Despite Duterte hitting US and EU, gov’t assures support for local BPO sector

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In spite of the inflammatory pronouncements of Pres. Rodrigo Duterte against the United States and the European Union, the local BPO industry still has the solid backing of the government.

Trade secretary Ramon Lopez speaking during the general membership meeting of IBPAP
Trade secretary Ramon Lopez speaking during the general membership meeting of IBPAP

At the recent general membership assembly meeting of the Information Technology and Business Process Association of the Philippines (IBPAP), Department of Trade and Industry (DTI) secretary Ramon Lopez assured that it can rely on the government as its partner in carrying out plans for the sector.

Lopez did not mention the angry pronouncements that Duterte has hurled against the US, the country’s main BPO market, but the expression of support was enough to reassure the rattled industry. About 77% of the local BPO market caters to the US market.

“The Philippines has been growing at more than twice the global market growth rate over the past five years,” Lopez said, adding that the total global opportunity for outsourced services is expected to grow from $166 billion to $250 billion by 2022.

With the demand expected to double by 2022, the trade chief called on industry players to work with the government in pursuing a new game-plan that will enable the industry to sustain its positive growth trajectory, create more jobs, and contribute to inclusive growth.

As the Industry Roadmap 2011-2016 nears conclusion with target revenues of up to $25 billion and an employee base of 1.3 million by year-end, the new industry roadmap 2017-2022 is slated to be made public next month.

Lopez added that the BPO sector?s contribution translates to a high-value added of about $19,000 per capita by year-end, which is projected to further level up as the sector aims to acquire higher value projects on software development, healthcare information management, creative services and products and engineering services.

“Our objective in our partnership with you in this next phase is to create an ecosystem that will further foster sustained and more inclusive growth for the IT-BPM sector,” Lopez said.

In the same juncture, Lopez outlined policy reforms and other government initiatives for the industry, including the implementation of the Training for Work Scholarship Program (TWSP), which has benefited more than 230,000 graduates from 2010 to May 2016.

The partnership between the Commission on Higher Education and IBPAP resulted in the creation of the Service Management Program (SMP), a specialization track for business and IT schools that aim at developing manpower suited for the IT-BPM industry.

He said that BPO activities may avail several tax incentive packages provided by the Board of Investments (BOI) and the Philippine Economic Zone Authority (PEZA), adding that the DTI is supporting the modernization of the country’s investment incentives regime.

Also at the same event, real estate developers and telecommunications companies threw their support behind the new roadmap for the industry.

IBPAP’s property and telecommunications have joined the roadmap initiative to further support the growth of the sector by continuously aligning the needs of BPO companies as they continue to expand into areas outside Metro Manila, transforming previously untapped and undeveloped localities into bustling IT-BPM hubs.

The property and communications sectors are preparing for the exponential growth the Philippines is expecting. According to research partner Frost & Sullivan’s preliminary findings, the industry is expected to grow up to more than 700,000 seats in the next five to six years.

“All these years, our roadmap partners have been our strong allies in building the industry through connectivity and building robust, world class 24/7 communities. They continue to play a crucial role as the 1.2 million strong industry charts its course over the next 6 years,” said Benedict Hernandez, chairman of IBPAP?s executive committee.

Countryside development was one of the highlights of discussions as it is key to inclusive growth, which is part of the socio-economic agenda of the government.

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