Philippines BPO industry’s GDP contribution to double in 12 years

Philippines apart from India is a country which has been dominating the world BPO industry since last decade. The BPO industry in Philippines has done phenomenally well in the recent years and the number of employment opportunities being generating in this sector is a testimony to this growth. The BPO industry in Philippines has also been contributing significantly to the GDP of that country and it is estimated that the Philippines economy will double in next 12 years and so will the contribution of this sector to the GDP. The Overseas Filipino Workers are contributing the most through their remittances. Some of the growth indicators of Philippines BPO industry are:

  • The Philippines BPO-Software industry has posted a growth of 20% so far compared to the same period last year. This surge in growth is because of demand of services from US and Australia.
  • According to Business Process Association Philippines (BPAP), the BPO-IT industry in Philippines has grown at annual rate of 30% over the last decade. This growth rate is faster when compared to the global growth rate.

BPO contribution. Image source

One of the major highlights of this industry in Philippines is that the industry has started diversifying significantly in the scale and maturity of services. They have diversified even in the breadth. The BPO companies are now no more restricting themselves to offer only voice based services but they have also started offering non voice based high value outsourcing services. This industry is said to be the third largest net foreign exchange earner after tourism. IT-BPO industry has been giving employment opportunities to large number of people and it contribution to GDP is said to be approximately 5% in 2011. The largest contribution to foreign exchange has been through the remittances of nearly 10 million overseas workers who are working in this industry.

Challenges with Philippines BPO industry

Though Philippines has been celebrating the success of its dream run in the IT-BPO industry, there are many challenges which needs to be addressed. The industry is facing challenges like filling in the demand of the companies which have grown manifold because of the fast growth. Though Philippines have a large population which speak English, but there are many Filipinos who don’t use it regularly, so training these people has also become a tough task. Majority of the English speaking population are concentrated in Cities and tapping these resources is becoming a challenge. The stand of US in bringing out an Anti Outsourcing Bill is also a concern for the industry players.

The challenge of the IT-BPO industry in the future would be to sustain this growth taking into account all these scenarios and increase its contribution to GDP. World over the growth of Philippines will be closely watched since it is a fast developing nation and the onus lies on the industry stalwarts to tide over these challenges.

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