Industry Research : Philippines IT-BPO Industry Sees Continuous Growth
Globally, the Philippines is competitively positioned in terms of talent, costs, and risks relative to established and emerging offshore destinations. It is now the leading provider for voice services and the second most–preferred destination for non-voice, complex services.
Maintaining this leadership is a serious mandate for the industry as new service areas and market opportunities continue to open up.
The Business Processing Association of the Philippines (BPAP) is pulling all the stops to ensure and sustain industry growth.
"We are confident that we will at least maintain our lead in voice BPO and are just as confident that we can continue to expand and move up the value chain in new targeted segments of the software, digital, health care, corporate, and creative services, as well as target geographies outside the US," BPAP chairman Alfredo Ayala said.
Global players are also gunning for a bigger stake in the market.
According to Doing Business 2013, a report by the World Bank and the IFC, Poland has improved the most in the ease of doing business in terms of registering property, paying taxes, resolving insolvency, and enforcing contracts.
Malaysia, on the other hand, has made it easier to process permit applications. Singapore is ranked second in the strength of investor protection index. India continues to be the country’s close competitor and, like China, has a robust labor pool. Latin America also has an advantage in terms of being nearshore services to the United States, the primary client.
Together with its partner associations—the Animation Council of the Philippines (ACPI), Contact Center Association of the Philippines (CCAP), Healthcare Information Management Outsourcing Association of the Philippines (HIMOAP), Game Developers Association of the Philippines (GDAP), and Philippine Software Industry Association (PSIA)—BPAP works to further strengthen the IT-BPO industry by addressing issues on technology, infrastructure, and talent pool through industry public-private partnerships (IPPPs). BPAP acts as a bridge to potential investors who would like to explore doing business in the Philippines.
"From aeronautics, to animation, to healthcare, to engineering design, to video game programming, the Filipino has proven that he can compete with the best," said President Benigno S. Aquino III in his closing keynote at the 2012 International Outsourcing Summit (IOS).
"The world has begun to see this, and I invite your companies to ride the wave of optimism and bet even more on the skill of the Filipino."
Raymond Lacdao, BPAP executive director for Industry Affairs, said that partner associations are working hard to stay ahead in their respective sectors. "These organizations are ‘niche services’ that focus on capabilities they know they excel in," he said. "Students and university graduates are familiar with the US market, thereby requiring only minimal training."
However, different sectors still face a lot of challenges. In health care BPO, for instance, Transkripsyo CEO Michael Chua said that many graduates do not possess skill requirements of the sector. Meanwhile, brain drain poses a serious threat to the animation sector. ACPI president Grace Dimaranan said that there is an ongoing talent shortage due to the growing number of Filipino artists and animators that opt to work abroad.
Nora Terrado, PSIA president and country manager of Headstrong Philippines, said the software industry is evolving and there are "a lot of things in the pipeline" to achieve the target revenue of US$1.5 billion and over 80,000 full-time employees by 2013."We see tremendous opportunity for the country to seize leadership in the global health care sector. The increase in our membership only means that more companies are considering the Philippines as a high-value destination for health care outsourcing," said HIMOAP president JuanlozBotor. From US$102 million in 2010, the health care BPO industry’s total revenue increased to US$277 million in 2011. The workforce also increased from 14,000 in 2010 to 25,000 in 2011.
Voice BPO, which is still the largest sector of the Philippine IT-BPO industry, has seen tremendous growth in recent years. "Starting with less than 2,500 employees, the industry has since grown remarkably to 416,000 by the end of 2011. This growth is further projected to reach 816,000 employees by 2016. This annual growth of at least 20 percent is outpacing the growth of the global call center market which grew by only 12 percent," said CCAP executive director JojoUligan.
According to GDAP president Alvin Juban, "The worldwide game industry is estimated to hit US$68 billion this 2012 and it will continue to grow with continued sales of smartphones, tablets, and laptops. The numbers say it all, this is the industry to be in."
Dimaranan stressed the importance of government support. "Our own animation series will help a lot in encouraging more clients to buy Philippine-made content." In 2011, industry revenues were at US$142 million for animation and US$7 million for game development. Over the same period, the creative industries sector employed 10,000 Filipinos.
"The character of the Filipino talent is an intangible key differentiation—beyond English language skills, background in education and Western cultural affinity. Many of us express admiration for the Filipino authenticity in customer service, work ethic and commitment to excellence, and creativity," said BPAP CEO and president Benedict Hernandez. "Beyond cost, quality and innovation, these intangibles further differentiate our Filipino workforce from the rest of the world."
Posted by Veronica Silva Cusi, news correspondent
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