PH ITBPM posts flat growth in 2020

Published April 23, 2021, 6:34 PM

by Bernie Cahiles-Magkilat

Despite the pandemic, the IT-business process management sector in the country managed to post very modest or flat growth both in terms of jobs and revenues in 2020, but expects strong rebound this year.

In a report, the IT and Business Process Association of the Philippines (IBPAP) said the industry hired 23,000 new full time employees in 2020 or 1.8 percent higher than 2019, bringing the total industry employment to 1.32 million. Industry revenue also slightly grew to $26.7 billion or 1.4 percent higher than 2019.

IBPAP, however, said that based on its survey majority or 87 percent of  companies expects strong rebound of 5-15 percent growth in 2021, with the  remaining 13 percent anticipating flat growth.

According to the IBPAP statement, although the Hospitality and Travel sector was affected by the pandemic, verticals like healthcare, e-commerce and retail, banking, finance and administration, and insurance flourished enough to help propel the industry’s headcount and revenue growth.

With most organizations regaining their momentum by September 2020, the Philippine IT-BPM sector was already able to display signs of recovery by the fourth quarter. There was also a notable upturn in IT Outsourcing (ITO) projects in the latter part of the year as clients invested more in digitization to mitigate prevailing issues caused by the outbreak and as a way to enhance their Business Continuity Plans (BCPs).

“These numbers come as very welcome news for the industry especially with the country’s Gross Domestic Product (GDP) slipping by 9.6 percent in 2020,” said IBPAP President and CEO Rey E. Untal. 

“When IBPAP commissioned the recalibration study in July 2020, we already knew that the far-reaching effects of the health crisis did not spare the IT-BPM sector. The fact that it reached this level of growth by year-end is proof of the industry’s resilience and fundamental role in the Philippine economy.”

Meantime, IBPAP reported that its industry-wide survey, it was shown that 87 percent of IT-BPM companies are expecting to see between 5-15 percent growth in 2021, with the other 13 percent anticipating flat growth. There was also a good number of firms expressing that they have plans to expand in the countryside within the next 12 to 18 months.

A majority of organizations are also saying that hybrid working models will continue to prevail in 2021 and possibly, in 2022 as well. Currently, the IT-BPM sector is able to deliver work and provide service through a 70-30 split between work-from-home and on-site work. Moving forward, this will most likely change depending on company policies, government mandates, and digital capabilities.

IBPAP also found that IT-BPM firms will be prioritizing optimization of existing operations, digital transformation, and the upskilling of their human capital this year.

In a separate recalibration study conducted by the Everest Group, the some strategic imperatives were identified to help the industry achieve its potential to attain headcount growth of 5 percent and revenue growth of 5.5 percent per annum from 2021 to 2022.

These include stronger pivot towards becoming a more digitally enabled nation, one that continues to be globally competitive and relevant as a prime investment destination; expedite investments in talent attraction and development, particularly for Domain and Digital Skills; and, enhance government support and fortify the sector’s role in the formulation of enabling and responsive public policies to create a business-friendly environment.

Everest also identified the need to refresh Philippine IT-BPM’s value proposition and continue positive conversations around the IT-BPM industry through strategic marketing and targeted investor relations initiatives; and to hasten projects in improving and strengthening telecommunications, power, and transportation networks as well as other infrastructures.