The IT and Business Process Association of the Philippines (IBPAP) expressed confidence that it will generate $35.4 billion in revenues by the end of 2023 as a result of the growing demand for offshoring work by US companies, persistent talent shortage in North America, and the remote and hybrid employment policy frameworks of the government.
IBPAP President Jack Madrid is strongly hoping that the target revenues for the information technology and business process management (IT-BPM) sector will be attained and even exceeded by the end of this year.
“(The) Philippines is a world capital in IT-BPM” and the “first choice” for offshoring and delivering customer services, he told reporters during the opening of the 15th International IT-Business Process Management Summit (IIS) on Wednesday, Sept. 27 at the Okada Hotel.
Madrid said that the target revenue for 2023 represents a growth of 8.8 percent from last year’s $29 billion.
Contributing 8.4 percent of the country’s GDP also means "that our industry will be even more important to the Philippine economy compared to just 7 percent last year," he said.
Based on its released preliminary data, the IT-BPM sector surged by 8.7 percent in headcount, reaching a total of 1.7 million full-time employees (FTEs) from last year’s 1.57 million employees.
IBPAP said that it is on track towards generating an additional $29.5 billion and creating 1.1 million new jobs by 2028.
Since the start of the roadmap journey, IT-BPM added 257,000 new jobs, standing at 23 percent of the target, with five more years to go. It also added $5.9 billion in revenues since last year, completing 20 percent of the way with five more years to go.
“The growth of the IT-BPM sector in 2023 is not just a statistic; it is a testament to the industry’s resilience, the dedication of its ecosystem of partners, and the continuing competitiveness of the Filipino talent,” Madrid shared.
IBPAP cited factors that continue to propel the growth of the Philippine IT-BPM industry. These include: US companies increasingly redirecting work offshore, with a preference for the Philippines; the persistent talent gap in North America for IT-BPM services; and the supportive remote and hybrid work policies instituted by the Philippine government.
Madrid said that the industry "has grown from plain vanilla contact center services to very distinct verticals including banking, financial services, insurance, health care information management, even creative industries."
He also emphasized that “most of the world is already here, and those that are here – most of them – want to grow their presence even more because they’re happy with the results so far.”
However, Madrid said that “there are also some countries that are not yet here,” emphasizing that the industry is tapping some prospective investors who plan to expand in the country seeing their partners and competitors are already doing business in the Philippines.
The Philippines is next to India as the top one biggest player in the IT-BPM sector. In 2022, India’s IT-BPM industry reached $227 billion in revenues.
Madrid said that the difference between the two countries is the mere size of India’s bigger population. But he highlighted that the Philippines is “like the Swiss Bank of IT-BPM, not the biggest, but I think we’re the best in delivering customer experience.”
Meanwhile, he said that the Philippines "is experiencing a talent gap and job-skill mismatch,” stretching that the issue is talent supply.
To meet the demand, he said that upskilling the workforce would be necessary to increase the country's labor pool.
Additionally, he said that "the opportunity is there and it will be a pity if we don’t take advantage."
Further, this year’s growth is mirrored in the countryside’s robust development where the majority of the companies have expressed a strong and enduring commitment to expand through more locations outside Metro Manila.
Topping the list of most favored destinations in the countryside are Cebu, Davao City, Iloilo, Clark, and Cagayan de Oro.
This commitment does not only contribute to economic growth but also spreads the benefits of the industry to regions that need it and across other sectors like food, logistics, real estate, retail, and transportation, he said.
“The Philippines is not just keeping pace with global trends; we are setting the standard. As we move forward, let us continue to invest in talent, innovation, and inclusive growth, ensuring we remain a beacon of excellence in the global IT-BPM industry. Together, we will reach new heights, fulfill our 2028 targets, and secure a brighter future for our nation and our people,” Madrid said. (Ma. Joselie C. Garcia)