Samarkand, UZBEKISTAN — The information technology and business process management (IT-BPM) industry, the Philippines’ top dollar earner, needs to overcome infrastructure and talent challenges while keeping pace with emerging technologies such as artificial intelligence (AI) to maintain its global competitiveness, according to the Asian Development Bank (ADB).

“Infrastructure costs—including broadband affordability and rental rates—can undermine competitiveness, while talent shortages constrain the [Philippine IT-BPM] sector’s ability to move up the value chain,” read the ADB’s Asian Development Policy Report 2026 titled “Global Value Chains and Inclusive Development,” published last Tuesday, May 5.

For the ADB, “sustaining growth will require continued investment in digital and analytical skills, AI, and automation integration into training programs, improved business environment conditions, and broader digital infrastructure expansion.”

“Addressing these challenges can ensure IT-BPM continues as a cornerstone of the Philippines’ services-led growth and a resilient source of export income in the digital global economy,” the ADB said.

The report noted that the Philippines’ IT-BPM sector is a leading global hub, accounting for around two-thirds of the country’s services exports while employing almost one million workers not only in Metro Manila but also in regional digital hubs.

It also cited that the IT-BPM industry initially grew through voice-based and lower-value business process outsourcing (BPO) services, particularly customer relationship management, but has since expanded into higher-value non-voice segments such as finance and accounting, IT, and knowledge process outsourcing (KPO).

According to the ADB, the sector’s competitive edge is anchored on the country’s young, English-proficient workforce, strong cultural affinity with Western markets, and government support through fiscal incentives, export promotion, and investments in workforce skills development.

Government initiatives have also helped strengthen the industry through training programs focused on AI, data analytics, and other technology-driven capabilities, alongside trade missions and business-matching activities aimed at connecting firms with global markets, the report said.

Philippine authorities have likewise supported the industry by streamlining business registration and tax compliance under the Ease of Doing Business Act of 2018, while offering tax incentives and customs exemptions to attract strategic foreign direct investments (FDIs) into the sector, it added.