The IT and business process outsourcing (IT-BPO) sector projects a growth this year of 13 percent, surpassing the scaled down government target GDP growth of 4 to 5 percent, even as it grew in 2020 when the economy contracted and hit a recession.
WITH the country’s economy barely moving because of the pandemic- induced hits resulting in many industries and businesses either slowing down or closing shops, the business process outsourcing (BPO) sector seems to be the only which has been weathering the storm.
Growth
In fact, it is well on its way to posting double digit growth for this year at a high 13 percent.
It means, that the sector would be outpacing yet again the economic growth projected by national government at 4 to 5 percent.
This, after the IT-BPO Association of the Philippines (IBPAP) said that it is expecting the sector to grow revenues by between 8 and 13 percent, and create full-time employment by 7 and 8 percent.
IBPAP chairman Benedict Hernandez says 56 percent of the respondents to its 2021 industry growth survey expect growth to hit double digits this year, while 38 percent see it hitting single digits.
Only 6 percent expect flat growth.
Resilient
The BPO’s resiliency was initially proven in 2020, when it managed to grow in both employment and revenues despite the impact of the COVID-19 pandemic on the global economy.
While the 1.4 percent growth rate was small, it was much better compared to the rest of the Philippine economy which suffered its worst contraction since World War 2, as well as the worst unemployment on record.
The IBPAP said the industry saw revenues still climb 1.4 percent in 2020 even when the pandemic was deeply hurting the economy.
This came about because the industry generated a total of $26.7 billion in 2020 as BPO companies adopted flexible work arrangements to ensure continued operations amid the pandemic.
The sector also hired 1.8 percent more employees in 2020 or 1.32 million direct employment.
Roadmap
Hernandez credited the resiliency of his colleagues in IT-BPO, as well as the government for its policies and accommodations that allowed the industry to perform well despite the pandemic.
“Our current road map will actually lapse and finish by 2022 so we are in the midst of creating our next six-year plan, or road map, called IBPAP roadmap 2028," said Hernandez.
The new roadmap will tackle 5 key ‘points of contact’ including accelerated digitization, talent upskilling, ecosystem partnerships, responsive policy regimes, and country brand and competitiveness.
Responsive
Hernandez said responsive policy regimes are something they want to work on with the government, especially when it comes to allowing IT-BPOs to retain the fiscal incentives granted to locators of PEZA zones, even as they continue to work from home.
“The resounding thinking and anticipation is there is going to be some form of hybrid [work from home and office setup] out there, and currently, our policy regime is not actually attuned to that," he added.
$29-B industry
Last June, Hernandez said the ITBPO sector was projected to grow its revenues to $29 billion and add some 160,000 more jobs by 2022 as it remained resilient despite the COVID-19 pandemic.
The sector continues to become a fast-growing dollar export contributor to the economy, even in 2020, when most of the firms suffered from losses due to the pandemic.
"Amidst other crises that the world has seen, we have constantly been seeing growth after growth at different levels, but growth nonetheless. [The year] 2020 was a big surprise to us as the rest of the economy had to deal with a lot of contraction of the economy," Hernandez said.
Its revenue was at $26.7 billion in 2020, Hernandez said, adding that its current direct employment count is at 1.32 million.
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