Riding on the growth momentum from 2013, the Philippines is set to record 11-percent growth in total IT spending by end of 2014, according to research firm IDC.
The total IT market will reach $6.76 billion, on the back of sound economic fundamentals, healthy domestic consumption, and relative under-penetration.
IDC said it expects the Philippines to remain a hardware-centric market in 2014, taking 76 percent of the total spending. Software and services will contribute 7 percent and 18 percent, respectively.
The forecasted IT spending 2014 growth for the Philippines is grounded on the country’s expected 6-percent GDP growth for next year. Robust consumption, rising investments and remittances from overseas Filipino workers (OFWs) will fuel the acceleration of IT spending in the coming year.
These and the recent developments in the country’s investment grade, ease of doing business, and corruption perception index all contribute to healthy uptake on IT products and services in the Philippines.
“The lingering effects of Typhoon Haiyan or Yolanda may have short-term impact on IT spending plans in 4Q 2013 and early 1Q 2014. However, the trickledown effect of sound economic fundamentals and optimistic prospects on investments to second and third tier cities bode well for the country as regionalization and the rising IT demand from these areas become even more evident,” said Jubert Daniel Alberto, research manager at IDC Philippines.
Moreover, based on IDC’s annual Continuum survey, more than half of the companies in the Philippines are looking to be even more aggressive when it comes to their IT expenditure in order to meet their business objectives in the coming 12 months compared to a year ago. Because of this, almost 60 percent of these companies anticipate an overall increase of 20-45 percent in their total IT expenditure.
Furthermore, increasing demand from the small and medium enterprises (SMEs) and the continuous spending from the consumer sector put IT spending at a more advantageous level in 2014. The relative under-penetration of the country when it comes to IT provides a bigger room for growth in the coming years.
“Barring any wildcard events such as natural disasters directly affecting Metro Manila and other major economic centers or major international economic and political upheavals, the Philippines looks to enjoy a healthy outing in 2014. IDC believes the ever increasing need for IT products and services, from a consumer, SME and enterprise point of view, to IT spending in the forefront of budgetary concerns,” Alberto added.