing demands of the market to remain competitive and maintain its position as a destination of choice for IT-BPM Services,” the association says.
Among the specific goals identified in the road map are the following: generation of 1.8 million direct jobs, 7.6 million direct and indirect IT-BPM employment and 500,000 jobs outside of the National Capital Region; increasing industry revenue to $40 billion; and capturing a 15% share of the global IT-BPM market.
Tech-driven changes might stand in the way of achieving the job targets, though. In a BusinessWorld report published last month, the Contact Center Association of the Philippines (CCAP) has reiterated push to re-skill employees to prevent job losses that new technologies that can perform low-end jobs may cause. “To be able to keep jobs, to maintain growth levels of the industry, and to further build more jobs, we need to re-skill people,” Infosys BPO Philippines Country Head Ma. Rhodora Campos was quoted as saying in a statement.
In a separate statement, Jojo Uligan, president of CCAP, said: “We need to continue the education, the partnership, the collaboration so everybody will understand exactly what we need to do as an industry, as a country to be able to capture the growth and to be able to capture new potential business opportunities.”
Still, OBG remains positive. “Although rising levels of automation and advancements in robotics and artificial intelligence pose a threat to low-level BPO jobs, strengthening development ties between industry and academia should see growth in high-value-added BPO positions over the medium term,” the firm says. — Francis Anthony T. Valentin