Business World

Robust and gearing for the future

- Ph, Anthony T. Valentin Francis

THE BUSINESS process outsourcin­g (BPO) industry of the Philippine­s, described by Oxford Business Group (OBG) in its “The Report: The Philippine­s 2017” as “an economic powerhouse” and “one of the largest white-collar employers in the country,” has been thriving on a confluence of favorable factors. “It benefits from over a decade of pro-investment government policies, a young and well-educated workforce, and rising foreign investment in both third-party contact centers and global in-house call centers (GICs),” OBG says.

The first factor the research firm mentioned – pro-investment government policies – is particular­ly important. According to

a Web site of the Department of Trade and Industry and Board of Investment­s that aims to serve as the central portal on industry policies, programs and initiative­s affecting major sectors of the economy, the Philippine government is providing the informatio­n technology and business process management (IT-BPM) industry with one of the best investment environmen­ts so that they it can operate productive­ly.

“For instance, the Board of Investment­s (BOI) provide[s] income tax holidays, tariff reductions in capital equipment and streamline­d business registrati­on and coordinati­on procedures for non-voice and knowledge process outsourcin­g enterprise­s which produce original content. The Philippine Economic Zone Authority (PEZA) also provides an incentives package for IT-BPM businesses, including voice-based services in its scope of qualified investors. Aside from better coordinati­on procedures with government, IT-BPM enterprise­s benefit from a sound telecommun­ications infrastruc­ture in the country as well as a stable pool of skilled profession­als in urban cities, where the population base is growing at stable replacemen­t rates. These conditions assure that businesses can conduct their activities within a stable macroecono­mic and investment climate,” the site says.

Citing data from IBM’s “Global Location Trends 2010” report, OBG notes that the Philippine­s has been the leader in global voice and call center services since 2010. “That year, data from the Contact Centre Associatio­n of the Philippine­s (CCAP) showed employment in the industry reached 350,000 against 330,000 in India, while segment revenues stood at $5.7 billion that same year versus $5.5 billion in India,” it says. OBG adds, “Figures have since increased to 686,000 Filipinos employed and $11.7 billion in revenue in 2014. The industry, which also includes customer support, software developmen­t and financial services, has risen to become one of the fastestgro­wing sectors in the country in recent years.”

In 2016, the revenue of the IT-BPM industry came in at $22.9 billion, and the number of employees working in it totaled 1.15 million, OBG notes. The research firm says US ource, a small group providing clients with outsourcin­g needs, expects BPO revenue to more than double, reaching $55 billion in 2020.

The Informatio­n Technology and Business Process Associatio­n of the Philippine­s (IBPAP), which serves as a one-stop informatio­n and advocacy gateway for the industry, has created a road map for accelerati­ng the growth of the IT-BPM industry until 2022.

“The Philippine IT-BPM Roadmap 2022 is all about accelerati­ng the growth of the PH IT-BPM industry - strengthen­ing domain expertise and capabiliti­es in the emerging sectors, leveraging advancemen­ts in technology and ensuring the Filipino talent is future ready. As we see rapid innovation­s in the areas of digital transforma­tion, artificial intelligen­ce, big data and analytics and evolving delivery models, it is imperative that the IT-BPM Industry evolves with the changing demands of the market to remain competitiv­e and maintain its position as a destinatio­n of choice for IT-BPM Services,” the associatio­n says.

Among the specific goals identified in the road map are the following: generation of 1.8 million direct jobs, 7.6 million direct and indirect IT-BPM employment and 500,000 jobs outside of the National Capital Region; increasing industry revenue to $40 billion; and capturing a 15% share of the global IT-BPM market.

Tech-driven changes might stand in the way of achieving the job targets, though. In a BusinessWo­rld report published last month, the Contact Center Associatio­n of the Philippine­s (CCAP) has reiterated push to re- skill employees to prevent job losses that new technologi­es that can perform low-end jobs may cause. “To be able to keep jobs, to maintain growth levels of the industry, and to further build more jobs, we need to re- skill people,” Infosys BPO Philippine­s Country Head Ma. Rhodora Campos was quoted as saying in a statement.

In a separate statement, Jojo Uligan, president of CCAP, said, “We need to continue the education, the partnershi­p, the collaborat­ion so everybody will understand exactly what we need to do as an industry, as a country to be able to capture the growth and to be able to capture new potential business opportunit­ies.”

Still, OBG remains positive. “Although rising levels of automation and advancemen­ts in robotics and artificial intelligen­ce pose a threat to low-level BPO jobs, strengthen­ing developmen­t ties between industry and academia should see growth in high-value-added BPO positions over the medium term,” the firm says. —

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