Sustained Growth Momentum for Philippine IT-BPM Sector

By IBPAP

The IT and Business Process Management (IT-BPM) industry has been, for over a decade, providing millions of Filipinos across the nation with better employment opportunities. By continuously attracting more foreign investors to locate to and expand in the Philippines, the sector has grown to become one of the country’s major economic growth drivers.

Though the industry continued to face challenges brought about by geopolitical developments like protectionist sentiments, uncertainties in government policies, and disruptive technologies such as artificial intelligence and intelligent automation, the sector was able to sustain its growth momentum by year-end of 2019.

According to the IT and Business Process Association of the Philippines (IBPAP), the number of full-time employees (FTEs) in the country increased by 71K in 2019, bringing the total industry headcount to 1.3M and registering a growth of 5.8% compared to 2018. Meanwhile, the sector recorded revenues of $26.3B in 2019 or a 7.1% jump from the previous year.

“These numbers show that industry growth is closer to the high range of the recalibrated figures of Roadmap 2022,” said IBPAP President and CEO Rey Untal. “It’s also a testament to the IT-BPM sector’s resilience and tenacity—that despite global and domestic headwinds, the Philippines remains competitive, relevant, and thriving.”

IBPAP noted that growth in 2019 was driven by large incumbents that continued to expand not only in Metro Manila but also in strategic delivery locations in the countryside like Bacolod, Cebu, Davao, Iloilo, Laguna, and Pampanga. These companies accounted for 51K of the additional FTEs tallied last year.

There were also a considerable number of new investors and locators that set up their operations in the country. Half of the entrants were global in-house centers (GICs) providing services in healthcare, finance and accounting, human resources, information technology (IT) and software, and content moderation.

Finally, leveraging on higher technology and omnichannel solutions to augment human support, while may not have directly influenced headcount growth, enabled the delivery of more non-voice and IT services as well as the optimization of digital strategies.

A strong pivot to mid and high-value skills also contributed, with 65% of the workforce able to render more complex and varied services for international and local clients.

According to Mr. Untal, the Philippines has long-proven its value proposition as a premier investment destination for IT-BPM services around the world and that the industry’s sustained 2019 growth in the country further reinforces this reality.

Update on the IT-BPM industry amid the COVID-19 pandemic

Currently, the sector is dealing with the global economic fallout caused by the COVID-19 pandemic. Domestically speaking, this will have an impact on 2020 headcount and revenue projections and will also modify prevailing work and service models within the industry.

As a provider of essential services, the sector was able to continue operations and increase capacity throughout the Enhanced Community Quarantine (ECQ) with the help of the Department of Trade and Industry (DTI), the Philippine Economic Zone Authority (PEZA), and the InterAgency Task Force on Emerging Infectious Diseases (IATF-EID).

This continuing ability to further mobilize and optimize the IT-BPM delivery models has significantly improved the industry’s productivity rate, with 63% of employees working from home and another 27% delivering work as part of the skeleton staff housed on-site or in nearby hotels. A couple of months ago, these figures were only at 40% and 10% respectively.

Recent findings also show that while travel and tourism continued to face challenges, sectors like healthcare, telecommunications, financial services, and e-commerce saw an uptick in demand.

A couple of weeks into the ECQ, a framework towards a gradual exit was developed, discussed, and shared with industry stakeholders. This guideline is a set of recommendations, which individual IT-BPM companies can tailor-fit to their own transition plans as they exit towards a new normal.

The dialogue on rebalancing, reshaping, and re-solutioning the future of the sector is another critical and expected next step, and one that requires multi-agency, multi-industry, and multi-sectoral cooperation to ensure the country’s continuing relevance in the global marketplace despite and amid the challenges.