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BPO sector plays huge role in Philippine’s economic growth

BPO sector plays huge role in Philippine’s economic growth

Since the Business Process Outsourcing (BPO) sector first established its roots in the country,  it has continuously played a key role in the development of the Philippine economy over the last several years. Notably, in 2014, the sector hit $18.4 billion in revenue, a remarkable 18.7 growth from the previous year. In addition,  as early as August of last year, the Philippines was able to reach the one million employee milestone for the sector.

Industry analysts are optimistic about the continued growth of this sector. It is projected that the BPO sector should meet the $25 billion mark in revenue and reach 1.3 million in direct and 3.2 million in indirect employment by the year 2016. By then, the Philippine BPO sector could account for approximately 10 percent of the nation’s GDP.

By 2016, the Philippine BPO sector could account for approximately 10 percent of the nation’s GDPThe continued impressive performance of the BPO sector has translated into higher income for the government in the form of tax collections. According to the Everest Group, this equates to a $33-billion revenue stream through 2016. If these projections hold true, the Philippines could enjoy public services equivalent to 300,000 public school classrooms and 3.2 million families receiving maximum social service benefits from the government.

Many attribute this success to the strong regulatory support and economic planning that the Philippine government has enacted, and the high employability of Filipino BPO workers.

The Philippine Development Plan, which is a program spanning 2011 to 2016, serves as the backbone for this growth. The Plan names the BPO sector as a high-potential driver of economic growth. As such, the sector should be primed and prioritized for investment.

Moreover, the Philippine government continues to implement several training programs in order to create a competent and competitive workforce.

The government has also allowed several financial and regulatory incentives  to encourage foreign investments in the sector. These include tax holidays and exemptions, simplified import and export procedures, and the freedom to hire foreign nationals.

Aside from government support, the high employability of Filipino BPO workers is another asset that can attribute to the growth of the sector. Filipinos are often well-educated, and tend to sport  neutral, easy-to-understand accents. Thanks to a long history with foreigners, Filipinos are also very familiar with and can easily adapt to Western cultures.

While the country enjoys a commanding lead over its competitors because of these factors, there is still much work to be done to spur continued growth into the coming years. Chief among these is the need to prepare for the impending move towards higher-value Knowledge Process Outsourcing (KPO) actvities.

SOURCES

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