AS ONE of the leading and largest contributors of the Philippine economy, Information Technology and Business Process Management (IT-BPM) leaders and stakeholders have urged the administration of incoming President Ferdinand Marcos Jr. to support the development and promotion of the industry.
This was one of the pressing issues that industry leaders discussed during the Go Tech Cebu: ICT/BPO Summit held on June 16-17 at Quest Hotel in Cebu City.
Michael Cubos, director of Performance360 Services and one of the event speakers, said the Department of Information and Communication Technology must spearhead the promotion of the industry to attract more foreign and local investors, and strengthen the law that protects the industry.
The industry must also pivot their focus to high-value demand (non-voiced services) and concentrate these emerging opportunities for small companies, he said.
Cubos added that homegrown or local IT-BPM companies also need government support to grow, also noting the importance of work flexibility like the work-from-home setup to outsource more jobs.
In his industry situationer report, Cubos revealed that the IT-BPM industry jumpstarted countryside development as it has driven real estate demand for the new hub centers, thus creating new jobs and higher compensation for the locals.
Aside from these developments, Cubos also saw the potential of bringing outsourcing services to small and medium entrepreneur (SME) market, which remains in the emerging stage.
Cubos said 95 percent or an estimated 400 million businesses around the world are SMEs.
This presents opportunities in harnessing high-value or non-voice services for the SMEs to create more jobs and add more revenue to the economy of the Philippines.
“If you look into that, it is now actually the new frontier, the focus in the SMEs is actually the new blue ocean. There are only few of large businesses in the world and a lot of companies are fighting, they are fighting over a small pond but the blue ocean is on the SMEs,” Cubos said.
Bright prospects
Despite the pandemic, the IT-BPM industry grew in 2021. With government support, it has to solve the mismatch of talents and the increasing cost of operation. The government must also reinforce policy and regulations to safeguard the industry.
Jack Madrid, president and chief executive of IT and Business Process Association of the Philippines, said in his keynote speech during the two-day event that the industry had registered around 120,000 jobs and reached a headcount of 1.44 million Filipinos as of 2021.
In 2021, the IT-BPM industry contributed a total revenue of $29.5 billion, posting a 10.6 percent increase over $26.7 billion in 2020 to the economy.
Madrid added that the 2021 performance has exceeded their forecast, a reflection of strong demand and confidence for Filipino talents.
“We were one of the very few industries that actually showed growth and we added 120,000 jobs for Filipinos. In 2020, at the height of the pandemic, we added 23,000 jobs. That’s a total of 143,000 jobs during the challenging pandemic period,” Madrid said.
Data from the Philippine Economic Zone Authority showed the IT-BPM is the second largest industry with P328.6 billion investments generating almost 970,000 direct jobs.
The industry also ranked first in terms of job contributions with 100,000 hiring positions.
It also remains the single largest absorber of office space totalling 256,000 square meters for 2021.
As far as Cebu City is concerned, Madrid said the city has been considered a center of excellence in the region’s outsourcing sector.
“Needless to say, it has a major established IT-BPM industry, with proven capabilities and marketing strengths attracting major locators with over 300 IT-BPM companies here in Cebu,” Madrid said.
Aside from this, he believes that the industry is a catalyst for inclusive growth as it encourages countryside development.