Despite prevailing challenges on the economic, political, and social fronts, 2022 was marked with historic milestones for the country’s dynamic and vibrant IT and Business Process Management (IT-BPM) sector, according to industry group IT and Business Process Association of the Philippines (IBPAP).
In a statement, IBPAP said 2022 will surely be remembered for the landmark breakthrough of achieving work flexibility through work-from-home (WFH) and hybrid work models, as well as the launch of the Philippine IT-BPM Industry Roadmap 2028.
“Capping off the year as strongly as it began, the IT-BPM sector outperformed the aggressive targets that Roadmap 2028 set for headcount and revenue growth,” it said.
The industry group said the number of full-time employees (FTEs) in the country grew 8.4% or by 121,000 in 2022, bringing the industry’s total headcount to 1.57 million.
The sector also recorded a growth of 10.3% in revenues to reach $32.5 billion in 2022.
“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,” stated Jack Madrid, IBPAP president and CEO.
“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.”
IBPAP noted that the boost in headcount and revenue may be attributed to growth in Banking, Financial Services & Insurance (BFSI), Healthcare, Retail, Technology, and Telecommunications.
In addition to contributing new jobs and export gains, the sector was once again credited as the main driving force for movements in the office market.
Based on the latest data from Leechiu Property Consultants (LPC), IT-BPM accounted for 466,000 square meter 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 square meters that the IT-BPM industry took up in 2021.
There were also significant expansions in the countryside, particularly in Cebu, Davao, Bacolod, Pampanga, and Laguna.
In fact, over 70,000 new jobs were created in locations outside Metro Manila — a 17% increase from the previous year. By the end of 2022, 31% of the sector’s total headcount or 486,000 FTEs were in the countryside.
Based on Roadmap 2028, the Philippine IT-BPM industry can reach 1.7 million FTEs and $35.9 billion in revenue in 2023.
Separately, in a survey carried out by IBPAP, it was shown that 83% of IT-BPM companies are expecting to post 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.
Investments, according to the study, are projected to come from the following sectors: Animation & Game Development, Contact Center, Cybersecurity, Financial Technology (FinTech), Healthcare, Internet Service Providers (ISPs), IT Solutions, and Shared Services.
For the countryside, Cebu and Davao will continue to be popular IT-BPM hubs, while Iloilo, Clark (Pampanga), and Sta. Rosa (Laguna) will be added to the mix.
Among the key business challenges that companies cited, the top five were:
- Talent and skills gap;
- Cost pressures;
- More work going to competing locations such as India, Poland, and South America;
- Adapting to evolving customer needs and business models like hybrid and remote work; and
- Inadequate supply of enabling infrastructure, particularly in the countryside.
“Given these possible obstacles to IT-BPM’s growth in the country, IBPAP and its stakeholders in the industry, government, and academe must remain grounded on its four Acceleration Levers: Policy & Regulatory Support, Talent Development, Infrastructure Expansion, and Marketing & Brand Repositioning,” the group said.