Global cost-cutting to help boost Philippine BPOs’ growth in 2023
According to the IT and Business Process Association of the Philippines (IBPAP), the industry could generate $35.9 billion in revenues and have total full-time workers of 1.7 million in 2023.
As some countries experience an economic slowdown and firms implement cost-cutting measures, the Philippines’ outsourcing sector is expected to benefit.
According to the IT and Business Process Association of the Philippines (IBPAP), the industry could generate $35.9 billion in revenues and have total full-time workers of 1.7 million in 2023.
In a survey by IBPAP, 83% of business process outsourcing (BPO) companies said they expect growth in 2023 despite a potential global recession, while 17% remained neutral with their forecasts.
“Results also showed that organizations will continue to outsource and use global business services this year as a lever to drive some of their cost optimization initiatives,” IBPAP said.
The survey found that investments are projected to come from the following sectors:
- Animation and game development
- Contact center
- Cybersecurity
- Financial technology
- Healthcare
- Internet service providers
- IT solutions
- Shared services
Cebu and Davao will continue to be popular information technology-business process management (IT-BPM) hubs, while Iloilo, Clark in Pampanga, and Santa Rosa City in Laguna will be added to the mix.
Beating 2022 targets
IBPAP said the BPO sector was able to beat its targets in 2022. The number of full-time employees grew 8.4% or by 121,000 in 2022, bringing the industry’s total headcount to 1.57 million.
BPOs also recorded growth of 10.3% in revenues or $32.5 billion in 2022.
IBPAP attributed the boost in headcount and revenue to growth in banking, financial services and insurance, healthcare, retail, technology, and telecommunications.
According to Leechiu Property Consultants (LPC), IT-BPM accounted for 466,000 square meters of office real estate take-up, which is 48% of the total demand for office space nationwide. This represents an 81% growth from the 257,000 sqm that BPOs took up in 2021.
LPC further noted that there were significant expansions outside Metro Manila, particularly in Cebu, Davao, Bacolod City, Pampanga, and Laguna. Over 70,000 new jobs were created in these areas, representing a 17% increase from the previous year. By the end of 2022, 31% of the sector’s total headcount or 486,000 workers were in the countryside.
“We’re working on Roadmap 2028 with purpose and momentum. That’s the only way that we can hope to achieve our goal of building the industry to a 2.5-million-strong workforce and generating $59 billion in revenues for the country,” said Jack Madrid, IBPAP president and chief executive officer.
“We still have a long way to go, but Philippine IT-BPM’s stellar performance in 2022 brings us closer to generating 1.1 million new jobs for Filipinos. It’s also a testament to the collective efforts that the private sector, government, and academe have exerted to retain the industry as an indispensable pillar of the economy.” – Rappler.com