DTI remains bullish on services exports

Published November 17, 2019, 12:00 AM

by manilabulletin_admin

By Bernie Cahiles-Magkilat

Trade and Industry Secretary Ramon M. Lopez said there is no need to revise the government’s exports growth forecast even if the IT-business process management sector has reduced growth target for the period 2020-2022.

Lopez said the services sector has remained robust and there is no need for the Export Development Council to recast exports growth target under the Philippine Export Development Plan (PEDP).

“We are still bullish in that sector,” he said.

In fact, the IT-BPM sector still retained its attractiveness and it still receives continued government support. The IT-BPM sector accounts for 35 percent of total services exports and about 9 percent of services in GDP contribution.

Data from the Philippine Statistics Authority showed that exports of services grew by 8.1 percent in the third quarter of 2019, higher than the 1.9 percent recorded during the same period in 2018. Travel was the highest contributor to the growth with 34.9 percent growth. Other contributors to growth were miscellaneous services, 0.9 percent; transportation, 0.8 percent; and insurance, 3.9 percent. Meanwhile, government services declined by 2.2 percent.

The PEDP 2018-2022, a continuing plan of the previous PEDP (2015-2017) aims to achieve the export target of $122 billion-$130 billion by the end of President Duterte’s term.

Earlier, the IT Business Process Association of the Philippines said an updated industry roadmap showed that the IT-business process management industry is projected to grow at slower pace both in terms of revenues and manpower headcount in the next three years (2020-2022).

A study by the Everest Group, which seeks to recalibrate the growth projections in the original roadmap, showed two scenarios.

The best scenario points to a growth in revenue generation of 7-7.5 percent, slower than the 8-9 percent growth in the original ITBM Roadmap. This should translate to revenues reaching $32 billion by 2022 from $30 billion in 2021 and $28 billion in 2020. For 2019, the industry is expected to improve its revenue to reach $26 billion from $23 billion last year.

The worst scenario is at a slower pace of growth at 3.5 percent where revenue generation by 2022 is expected to reach $29 billion only; from $28 billion in 2021 and $27 billion in 2020.

In terms of headcount, the best scenario showed a slower 7 percent growth in full time employees (FTEs) to total industry employment of 1.57 million by 2020 or an average of almost 100,000 new hires annually in the next years. By 2020, jobs in the industry could grow to 1.33 million from 1.29 million this year. Industry employment is also expected to improve to 1.7 million in 2021.

Under the worst case scenario, the industry FTEs could only reach 1.42 million by 2022 from 1.37 million in 2021 and 1.33 million in 2020. This year, the industry employs 1.29 million.