TECH4GOOD
Monchito Ibrahim
Two sectors helped soften the impact of the pandemic in terms of economic activities so far. First, is the flourishing online businesses that suddenly sprouted in most parts of the country and gig work that resulted from it (think of Grab and Lalamove riders), and, second, is the sustained growth of the Philippine Information Technology and Business Process Management (IT-BPM)services sector. Of course, we should not discount the continued economic contribution of OFW remittances.
In a recent conversation with Jack Madrid, the newly appointed CEO and president of the Information Technology – Business Process Management Association of the Philippines (IBPAP), he highlighted the fact that the sector grew substantially in 2021 with more than 100,000 workers added bringing the total sector headcount to more than 1.4 million workers.
Even with the pandemic, the sector managed to grow two years in a row. In 2020, the sector added a little over 40,000 workers despite the challenges brought about by the necessary shift to a Work-From-Home arrangement in order to continue servicing their clients. What is even more significant is when he pointed out that almost 30 percent of the total headcount, or more than 400,000, are based in the countryside, meaning outside Metro Manila.
According to him, what helped the industry recruit more is the fact that the current IT-enabled services work is on a Work-From-Home (WFH) set-up. This means that companies would not care anymore where the worker is based as long as an acceptable internet connection is available. Which resulted in a lot of opportunities for talents based in the provinces.
With over 400,000 workers based in the provinces, their salaries alone would result in substantial economic activities in the countryside. Assuming an average monthly salary per person of P25,000, that would be a staggering P10 billion monthly flowing into the countryside economy. And, more importantly, the IT-BPM is now able to have access to countryside talents, who otherwise, would remain either unemployed or underemployed despite their competencies because of the lack of decent-paying work opportunities in their provinces. And these are the people who prefer to stay where they are rather than moving to Metro Manila just to find work.
The added benefit for Metro Manila residents is that these people do not have to add to the congestions in the metropolis.
The shift of the IT-BPM sector to the countryside did not happen overnight. It came as a result of a whole-of-government approach involving several agencies particularly DICT, DTI, BOI, PEZA, TESDA and CHED, among others. Particularly, the ICT Industry Development Bureau of DICT headed by Director Emmy Lou Delfin, undertook a program called the Next Wave Cities (now Digital Cities PH) in 2010. This program aimed to transform cities outside of Metro Manila into locations ready to take on IT-BPM locators and allow the expansion of the sector to the provinces to make the growth more inclusive. It has resulted in IT-BPM hubs like Metro Cebu, Bacolod, Davao, Iloilo, Metro Clark, Metro Ilocos Norte, Cagayan de Oro and 25 other cities spread all over the country.
The focus areas of the program are internet infrastructure, talent development, LGU incentives, and the development of a business environment conducive for foreign investors.
It was not just the proactive support of the government that capacitated the countryside for IT-BPM work. DICT encouraged the creation of local stakeholder groups called ICT councils mainly composed of the academe, business sectors, and the local government. More than 80 ICT Councils have been organized and they have organized themselves into a national organization, the National ICT Confederation of the Philippines or NICP. Each of the ICT Councils has created its own development roadmap and works closely with government agencies in their respective regions.
I understand that there are ongoing debates about mandating the return of IT-BPM workers to their respective physical offices in order to create more economic activities. I truly understand the need to bring back the economy to how it was before the pandemic. More street traffic means more economic activities.
But making it very abrupt may not be the best strategy. I assume that a big chunk of the WFH workers in the remote provinces would prefer to stay with the same arrangement and probably would rather quit their current jobs rather than be made to report in the big city operations centers.
And that would result in a significant impact as far as money flowing to the provinces is concerned. What about the impact on the competitive position of the Philippines relative to its major competitors like India? Major Indian players like Infosys and Wipro have already decided to implement a hybrid setup and are fully supported by their government.
How about providing an adequate runway for the industry to adjust? Even on a WFH setup, the sector is already creating significant economic activity in the countryside. What is needed is to further move more jobs to those places.