BPO Plays a Key Role in Philippines Economic Growth

The Philippines’ gross domestic product (GDP) grew nearly 7% in 2010. The economy weathered the 2008-2009 global recession better than its regional peers due to minimal exposure to securities issued by troubled global financial institutions, lower dependence on exports, relatively resilient domestic consumption supported by large remittances from 4-5 million overseas Filipino workers, and a growing business process outsourcing industry.

The economic growth in the Philippines has averaged 4.5% per year since 2001, when former President Arroyo took office. Her stance toward economic improvement has remarkably reemerged and restored the economy. Major infrastructures arose in the metropolitan areas of Luzon, while Metro Cebu also became an attraction for foreign and local investors. During her time, the Philippines ventured into a new economic advantage in the Business Process Outsourcing (BPO) industry.

Now, the Philippines is a net services exporter, and the BPO sector has been contributing to the country’s balance of payments (BOP) as much as the remittance of inflows from overseas Filipinos. According to the World Bank, the Philippine economy is projected to expand by 5% in 2011, with the business process outsourcing (BPO) industry expected to play an important role.

The rapidly rising BPO sector is building on the Philippines' natural comparative advantages, namely a cost-competitive platform built around a young English-speaking, technology-savvy labor force, readily available telecommunication infrastructure, and a favorable economic zone environment.

Philippine business process outsourcing services are evident in communications, technology sectors, and business, professional, and technical industries. It utilizes human capital and information technology (IT), which has bucked the downward trend of the global financial crisis.