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15% Annual Growth for Ph BPO - NEDA

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  • Posted: May 2, 2012

The National Economic and Development Authority (NEDA) is projecting growth of at least 15% annually for the Philippines' Business Process Outsourcing (BPO) sector. 

According to NEDA Assistant Director General Ruperto Majuca, the estimated 15 percent growth is an average figure for the years 2011 to 2016.  He indicated that It could even reach 20 percent if public and private partnerships are strengthened.  But if the global market weakens and public and private partnerships are insubstantial, the annual growth might top out at only 9 percent. 

The NEDA added that based on the Business Processing Association of the Philippines (BPAP) 2011 to 2016 Road Map, the association's projected annual growth of 15 percent would be more likely than a low of only 9% or a high of 20% each year. 

Growth of 15% in the industry, according to the BPAP, would result in 3.15 million indirect and direct job opportunities and taxes reaching $6 billion each year.  This is a likely scenario, according to the NEDA, when you consider the global economic environment.  Majuca added that the BPAP based its assumptions on a projected doubling of growth from 2010 to 2016 in the global market.  This projects a 10-15% growth in the global market despite uncertainties surfacing in Europe and the slow economic recovery in the United States.

Majuca said that these economic developments are resulting in foreign companies flocking to places like the Philippines to save on labor as well as other logistical costs and thus improve their bottom lines.  Countries like the Philippines, which have become established as BPO destinations and places where connectivity to the Internet is affordable, are likely to continue to benefit from outsourcing. 

The motivation of firms for conducting offshoring is to save costs, Majuca added.

To take advantage of this growth window, the NEDA strongly recommends improving the talent pool, quickly establishing next wave cities, creating a positive environment for offshoring, and strengthening the information technology (IT) and telecommunication industries.