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. The year 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.
According to the IT and Business Process Association of the Philippines (IBPAP), the number of full-time employees (FTEs) in the country grew 8.4% or by 121K 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 US$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 US$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 466K sqm. of office real estate take-up, which is 48% of the total demand for office space nationwide. This represents an 81% growth from the 257K sqm. 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 70K 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 486K FTEs were in the countryside.
2023 Growth Outlook and Acceleration Levers
Based on Roadmap 2028, the Philippine IT-BPM industry can reach 1.7 million FTEs and US$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.
A lot of work has already been done on Talent Development, with a flagship initiative scheduled on April 26 and 27. The IT-BPM Talent Summit, which is organized by IBPAP in partnership with the Department of Trade and Industry (DTI) and the Board of Investments (BOI), will feature face-to-face plenary and breakout sessions on Day 1 and a virtual career and job fair on Day 2. The two-day event aims to help the Philippine IT-BPM sector leap ahead on its agenda of establishing a national upskilling framework, expediting educational reforms, and generating 1.1 million new jobs for Filipinos.
“This is just the tip of the iceberg,” shared Madrid. “We have more partnerships, projects, and programs in the pipeline for Talent Development and the other Acceleration Levers and we don’t plan on letting up or slowing down because we realize that a lot is at stake here that’s beyond revenues, margins, or profits.”
