netizens reaction

IT-BPO sector posts slower growth in 2011

Rappler.com
A workhorse of the Philippine economy moves towards higher profits but at a slower pace

MANILA, Philippines – Revenues generated by the Philippines’ information technology and business process outsourcing (IT-BPO) sector increased 23.59% to $11 billion in 2011 from $8.9 billion in 2010, reported the Business Processing Association of the Philippines (BPAP). 

While the 2-digit growth rate is still robust, it showed a prevailing trend: the sector’s pace of growth is slowing down. 

In 2010, the sector grew 26%, according to BPAP’s data. Already, that was slower than the whopping 46% year-on-year increases in 2004 and 2006. 

The slower-growth report from the industry association echoes other findings of groups doing research on IT-BPO. In its 2010 Survey of around 800 companies, the Bangko Sentral ng Pilipinas (BSP) noted that its respondents reported an aggregate revenues of $10.1 billion in 2010, reflecting a 21% year-on-year increase.

BSP noted that growth dropped significantly from 50.3% in 2007, 44.8% in 2008, and 30.6% in 2009. 

Target: 20% growth a year

Nonetheless, BPAP highlighted that the 24% growth in 2011 was above the 20% annual target rate up to 2016.   

At a 20% compound annual growth rate, IT-BPO will become a $25-billion industry by 2016, according to BPAP.  At that point, the sector  would contribute about 9% of GDP and capture a 10% share of the global market, noted new BPAP president and CEO Benedict Hernandez.

BPAP’s Hernandez pointed out that hitting the industry’s targets for 2016 would “not be possible without the strong government support that we are now experiencing.” 

Below are some the highlights of the 2011 assessement of BPAP members’ aggregate performance:

  • Call centers‘ revenues shot up 21.3% to $7.4 billion in 2011 from $6.1 billion in 2010. Call (or contact) centers, which remain the largest sub-sector of the local IT-BPO industry 
  • Non-voice BPO segment, which experienced one of the fastest levels of growth of 30%, realized only 24% growth in 2011.

  • IT outsourcing shot up 37% according to Philippine Software Industry Association (PSIA) president Nora Terrado, who added that there should be strong demand for Philippine IT services in 2012. That was a marked increase from the already healthy 28% it grew in 2010. 
  • Game development sector grew by 13% in 2011, reaching $8 million in revenue and employing nearly 1,400 Filipinos.
  • Animation sector shrank 10% to $128 million in 2011 revenues. The Animation Council of the Philippines pointing the finger at lost contracts to global competitors from countries like China, which subsidize animation operations.
  • Engineering services from the Philippines felt a 5% increase in revenue and employment, according to Raymond Lacdao, BPAP’s Executive Director for Industry Affairs,
  • First measurements of healthcare information management outsourcing (HIMO) showed that the as much as $277 million worth of HIMO services were provided to global end-users from the Philippines, with the sector employing 24,700. Virata said that the data shows the industry is steadily moving into high-value services, like HIMO. 


The IT-BPO sector covers translation services, to animation, design, call center services and software development.

Quality and quantity of jobs

Given the large, and increasing, number of underutilized workers with moderate skills, it is unlikely that BPO alone can drive inclusive growth.

In terms of providing jobs, the BPAP reported that the sector has employed 638,000 in 2011, a 22% growth. 

Call center jobs are usually highlighted since they contribute the most in the aggregate. BPAP said that call centers, or other voice-based services, have up to 416,000 employees in 2011, higher than the 344,000 in 2010. 

Announced on the same day, April 11, the Asian Development Outlook also tackled BPO and “inclusive” strategies.

In a report released on April 11, ADB said that government should prioritize industries that promote more inclusive growth since the BPO sector only absorbs 1% of the labor force.

“Given the large, and increasing, number of underutilized workers with moderate skills, it is unlikely that BPO alone can drive inclusive growth,” the ADB said. – Rappler.com