By Justine Irish D. Tabile, Reporter
THE GROWTH of the Philippine information technology and business process management (IT-BPM) industry this yr is anticipated to outpace the worldwide average by way of job generation and export revenues, an industry group said.
“We’ve got grown to 1.82 million in 2024 and can hit 1.9 million by the tip of 2025. So, we’re closing in on the 2-million mark. What we can even hit in 2025 is $40 billion in export revenue,” IT & Business Process Association of the Philippines (IBPAP) President and Chief Executive Officer Jonathan R. Madrid said at a press briefing late on Monday.
“That could be a growth of 5% over last yr and 4% in jobs over the previous yr. Growth is at all times excellent news but considering that the worldwide growth of our industry only grew 3%, it shows that yet again the Philippines is leading the expansion of the industry,” he added.
These numbers, he said, are the recalibrated targets for the yr but are below the industry’s aggressive targets under the IT-BPM Industry Roadmap 2028.
“We’re exceeding our baseline targets, but we’re barely below our aggressive targets,” Mr. Madrid said.
When setting the targets, he said that the industry considers the changing work types, availability of talent, and ease of doing business.
“This industry isn’t any longer about cost optimization. It’s in regards to the availability of the talent, ease of doing business, and balancing where you give the work. Because investors cannot put all their work in a single place, there must be diversification,” he said.
“So, being such a pacesetter, along with India, the problem of overconcentration has grow to be a subject, and so we actually need to deal with those other issues in order that we will maintain our market share,” he added.
In line with IBPAP officials, the industry continues to face challenges on the local government unit (LGU) level despite the implementation of the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy (CREATE MORE) Act and its implementing rules and regulations (IRR).
“With the passage of CREATE MORE, we hope that problems with LGUs and the Bureau of Internal Revenue may have been addressed,” said IBPAP Chief Operating Officer Celeste B. Ilagan.
“But we see that even with the issuance of the IRR, a few of our members still encounter problems with certain LGUs. And it really revolves around how the LGUs interpret the provisions of CREATE MORE by way of incentives that enterprises are entitled to,” she added.
To resolve this, she said that the Department of Trade and Industry, the Department of Finance, and the Department of the Interior and Local Government are planning to issue a joint memorandum circular (JMC) that may specify how the LGUs should interpret CREATE MORE.
“We’ve got seen a draft of that JMC that has done the rounds of consultation. We all know that there’s another consultation within the province before they can pass that JMC,” she said.
“That may specify what the LGUs should follow by way of imposing fees and charges, what requirements there are for business permits, all of that,” she added.
Ms. Ilagan said these challenges are being experienced by existing enterprises, as recent investors are still testing which cities they need to arrange shop.
Meanwhile, Mr. Madrid said there are opportunities for growth in global capability centers (GCC).
“I’m blissful to say that each week our office is visited by locators and investors who wish to expand their footprint within the Philippines and are considering establishing operations within the Philippines,” he said.
“Much of the expansion and interest comes from GCC; these are corporations like JPMorgan and HSBC. I feel this can be a sector that we’d like to concentrate on because these are likely to offer higher value-added jobs,” he added.
As an illustration, Mr. Madrid noted that India has seen a rise of 100 GCCs every year, with its entire GCC industry already as big as your entire Philippine IT-BPM industry.
“I feel we should always really emphasize and concentrate on growing GCCs. Because it is, we only have 150 GCCs within the country. I feel the potential is rather more,” he said.
“I feel there’s a chance to grow our presence within the GCCs. And I feel this is vital since the revenue per worker in GCC is way higher than the broader industry,” he added.
Thus far, the industry has 250,000 employees in GCCs led by banking and financial, insurance, and healthcare services. The GCCs accounted for $8 billion, or 20% of the overall industry revenues last yr.
Also, Mr. Madrid said that there was an increase in employment within the countryside mostly because cities within the provinces should not have the identical type of public commuting issues faced by employees in Metro Manila.
“The countryside is a vibrant spot for the industry. Before COVID, we were only 25% outside Metro Manila. Today, we’re at 32% of an even bigger base,” he said.
“And in line with our roadmap projections, we see that growing to 40% by 2028. Congestion in Metro Manila is a problem, so the countryside helps to decongest that,” he added.
Nonetheless, he said that revenues are still higher in Metro Manila, as many of the GCCs are situated in Metro Manila and Cebu.
