The information technology and business process management (IT-BPM) sector has revised upward its projected revenues next year to $42 billion, driven by the continued expansion of global capability centers (GCCs) into the country.

IT and Business Process Association of the Philippines (IBPAP), the country’s leading IT-BPM group, stated that the projected growth in 2026 is five percent higher than its $ 40 billion estimate for this year.

IBPAP also expects a four-percent hike in the number of employees in the industry, growing from 1.90 million this year to 1.97 million next year.

IBPAP President and Chief Executive Officer (CEO) Jack Madrid said one of the key drivers of this growth is higher growth rate for GCCs.

“It's encouraging to see the continuing interest from existing GCCs and prospective GCCs. Not just from the US (United States) but even from markets like Australia and Europe,” he said in a press briefing on Tuesday, Sept. 23.

GCCs are wholly-owned offshore units of multinational companies that deliver a wide range of functions such as customer support, IT, data analytics, marketing, and digital services.

To date, there are nearly 170 GCCs in the country, with at least ten firms joining the sector annually over the past few years.

GCCs accounted for $8 billion or 20 percent of the industry’s total revenues last year.

IBPAP expects this to grow by a much as 10 percent next year.

Madrid said the industry group is banking on the position of the country as the second biggest GCC hub in the world—trailing behind India, which has over 2,000 GCCs—as driver of this projected increase.

“We already have 170 here, and I think there is no limit to what we can do because I think there is way more potential to grow,” he said.

Madrid noted that the Philippines has the talent pool, cost efficiency, and mature ecosystem to continue enticing GCCs to expand into the country.

Jimit Arora, CEO of Dallas-based global research firm Everest Group, said the Philippines will see the entry of more GCCs amid the fallout of the US’ protectionist policies.

Arora said that due to the reciprocal tariffs, companies are more keen on “building resilience in their talent supply chains.”

“It is usually an India plus one label that people are looking at, and the default is to look at the Philippines,” he said.

IBPAP Chief Operating Officer Celeste Ilagan said several GCCs have already engaged with the industry group to expand not just in Metro Manila, but also in the provinces.

“So really very positive indications there that the Philippines is gaining traction in terms of getting more GCCs to locate here,” said Ilagan.

To further entice GCCs into the country, IBPAP is asking lawmakers to craft legislation that would provide incentives to GCCs entering and expanding their footprint in the country.

Ilagan said the industry group is proposing a measure similar to Republic Act (RA) No. 8756 or the Omnibus Investments Code of 1987, specifically the provision on regional operating headquarters (ROHQ).

The law, which has since been amended by the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act and its subsequent amendment, offers corporate income tax incentives, exemption from local taxes and fees, and tax and duty-free importation.

“For GCCs, they are more cost plus. They are cost centers and therefore a different set of incentives will be more important to them,” said Ilagan.

“That's what we are looking to do in the next few months,” she added.