Somewhere in the Philippines, a bustling crowd of young urban workers is spilling into the city streets. The crowd is a mélange of creative and innovative members of the information technology workforce, the newest economic icon that is propelling the country to higher heights.
The country’s Information Technology and Business Process Management (IT-BPM) space is growing at a phenomenal pace. In 2012 alone, the industry generated over $13 billion in revenue—a significant growth from 2011’s $11 billion. Economists believe this trend will only continue to grow as other top outsourcing countries face serious competition and more foreign businesses choose the Philippines as a premier IT destination.
Factors behind the Growth of IT Industry Philippines
The country has gradually been overtaking India as the leader in information technology business process services, especially voice-based outsourcing services and internet marketing, accounting, and medical transcription. Factors that led to this shift include:
1. Low cost.
Cost reduction remains the primary drive behind outsourcing to this corner of Asia. Businesses of all sizes from countries like the US and UK have responded to the lower operational and labor costs by transferring work to offices here.
2. Skilled workforce.
The country has been very successful in offering technical talents to other nations. Being a former US colony and having English as an official language, the nation has a language edge over other low-wage countries. It also boasts a highly motivated workforce with a constant stream of college-educated job candidates.
3. Growing population and young labor force.
A high population rate has long been believed to hamper progress, but times have turned this population issue into an advantage. Many Asian countries have aging populations, but majority of the Philippines’ population is made of people in the working age (between 15 and 64).
IT Industry Philippines Gains More Jobs and Money
As a country’s economy grows, so does the value of its local currency. The steadily appreciating Philippine currency brought by the IT-BPO growth is good news for the economy, but is also a potential risk. The country is now 30% more expensive than India, although that hasn’t stopped international companies from partnering with local service providers.
- The outsourcing market is expected to double by the end of 2016, according to industry reports.
- The Information Technology and Business Process Outsourcing Association of the Philippines (IBPAP) is confident the country will reach its $16 billion revenue target for 2013.
- BPO company Transcom Philippines expects the industry will create 720,000 jobs this year.
- The Economic Survey 2012-13 acknowledged the country as a major competitor of India’s IT services, owing to the country’s developed software and hardware segments.
- In 2011, the country had the highest number of employees in call centers, with about 400,000 workers.
There has been a mass exodus of Filipinos moving to different parts of the world to look for jobs. Ever since the growth in the economy became tangible, stories of Filipinos moving back to the country have emerged. A long-lasting growth in IT Philippines could make the country one of the strongest economies in Asia.