The Philippine IT-business process management (IT-BPM) sector has warned that the potential of rising wages in the country is a threat to the industry’s cost-effective advantage. Contact Center Association of the Philippines (CCAP) Managing Director Rosario Cajucom-Bradbury shared insights at the recently-concluded Contact Islands Conference in Cebu with the theme “Threats or Opportunities? Why the ‘Heart of CX’ is Beating More Stable than Ever”. According to Cajucom-Bradbury, the Philippines is no longer “just labor arbitrage” but clients look at the quality of experience and work  delivered. She emphasized that labor cost is just one of the many factors that clients look at when signing up for contact center or BPO services across the globe. It could be recalled that the P40 daily wage hike in the National Capital Region took effect on July 16 this year, bringing the daily minimum wage in NCR from P570 to P610 for the non-agriculture sector and from P533 to P573 for the agriculture sector, service, and retail establishments employing 15 or less workers, according to the National Wages and Productivity Commission (NWPC) despite an appeal filed by a coalition of labor organizations. “The Philippines is no longer just a labor arbitrage. Clients look at the
quality of experience and work that are rendered. Customer experience covers the quality of care and assistance delivered,” she explained. Thus, she said, Filipino agents always stand out. “They are outstandingly customer-centric. Their empathy enables them to go the extra mile when serving customers. This is why the Philippines has always been the ‘heart of CX,’, she added. The local contact center sector has set a yearly annual revenue target of $59 billion by 2028—about $49 billion of which is expected from CCAP- member organizations. As an indication of its strength, the sector posted actual revenues totaling $27 billion, accounting for 84 percent of overall IT-BPM industry revenue of $32 billion. Cajucom-Bradbury further cited the forecast workforce growth of the sector—2.3 million full-time employees (to be accounted for by CCAP-member firms) out of the 2.5 million employment target of the entire IT-BPM industry by 2028. While the industry is confident of meeting these targets, it is also facing some concerns. Aside from potential wage hikes, the industry is facing technology advancements, like the generative AI, skills, and policy issues. “We are confident that the target employment figure will be achieved
even with the emergence of generative AI (artificial intelligence),” she said. Contrary to common assumptions, she said that CCAP believes that the new technology will bolster the sector’s productivity instead of threaten jobs. “Generative AI can enhance the strengths of our Filipino agents who can then focus on active listening and become more empathetic and engaging when rendering service to our customers,” she explained. Cajucom-Bradbury also pointed out that agents are continuously being upskilled to further equip them with the right knowledge and skills amid the evolving nature of jobs across the sector and the industry. “Agents can be redeployed and upskilled to make them always relevant to the future business model,” she said. The IT-BPM industry is also undergoing changes on how companies operate especially in the new normal. In 2022, the Department of Trade and Industry  has allowed transfer of registration of industry firms from the Philippine Economic Zone Authority to the agency’s Board of Investments to allow 100 percent work-from-home arrangements with employees. “The hybrid business model is becoming popular within the IT-BPM
industry. But it is a constantly changing setup. At the end of the day, the working setup will still depend on clientele preferences. Some clients are fine with the work-from-home setup of agents, while others require working at the office to ensure confidentiality and data privacy. There’s room for flexibility,” shared Cajucom-Bradbury. The IT-BPM industry, particularly the contact center sector has been aiming to help decongest Metro Manila and bring equally promising opportunities to agents in key digital cities nationwide. “We make sure the 2028 roadmap facilitates inclusive growth into the provinces,” Cajucom- Bradbury said. The DICT has identified 31 digital cities across the country that contact center firms are eyeing for their next investments. Based on a survey among CCAP-member companies, Metro Cavite tops the list of cities for nationwide expansion. Also in the list are Metro Rizal, Puerto Princesa, Batangas, Iloilo, Calamba (in Laguna), General Santos City, Tarlac, Zamboanga, Dagupan, and Cagayan de Oro, among others. Cebu and Davao are still among the favorites.