President Ferdinand “Bongbong” Marcos, Jr. stated his plan to improve the country’s digital connectivity in his inaugural State of the Nation Address this year. Boosting digital processes is particularly beneficial to the development and efficiency of Information Technology and Business Process Management (IT-BPM) in the Philippines.
The president commended the IT-BPM industry for its exceptional growth and job creation over the last four years. According to Malacañang, at least three US-based IT-BPM firms have responded to President Marcos Jr.’s call to expand their operations in the Philippines.
Unlike other industries, IT-BPM thrived during the pandemic as companies struggled to digitize and modify many operations. Continue reading to learn how the IT-BPM sector benefits the country by creating revenue and jobs, and how it remains resilient in the face of a crisis.
What is the IT-BPM Sector?
IT-BPM, or Information Technology and Business Process Management, is the management of specific work operations by third-party vendors for foreign brands, multinationals, or start-ups.
Companies frequently outsource work because outsourcing provides several advantages that help them create value and transform their businesses. Cutting costs, reinforcing global presence, focusing on performance, and maximizing profits are some benefits they gain from outsourcing. IT-BPM in the Philippines is on a promising growth trajectory. It’s the global leader in voice-based services and is constantly improving in non-voice and complex process outsourcing. The revenue and jobs that IT-BPM has generated over the years characterize it as a pillar of the Philippine economy.
The IT-BPM industry in the Philippines generated an estimated revenue of $26.7 billion in 2020, reflecting a decrease of 0.5% from the previous year. The disruptions in operations because of the global COVID-19 pandemic caused a decline in revenue. However, the industry quickly recovered over the next two years.
The Philippine IT-BPM sector has reached its 2022 target, ending 2021 with revenues amounting to 29.49 billion USD.
The IT and Business Process Association of the Philippines (IBPAP) also stated that the industry’s revenues in 2021 increased by 10.6% from the 2020 figures.
Jobs Created in the IT-BPM Sector
While many industries laid off employees to reduce costs and mitigate the effects of the coronavirus pandemic, the IT-BPM sector soared in employment. IBPAP said that the number of full-time employees grew to 23,000 in 2020, increasing the total industry headcount to 1.32 million.
In 2021, IT-BPM full-time employees in the country increased by 120,000, bringing the sector’s total employment to 1.44 million—a growth of 9.1% compared to 2020.
The IT-BPM industry also contributed to job generation in the countryside through the increasing popularity of remote work. The rising demand from global customers, higher confidence in work-from-home (WFH) arrangements, and growth in eCommerce and technology helped fuel its expansion.
Effects of COVID-19 on the IT-BPM Sector
The COVID-19 pandemic has posed significant challenges. However, the IT-BPM sector proved its value to the Philippine economy. The following are a few effects of the pandemic on the IT-BPM industry:
- The BPO industry fared better compared to other sectors during the pandemic
When governments imposed global lockdowns, most industries suffered. However, business process outsourcing (BPO) was one of the remaining operational sectors.
At the pandemic’s peak, many firms chose to outsource their business processes because of an increased push toward digitalization and lower operational costs. In 2021, remote work was projected to increase by 300%, and the role of the BPO industry will only grow in importance.
- Information and Communication Technology (ICT) is growing steadily
During the pandemic’s economic devastation, digital technologies have emerged as a critical component of economic and social resilience. It facilitated faster economic responses to the emergency by allowing businesses and governments to continue operating during lockdowns.
ICT has played a critical role in ensuring the safe relief and treatment of affected populations, emerging as a vital means of resolving pandemic-related challenges and responding to the “new normal.”
Profits at technology companies whose services saw a significant increase in demand during lockdowns reached all-time highs, far outpacing those of companies in other sectors.
- There’s an increase in the demand for BPM industry services
The COVID-19 pandemic has sparked drastic changes in business operations globally. IT-BPM harnesses the power of computers and rule-based engines to provide companies with services adapted to the changing processes involved in business operations.
When Zoom became the pandemic era’s leading video conferencing platform, the U.S. firm turned to the Philippines, the world’s call center capital, for customer and operations support.
- Social distancing measures drove digital transformation
Companies worldwide used IT-BPM to keep their businesses running to prioritize employee safety during lockdowns. Social distancing measures shifted brand-consumer relationships to the virtual realm. This shift forced firms to go digital, increasing demand for remote services.
As firms adjusted to the pandemic’s restrictions, they turned to BPO solutions to handle critical business functions. eCommerce orders and financial service inquiries temporarily boosted activity for IT-BPM operators with call centers in the Philippines.
- There’s a growing demand for artificial intelligence, business automation, and cloud services
The COVID-19 pandemic has also increased the demand for artificial intelligence (AI), business automation, and cloud services.
