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BPO industry seen performing better vs PH economy this year

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Warren de Guzman, ABS-CBN News

<div class="embed-wrap"><figure data-feedback="fb:likes,fb:comments"><img src="https://sa.kapamilya.com/absnews/abscbnnews/media/2018/business/07/15/20180715-callcenter-rtr-101316.jpg"/><figcaption>Experts in Manila say the Philippine business process outsourcing sector will perform better than the Philippine economy this year. Reuters/File</figcaption></figure></div><p>MANILA - The Philippine business process outsourcing sector will perform better than the Philippine economy this 2020. But it won’t see growth in revenues either.</p><p>The IT and Business Process Association of the Philippines commissioned a study with third party The Everest Group, to recalibrate the sectors trajectory up to 2022.</p><p>The study released Thursday reveals revenue growth will slow from 7.1 percent in 2019 to -0.5 percent this 2020. Revenues will slip to $26.2 billion from $26.3 billion the year before. Hiring growth meanwhile is seen to flatten out, but the good news here is the IT-BPM sector is projected to lose zero jobs in spite of the COVID-19 pandemic.</p><p>Contact Center Association of the Philippines president Benedict Hernandez said the COVID-19 pandemic has created some serious challenges, but it also opened doors to new opportunities. One was the revelation of work from home arrangements, which incredibly improved productivity for some businesses.</p><p>“How did that manifest? In a matter of a couple of weeks, from March 17 lockdown, by April the contact centers were 80 percent up and running. Hundreds of thousands of people figured out a way to help their clients, doing it at home. Now we are doing it close to 100 percent. That is quite incredible,&quot; he said.</p><p>However, Hernandez said opportunities will only be available to industry players who can provide customers new solutions to problems created by the pandemic. He noted cost saving measures, automation, and other services for business transformation toward ’new normal’ readiness are in high demand.</p><p>“There will be winners for service providers who can step up to the challenge, and there will be losers who cannot step up. In terms of growth, 40 percent were saying they were growing, another 40 percent were seeing decline, 20 percent were not moving. It was split in a survey done in August. I’m not surprised the forecast is flat this year. But in that flatness, there are some players whose problem is they cannot recruit fast enough. The clients are looking for something different, and we need to step up to the plate,&quot; he said.</p><figure class="op-interactive"><iframe height="315" src="https://www.youtube.com/embed/-ZnrCyoC4oY?enablejsapi=1" width="560"></iframe></figure><div class="iwantbar">Watch more in <a href="//www.iwantv.com.ph/">iWantv</a> or <a href="//tfc.tv/">TFC.tv</a></div><p>Game Developers Association of the Philippines president Alvin Juban meanwhile noted his sector also received a genuine boost to growth.</p><p>“We absolutely see a good growth pattern. Truth be told, when the lockdown began, a lot of inquiries started falling into our laps. without even asking for it. Everybody knows video game use soared during this lockdown. In fact pre-COVID, the gaming industry was projected $150 billion worldwide. The report came in today, there was an additional $15 billion added to that forecast for this year alone,&quot; he said.</p><p>Looking at the Everest study’s numbers up to 2022, the optimistic compounded annual growth rate for ITBPO is 5.5 percent, which would push industry revenues to $29 billion, a gain of $3 billion in two years. The more likely scenario projects a CAGR of 3.2 percent with total revenues hitting just $28 billion.</p><p>Compared to the previous projections if IBPAP, this is much lower. In February 2020, before the COVID-19 lockdowns happened, IBPAP was forecasting total revenues for the industry of $32 billion.</p><p>In terms of manpower, the new study has an optimistic forecast for additional cumulative hires of 130,000 by 2022. The more likely scenario forecasts an addition of just 70,000 new hires. In February the expectation was an additional 270,000 workers would be added to the IT-BPO workforce.</p><p>IBPAP President Rey Untal said it is important to view the numbers in the proper context.</p><p>“We need to put into proper context, all of the numbers we have seen awhile ago. Globally growth has remained flat. Flat growth, that is not bad, that is great, if you look into the context that the global economy will contract by 3 to 4 percent. It is likely staying flat is everybody’s goal. If you look at the Philippines we are expected to be flat, which is again great, considering how the other industries are doing. If you look at the Philippines we are expected to be flat, which is again great, considering how the other industries are doing,&quot; he said.</p><p>Before 2020, IBPAP was already reducing revenue and hiring forecasts due to a number of factors, including the adverse effects of automation and artificial intelligence on some of their business segments. Pending legislation which would change tax structures and incentives for the BPO sector were also seen as potential problems.</p><p>Now, however, Untal and the rest of IBPAP appear emboldened by their industry&#x27;s ability to weather the COVID-19 pandemic better than most other sectors. They were able to keep the trust of their customers and clients by delivering services in spite of lockdowns and other challenges.</p><p>The conservative forecasts for the next 2 years have more to do with some of the unresolved issues that have been bothering the industry in the years before 2020, including regulation and connectivity issues.</p><p>However now the sector appears battle hardened and tested, ready to take on these issues.</p><figure class="op-interactive"><iframe height="315" src="https://www.youtube.com/embed/mAfCQSWssGk?enablejsapi=1" width="560"></iframe></figure><div class="iwantbar">Watch more in <a href="//www.iwantv.com.ph/">iWantv</a> or <a href="//tfc.tv/">TFC.tv</a></div>

<p>MANILA - The Philippine business process outsourcing sector will perform better than the Philippine economy this 2020. But it won’t see growth in revenues either.</p>

MANILA - The Philippine business process outsourcing sector will perform better than the Philippine economy this 2020. But it won’t see growth in revenues either.

BPO industry seen performing better vs PH economy this year

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BPO industry seen performing better vs PH economy this year

Warren de Guzman,

ABS-CBN News

Published November 20, 2020 05:12 AM PHT

|

Updated November 20, 2020 08:56 AM PHT

Read More:

BPO

Philippine BPO

Philippine economy

economy

Contact Center Association of the Philippines

call centers

IT and Business Process Association of the Philippines

IBPAP

COVID-19

coronavirus

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