The increased clinician burnout prompted health systems to deploy AI tools to assist with time-consuming documentation tasks. With growing strains on healthcare systems and faster technological advancements, outsourcing healthcare via digital platforms has become more appealing.
As more businesses outsource, a greater demand for talent in social media management, omnichannel communication, and data-driven analytics surfaced.
Predictions and Expectations of the IT-BPM sector
Since 2010, the Philippines’ IT-BPM industry has surpassed India’s long-held position in voice-based services. It won’t be long before the Philippines overtakes all other countries as the top outsourcing nation. The IT-BPM sector has the following expectations and predictions:
- BPOs are moving away from low-cost clerical tasks and toward professional tasks
The BPO industry has diversified and evolved, with companies now carving out a niche in sectors and the types of services they provide to gain expertise. There are hundreds of BPOs, each with its own set of services that aren’t limited to call centers.
While call centers in the Philippines provide outstanding service, they’re only a subset of the BPO industry. BPOs cover many business processes, including back-office services, service management, web development, and digital marketing.
- IBPAP projects an 8-10% increase in revenues and a 7-8% increase in full-time employees by the end of 2022
Despite recent economic, health, and social challenges, the IT-BPM industry has remained an invaluable foundation of the country’s economy. The IT-BPM sector continues to demonstrate tenacity as it strives to contribute to economic growth and transform opportunities for the country.
Revenues in the IT-BPM industry were $29.5 billion in 2021, up 10.5% from $26.7 billion the previous year. In 2021, the industry employed 1.44 million people.
The Philippine IT-BPM sector will significantly impact the country in the coming years through rural employment, digitally enabled solutions, and various services.
- Over 1 million additional jobs are anticipated to be added in the IT-BPM sector by 2028
The Philippine government expects the IT-BPM sector to add 1.1 million new jobs over the next six years. Skilled employees and enhanced business processes will increase employment and attract international investors.
Collaboration between the government and telecommunication companies will help to achieve this target. The IT-BPM sector will successfully increase employment through government policies specific to IT-BPM, remote work, reliable digital infrastructure, and talent development.
International investments will further the growth of the Philippines’ IT-BPM industry. President Marcos’ working visit to the United States in September 2022 resulted in $3.9 billion in investment pledges, which can generate around 56,000 jobs in the IT-BPM sector.
- The IT-BPM sector is anticipated to grow at a rate of 10-15% per year
The IT-BPM industry will grow at 10-15% annually, the fastest rate of any local industry, as per Trade Secretary Alfredo E. Pascual. He observed that the opportunity has grown as a byproduct of the pandemic’s increased use of digitization and online services.
The Philippines’ IT-BPM competitive language and service quality advantage explains the unending global demand for Filipino talent. Innovation, international competition, and new technologies will fuel the continued rise of the BPO industry, as outsourcing allows businesses to increase earnings while decreasing costs.
- IT-BPM sector revenues are projected to nearly double by 2028
According to the Philippine IT-BPM Industry Roadmap 2028, the industry aims for a compound annual growth rate (CAGR) of 10.4% over the next six years, with annual revenues expected to reach $59 billion by 2028.
IBPAP also highlighted the importance of rebranding to emphasize the Philippines as a provider of high-value services to attract more investors.
- IBPAP hopes to increase the Philippines’ IT-BPM GDP contribution to 8.5% by 2028
Despite the pandemic, the IT-BPM industry has remained resilient in 2021, with revenue and employment increasing. It contributed 7.5% to the country’s GDP in that year.
According to Jack Madrid, President of IBPAP, the industry aims to increase its contribution to the Philippine GDP to 8.5% by 2028. Madrid believes that the Philippine IT-BPM sector is on the verge of a new and exciting era, with the future ahead of us being the brightest it has ever been.
- The DICT encourages IT-BPM employee upskilling and reskilling
The need to address the imbalance between talent supply and demand has never been greater. Beginning in 2022, the Department of Information and Communications Technology (DICT) will allocate funds for employee upskilling and reskilling to support the IT-BPM industry.
DICT’s Digital Cities 2025 program has also identified 25 locations to focus on developing into new business destinations for IT-BPM operations.
IT-BPM in the Philippines Remains Competitive
Given the expected exponential growth of the IT-BPM sector in the coming years, the government’s support for this industry is meaningful. However, this expansion demands that the sector adapts to clients’ needs.
The Filipino workforce is critical to the IT-BPM sector’s rise to the economic powerhouse status it is today. With digital transformation defining future career paths, upskilling has become a priority. Collaborating with a call center in the Philippines is a wise investment because of Filipinos’ proven ability to provide global clients with an unparalleled service experience.
Contact Executive Boutique Call Center for a free quote if you’re looking for a dependable, PCI-compliant call center that can help your company boost productivity and minimize operational costs while protecting customer data.
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